February 6, 2025
Leitner Warywoda PLLC
Introduction
On January 28, 2025, the Office of Personnel Management (OPM) sent an unprecedented notification to nearly 2.2 million federal employees, informing them of their right to elect a “deferred resignation” from the federal government. Eligible employees have been given until February 6, 2025, to accept the offer.
The Deferred Resignation Program (DRP), outlined in OPM’s notice titled “Fork in the Road,” has raised significant concerns among federal employees. The program allows employees to resign while continuing to receive pay through September 30, 2025. However, key legal, financial, and career implications must be carefully evaluated before making a decision.
With only hours remaining until the deadline, federal employees need to be fully informed of their rights, risks, and potential consequences. This article will explore the legitimacy, practicality, and legal ramifications of the program, offering essential guidance for federal workers facing this life-altering decision.
1. Understanding the Deferred Resignation Program
The Deferred Resignation Program (DRP) effectively provides an alternative to layoffs or forced terminations. Eligible employees can resign and still receive full pay and benefits through September 30, 2025. However, there are crucial stipulations that must be understood before opting in.
Eligibility and Exemptions
Not all federal employees qualify for deferred resignation. The following categories are exempt from the program:
• U.S. Postal Service employees
• Military personnel
• Immigration enforcement officers
• National security positions
• Public safety employees (e.g., law enforcement, emergency responders)
If you received an OPM notification regarding the program, you are likely eligible. However, it is strongly recommended that you verify your eligibility by reviewing OPM’s January 28, 2025, email, consulting your agency’s labor relations department, and seeking legal counsel to assess your unique situation.
2. Key Considerations for Federal Employees
Before opting into the Deferred Resignation Program, it is crucial to weigh the benefits and risks associated with your resignation. Below are the primary factors to consider:
A. Employment and Work Requirements
Employees who accept the deferred resignation offer should be aware of the following:
✔️ You do not need to return to work in the office.
✔️ You do not need to perform any job duties.
✔️ You can obtain subsequent employment (federal or private sector).
✔️ You may rescind your resignation, but reinstatement is not guaranteed.
✔️ You can accelerate your resignation date if desired.
However, certain agencies with mission-critical roles (such as the Veterans Affairs and health services agencies) may require employees to complete outstanding work during the transition period. Some agencies have also hinted at hybrid return-to-office requirements during the deferred resignation period.
B. Federal Retirement Benefits
Your decision to resign under the DRP will impact your Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS) benefits.
• If you were already planning to retire before September 30, 2025, you may extend your resignation date to match your retirement eligibility date.
• If your retirement date is between October 1, 2025, and December 31, 2025, you may still participate but must specify “resign and retire” in writing to avoid processing errors.
⚠️ Caution: Employees who resign before reaching retirement eligibility may lose pension benefits and annuities. If you are unsure, consult a federal employment attorney before resigning.
C. Health and Life Insurance Coverage
Under the DRP:
• Federal Employee Health Benefits (FEHB) and Federal Employee Group Life Insurance (FEGLI) continue through September 30, 2025.
• After resignation, benefits typically cease after 31 days unless employees purchase temporary continuation coverage (which is significantly more expensive).
• Only eligible retirees can carry FEHB into retirement.
If you resign before retirement eligibility, you must return to federal service to reinstate your FEHB benefits in the future.
D. Unemployment Benefits & Tax Implications
• Voluntarily resigning under DRP may disqualify you from unemployment benefits (varies by state).
• The deferred pay structure may increase your tax liabilities, potentially pushing you into a higher tax bracket.
Consulting a tax professional before making your decision is advisable.
E. Job Security & Future Employment Risks
The Trump administration’s federal workforce policies suggest a restructuring of federal employment, with anticipated mass layoffs and potential Schedule F reclassifications.
• Schedule F would strip tens of thousands of federal employees of civil service protections, effectively making them at-will employees.
• Those who do not accept deferred resignation may face stricter performance standards, forced in-office work, or potential layoffs.
Opting into deferred resignation may protect employees from involuntary layoffs or future reclassifications.
F. Legal Implications & Pending Claims
If you have active claims against your agency (e.g., discrimination, whistleblower retaliation, or Merit Systems Protection Board (MSPB) appeals):
• Your case does not automatically get dismissed if you resign.
• However, remedies such as reinstatement or reassignment may be forfeited.
• If you are currently involved in settlement negotiations, ensure that your resignation agreement is structured to preserve your claims.
Seeking legal advice before resigning is strongly recommended.
3. Potential Legal Challenges to the Deferred Resignation Program
The Deferred Resignation Program has faced legal scrutiny, with federal unions and lawmakers raising serious concerns about its legality:
• The American Federation of Government Employees (AFGE) has filed a lawsuit in U.S. District Court, alleging the program violates the Administrative Procedure Act.
• OPM’s own legal justification is under fire, particularly regarding its compliance with the Anti-Deficiency Act.
• Congress has not yet authorized funding for deferred resignation payments past March 14, 2025, raising concerns about whether employees will actually be paid.
Given these uncertainties, federal employees should proceed with extreme caution.
4. Government Shutdown Considerations
With a potential government shutdown looming on March 15, 2025, deferred resignation payments may be at risk.
• If the government shuts down, employees may not receive pay unless Congress passes a new spending bill.
• If you participate in deferred resignation, you will not be prioritized for back pay if funding gaps occur.
Federal employees should monitor congressional updates before making a decision.
5. Final Thoughts: Should You Accept the Deferred Resignation Offer?
The Deferred Resignation Program presents a complex decision with significant career and financial implications. Before accepting, federal employees should:
✅ Verify eligibility and consult agency HR/legal advisors.
✅ Review retirement & pension eligibility before resigning.
✅ Consider future employment prospects and potential layoffs.
✅ Weigh legal risks if involved in pending claims.
✅ Prepare for tax implications and health insurance coverage gaps.
✅ Stay informed about ongoing legal challenges to the program.
Given the legal uncertainties surrounding the program, consulting an experienced federal employment attorney is highly recommended.
Need Legal Assistance? Contact Leitner Warywoda Today
If you are a federal employee considering deferred resignation, our federal employment attorneys can help you navigate your options. Contact us for a consultation at:
📞 Call: 212-671-1110
🌐 Visit: NYLawInjury.com
Time is running out—ensure you make the best decision for your career, finances, and future
