The House Committee on Oversight and Government Reform unanimously passed the Federal Workforce Early Separation Incentives Act (H.R. 7256), legislation that would modernize the federal workforce volunteer buyout program and increase financial incentives. The bill, sponsored by Rep. Nick Langworthy (R-NY), passed by a vote of 43-0.

“Taxpayers deserve a federal government that is efficient, accountable, and appropriately sized,” said Rep. Langworthy in a statement upon introduction. “By ending the 30-year-old cap, and instead tying the retirement incentive to earned income, we will make the VSIP more fair and potentially appealing. This legislation brings a common-sense update to a program that has been frozen in time, giving agencies a better option to reduce costs while treating federal employees fairly.”

The Voluntary Separation Incentive Payment (VSIP) program, created in the 1990s to allow federal agencies to offer buyouts to those who voluntarily leave government service, has a $25,000 cap. Many have noted that limit has lost its appeal due to inflation and rising salaries over the past thirty years.

“The Federal Workforce Early Separation Incentives Act removes the outdated statutory cap and allows agencies to offer buyouts of up to six months’ pay,” according to Rep. Langworthy. “By tying the incentive to an employee’s salary, the program would automatically adjust over time and once again serve as a meaningful option for workforce downsizing. While the updated incentives may result in modest upfront costs, they are expected to produce significant long-term savings by reducing future payroll and retirement obligations.”

The bill is now cleared for consideration by the full House of Representatives. To follow the progress of H.R. 7256, click here.