S. 359 — Federal Employee Performance and Accountability Act of 2025

This section establishes definitions for terms used in the Act, including (1) Director, as the Director of the Office of Management and Budget; (2) eligible employee, as an employee of an Executive agency (as defined in 5 U.S.C. 105, i.e., an Executive department, Government corporation, or independent establishment) in a GS-11 through GS-15 position or senior-level position above GS-15 (per 5 U.S.C. 5108) that has clearly measurable performance criteria (e.g., project management, policy analysis, IT or procurement specialist, leadership, customer service, or claims processing); (3) participating agency, as an Executive agency with participating employees under section 3(b)(1); (4) participating employee, as an eligible employee in the pilot program under section 3(a); (5) performance metrics, as agency-specific standards for participating employees measuring productivity, quality, or timeliness (e.g., outputs per quarter, accuracy rates, or processing deadlines); and (6) Program, as the pilot program established under section 3(a).

This section establishes a 5-year pilot program, beginning 180 days after enactment, under which the Director implements a performance-based pay structure for participating federal employees. The head of each Executive agency must ensure that between 1% and 10% of eligible employees participate, unless the agency head determines participation poses risks to national security or public safety and submits a written justification to the Director.

This section establishes performance measurement and accountability requirements for participating agencies and employees in the program, as follows: (1) requires each participating agency to establish annual performance metrics for each participating employee related to core functions and public service delivery, focusing on productivity, quality, and timeliness; (2) directs the Director to establish, and requires each participating agency to implement, a standardized, objective performance evaluation system that includes periodic review of participating employees' performance; and (3) requires each participating agency to provide training and resources to support participating employees in meeting performance metrics, including an introductory training course and quarterly performance feedback sessions.

This section establishes a tiered annual basic pay adjustment system for participating employees, effective the first pay period beginning on or after the first day of the Program's second year and each year thereafter, based on performance under section 4: (1) a 15% increase for tier 1 employees who significantly exceed metrics; (2) no adjustment for tier 2 employees who meet metrics; and (3) a 15% reduction plus training or development for tier 3 employees who do not meet metrics. It authorizes agency heads to award discretionary bonuses and non-monetary benefits (e.g., flexible scheduling, telework, technology upgrades, parking) to tier 1 employees. Participating employees are ineligible for Title 5 pay adjustments (e.g., under 5 U.S.C. §§5303, 5304, 5304a), step increases (e.g., under §§5335, 5336), or other monetary benefits (e.g., bonuses under §§5753, 5754; performance awards under §5384) during Program participation.

This section establishes reporting and accountability requirements for the Program. Specifically, it (1) requires participating agencies to submit annual reports to the OMB Director on quantitative outcomes (i.e., cost savings, efficiency gains, productivity metrics) and qualitative outcomes (i.e., examples of impacts on public service outcomes and employee satisfaction), with the Director to review the reports and recommend adjustments; (2) directs the OMB Director to conduct annual assessments of the Program's outcomes on productivity, budgetary impact, and employee satisfaction and to publish and submit a report on those assessments to Congress; and (3) requires the Comptroller General of the United States and the OMB Director, not later than one year after the Program terminates, to assess the Program's success and submit to Congress a report on its impact on productivity, budgets, and employee engagement.

This section prohibits the authorization of additional appropriations to carry out this Act and directs the Office of Management and Budget, the Government Accountability Office, and participating agencies to use existing funds for their duties under the Act.