[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 662 Introduced in Senate (IS)]

<DOC>






119th CONGRESS
  1st Session
                                 S. 662

  To amend title 5, United States Code, to provide for an alternative 
      removal for performance or misconduct for Federal employees.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 20, 2025

 Mr. Sheehy (for himself, Mr. Cramer, and Mrs. Hyde-Smith) introduced 
the following bill; which was read twice and referred to the Committee 
             on Homeland Security and Governmental Affairs

_______________________________________________________________________

                                 A BILL


 
  To amend title 5, United States Code, to provide for an alternative 
      removal for performance or misconduct for Federal employees.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Modern Employment 
Reform, Improvement, and Transformation Act of 2025'' or the ``MERIT 
Act of 2025''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Termination of authority for chapter 43 performance-based 
                            actions.
Sec. 3. Adverse actions based on performance or conduct.
Sec. 4. Prohibition on grieving adverse actions and reductions in 
                            force.
Sec. 5. Actions against senior executives for performance or conduct.
Sec. 6. Actions against supervisors for performance or conduct.
Sec. 7. Modification of procedures for furlough.
Sec. 8. Reduction of annuity of employee convicted of a felony for 
                            which an adverse action is or would have 
                            been taken.
Sec. 9. Authority to recoup bonuses or awards paid to employees.
Sec. 10. Extension of probationary period for positions within the 
                            Senior Executive Service.
Sec. 11. Extension of probationary period for employees in the 
                            competitive service.
Sec. 12. Application.

SEC. 2. TERMINATION OF AUTHORITY FOR CHAPTER 43 PERFORMANCE-BASED 
              ACTIONS.

    (a) Repeal.--Section 4303 of title 5, United States Code, is 
repealed.
    (b) Application.--Subsection (a) shall not apply to any 
performance-based action under section 4303 of title 5, United States 
Code, commenced before the effective date provided in section 12.
    (c) Conforming Amendments.--
            (1) Title 5.--Title 5, United States Code, is amended--
                    (A) in section 2302(e)(1)(A), by striking ``3504, 
                and 4303(e)'' and inserting ``and 3504'';
                    (B) in section 4302(c)(6), by striking ``but only 
                after an opportunity to demonstrate acceptable 
                performance'';
                    (C) in section 7512, by striking subparagraph (D) 
                and redesignating subparagraphs (E) and (F) as 
                subparagraphs (D) and (E), respectively;
                    (D) in section 7701(c)(1), by striking ``decision'' 
                and all that follows through ``preponderance of the 
                evidence'' and inserting ``decision is supported by a 
                preponderance of the evidence'';
                    (E) in section 9508(d), by striking ``(1) In 
                applying'' and all that follows through ``(2)''; and
                    (F) in section 9902(a)(2), by striking ``sections 
                4302 and 4303(e)'' and inserting ``section 4302''.
            (2) Title 31.--Section 732(d)(3) of title 31, United States 
        Code, is amended by striking ``consistent with section 4303 of 
        title 5''.
    (d) Clerical Amendment.--The table of sections for chapter 43 of 
title 5, United States Code, is amended by striking the item relating 
to section 4303.

SEC. 3. ADVERSE ACTIONS BASED ON PERFORMANCE OR CONDUCT.

    (a) In General.--Section 7513 of title 5, United States Code, is 
amended to read as follows:
``Sec. 7513. Cause and procedure for actions other than furlough
    ``(a) In General.--
            ``(1) Standard for certain adverse actions.--Under 
        regulations prescribed by the Office of Personnel Management, 
        an agency may take an action described in paragraphs (1) 
        through (4) of section 7512 against an employee if the agency 
        determines by a preponderance of the evidence that the 
        performance or misconduct of the employee warrants such action.
            ``(2) Factors for initial decision.--When making an initial 
        decision on an action described in paragraphs (1) through (4) 
        of section 7512 with respect to an employee, the deciding 
        employee of the agency shall exclusively apply the following 
        factors:
                    ``(A) The nature and seriousness of the offense, 
                and its relation to the employee's duties, position, 
                and responsibilities, including whether the offense--
                            ``(i) was intentional or technical or 
                        inadvertent;
                            ``(ii) was committed maliciously or for 
                        gain; or
                            ``(iii) was frequently repeated.
                    ``(B) The employee's job level and type of 
                employment, including any supervisory or fiduciary 
                role, and the prominence of the position.
                    ``(C) The employee's past disciplinary records.
                    ``(D) The employee's past work record, including 
                length of service, performance on the job, ability to 
                get along with fellow workers, and dependability.
                    ``(E) Mitigating circumstances surrounding the 
                offense, such as--
                            ``(i) unusual job tensions, personality 
                        problems, or mental impairment; or
                            ``(ii) harassment, bad faith, malice, or 
                        provocation on the part of others involved in 
                        the matter.
            ``(3) Standard of review.--The agency shall--
                    ``(A) review the initial decision described in 
                paragraph (2), without regard to whether the employee 
                responds under subsection (e)(2); and
                    ``(B) uphold the initial decision if it is 
                supported by substantial evidence.
    ``(b) Pay of Certain Employees Subject to a Reduction in Grade.--
            ``(1) Applicable rate of pay.--Notwithstanding any other 
        provision of law, an employee subject to a reduction in grade 
        shall, beginning on the date of the reduction in grade, receive 
        the annual rate of pay applicable to the reduced grade.
            ``(2) No administrative leave, or pay without working or 
        use of other leave, during appeal.--If an employee subject to a 
        reduction in grade appeals the reduction in grade under this 
        section, during the period during which the appeal is ongoing, 
        the employee--
                    ``(A) may not be placed on administrative leave; 
                and
                    ``(B) may only receive pay and benefits if the 
                employee--
                            ``(i) reports for duty; or
                            ``(ii) is approved to use accrued unused 
                        annual, sick, family medical, military, or 
                        court leave.
            ``(3) Conditions on pay and benefits generally.--During any 
        period other than a period described in paragraph (2), if an 
        employee subject to a reduction in grade does not report for 
        duty or receive approval to use accrued unused leave, the 
        employee may not receive pay or benefits.
    ``(c) Procedure.--
            ``(1) Response period.--The period during which an employee 
        may respond to a notice of an action described in paragraphs 
        (1) through (4) of section 7512 in writing and furnish 
        affidavits and other documentary evidence in support of the 
        response, as provided under subsection (e)(2), shall be 7 
        business days.
            ``(2) Final decision.--
                    ``(A) In general.--The agency shall issue a final 
                decision with respect to an action described in 
                paragraphs (1) through (4) of section 7512, with 
                respect to an employee, not later than 15 business days 
                after the agency provides notice, including a file 
                containing all the evidence in support of the proposed 
                action, to the employee, unless there is reasonable 
                cause to believe the employee has committed a crime for 
                which a sentence of imprisonment may be imposed.
                    ``(B) Form and contents.--A final decision 
                described in subparagraph (A) shall--
                            ``(i) be in writing; and
                            ``(ii) include the specific reasons 
                        therefor.
    ``(d) PIP.--The agency may carry out an action described in 
paragraphs (1) through (4) of section 7512 with respect to an employee 
without first placing the employee on a performance improvement plan.
    ``(e) Employee Rights.--An employee against whom an action 
described in paragraphs (1) through (4) of section 7512 is proposed is 
entitled to--
            ``(1) a written notice stating the specific reasons for the 
        proposed action;
            ``(2) respond in writing and furnish affidavits and other 
        documentary evidence in support of the response;
            ``(3) be represented by an attorney or other 
        representative; and
            ``(4) a written decision and the specific reasons therefor 
        at the earliest practicable date.
    ``(f) Hearing.--An agency may provide, by regulation, for a hearing 
which may be in lieu of or in addition to the opportunity to respond 
provided under subsection (e)(2).
    ``(g) Appeal.--An employee against whom an action described in 
paragraphs (1) through (4) of section 7512 is taken is entitled to 
appeal to the Merit Systems Protection Board (referred to in this 
section as the `Board') under section 7701 of this title not later than 
10 business days after the effective date of the action.
    ``(h) Records.--
            ``(1) Agency records; provision to board.--The agency shall 
        maintain, and shall furnish to the Board upon request of the 
        Board, copies of the notice of proposed action, the response of 
        the employee when written, a summary thereof when made orally, 
        the notice of decision and reasons therefor, and any order 
        effecting an action described in paragraphs (1) through (4) of 
        section 7512, together with any supporting material.
            ``(2) Provision to employee.--Upon the request of an 
        affected employee, the agency shall furnish copies of the 
        documents described in paragraph (1) to the employee, to the 
        extent those documents were not provided under subsection 
        (c).''.
    (b) Discipline of Supervisors Based on Retaliation Against 
Whistleblowers.--Section 7515(b)(2)(B) of title 5, United States Code, 
is amended--
            (1) in clause (i), by striking ``not later than 14 days'' 
        and inserting ``not later than 7 business days''; and
            (2) in clause (ii), by striking ``14-day period'' and 
        inserting ``7-business-day period''.
    (c) Application.--The amendments made by subsections (a) and (b) 
shall not apply to any action under section 7513 or 7515 of title 5, 
United States Code, as amended by those subsections, respectively, 
commenced before the effective date provided in section 12.

SEC. 4. PROHIBITION ON GRIEVING ADVERSE ACTIONS AND REDUCTIONS IN 
              FORCE.

    Section 7121 of title 5, United States Code, is amended--
            (1) in subsection (a)(1), by striking ``the settlement 
        of'';
            (2) in subsection (c)--
                    (A) by redesignating paragraphs (1) through (5) as 
                paragraphs (5) through (9), respectively; and
                    (B) by inserting before paragraph (5), as so 
                redesignated, the following:
            ``(1) an adverse action under subchapter II of chapter 75;
            ``(2) a furlough of more than 30 days by a reduction in 
        force action under subchapter I of chapter 35;
            ``(3) a separation by a reduction in force action under 
        subchapter I of chapter 35;
            ``(4) a demotion by a reduction in force action under 
        subchapter I of chapter 35;'';
            (3) in subsection (e)--
                    (A) in paragraph (1)--
                            (i) by striking ``(1) Matters'' and all 
                        that follows through ``but not both.''; and
                            (ii) in the second sentence, by striking 
                        ``Similar matters'' and inserting ``Matters 
                        similar to those covered under subchapter II of 
                        chapter 75''; and
                    (B) by striking paragraph (2); and
            (4) in subsection (f)--
                    (A) by striking the first sentence; and
                    (B) in the second sentence, by striking ``In 
                matters similar to those covered under sections 4303 
                and 7512 of this title'' and inserting ``In matters 
                similar to those covered under subchapter II of chapter 
                75''.

SEC. 5. ACTIONS AGAINST SENIOR EXECUTIVES FOR PERFORMANCE OR CONDUCT.

    (a) Repeal of Pay Retention for Career Appointees Removed From the 
Senior Executive Service.--Section 3594(c)(1)(B) of title 5, United 
States Code, is amended to read as follows:
            ``(B)(i) any career appointee placed under subsection (a) 
        or (b)(2) of this section shall be entitled to receive basic 
        pay at the highest of--
                    ``(I) the rate of basic pay in effect for the 
                position in which placed;
                    ``(II) the rate of basic pay in effect at the time 
                of the placement for the position the career appointee 
                held in the civil service immediately before being 
                appointed to the Senior Executive Service; or
                    ``(III) the rate of basic pay in effect for the 
                career appointee immediately before being placed under 
                subsection (a) or (b)(2) of this section; and
            ``(ii) any career appointee placed under subsection (b)(1) 
        of this section shall be entitled to receive basic pay at the 
        rate of basic pay in effect for the position in which placed; 
        and''.
    (b) Appraisal System Requirements.--Section 4314(b) of title 5, 
United States Code, is amended--
            (1) in paragraph (3), by inserting before the semicolon the 
        following: ``or, as warranted, from the civil service''; and
            (2) in paragraph (4), by inserting before the period at the 
        end the following: ``or, as warranted, from the civil 
        service''.
    (c) Suspension for 14 Days or Less.--Paragraph (1) of section 7501 
of title 5, United States Code, is amended to read as follows:
            ``(1) `employee' means--
                    ``(A) an individual in the competitive service who 
                is not serving a probationary period or trial period 
                under an initial appointment or who has completed 1 
                year of current continuous employment in the same or 
                similar positions under other than a temporary 
                appointment limited to 1 year or less; or
                    ``(B) a career appointee in the Senior Executive 
                Service who--
                            ``(i) has completed the probationary period 
                        prescribed under section 3393(d); or
                            ``(ii) was covered by the provisions of 
                        subchapter II of this chapter immediately 
                        before appointment to the Senior Executive 
                        Service; and''.
    (d) Modification of Cause and Procedure for Suspension and 
Termination.--Section 7543 of title 5, United States Code, is amended 
to read as follows:
``Sec. 7543. Cause and procedure
    ``(a) Standard for Adverse Actions.--Under regulations prescribed 
by the Office of Personnel Management, an agency may take an action 
covered by this subchapter against an employee if the agency determines 
by a preponderance of the evidence that the performance or misconduct 
of the employee warrants such action.
    ``(b) Factors for Initial Decision.--When making an initial 
decision on an action covered by this subchapter, the deciding employee 
of the agency shall exclusively apply the following factors:
            ``(1) The nature and seriousness of the offense, and its 
        relation to the employee's duties, position, and 
        responsibilities, including whether the offense--
                    ``(A) was intentional or technical or inadvertent;
                    ``(B) was committed maliciously or for gain; or
                    ``(C) was frequently repeated.
            ``(2) The employee's job level and type of employment, 
        including any supervisory or fiduciary role, and the prominence 
        of the position.
    ``(c) Standard of Review.--The agency shall--
            ``(1) review the initial decision described in subsection 
        (b), without regard to whether the employee responds under 
        subsection (e)(2); and
            ``(2) uphold the decision if it is supported by substantial 
        evidence.
    ``(d) Procedure.--
            ``(1) Response period.--The period during which an employee 
        may respond to a notice of an action covered by this subchapter 
        in writing and furnish affidavits and other documentary 
        evidence in support of the response, as provided under 
        subsection (e)(2), shall be 7 business days.
            ``(2) Final decision.--
                    ``(A) In general.--The agency shall issue a final 
                decision with respect to an action covered by this 
                subchapter not later than 15 business days after the 
                agency provides notice, including a file containing all 
                the evidence in support of the proposed action, to the 
                employee, unless there is reasonable cause to believe 
                the employee has committed a crime for which a sentence 
                of imprisonment may be imposed.
                    ``(B) Form and contents.--A final decision 
                described in subparagraph (A) shall--
                            ``(i) be in writing; and
                            ``(ii) include the specific reasons 
                        therefor.
    ``(e) Employee Rights.--An employee against whom an action covered 
by this subchapter is proposed is entitled to--
            ``(1) a written notice stating the specific reasons for the 
        proposed action;
            ``(2) respond in writing and furnish affidavits and other 
        documentary evidence in support of the response;
            ``(3) be repr