MERIT Act Mandates Reinstatement and Back Pay for Federal Workers Fired in 2025 Mass Layoffs

The Model Employee Reinstatement for Ill-advised Termination Act, or MERIT Act, is an effort to correct specific, large-scale job losses that hit the federal workforce recently. This bill focuses squarely on federal employees who were still in their probationary period when they were let go in a “mass termination”—defined as at least 15 involuntary separations within a 30-day window—that occurred between January 20, 2025, and the date this law is enacted. Essentially, it’s a legislative undo button for a specific set of layoffs, ensuring those probationary workers get their jobs and lost income back.

The Back Pay and Reinstatement Guarantee

If you were one of these affected probationary employees, the MERIT Act guarantees you an offer to return to your former agency in the same or a “similar” position. That new job must come with employment benefits—like health insurance and retirement plans—that are equal to or better than what you had before (SEC. 3). For those who haven’t found a new federal job yet, the agency must pay you the full amount you would have earned from your termination date until the day you are reappointed. This back pay is paid in one lump sum and won't count against federal salary caps, though it will be taxed as regular income.

What If You Already Found a New Gig?

If you were proactive and managed to land a new federal job after being let go, the rules change slightly (SEC. 3). If you’re still in that new position when the MERIT Act passes, you get a special payment: the difference between what you would have earned at your old job and what you actually earned at the new one during that time. If you took a new job but left it before this law passed, you get the offer to return to your old agency, plus the back pay calculation (old pay minus new earnings), and then full pay until you start back up. This system is designed to make sure no one is penalized for trying to stay employed, but it also means the government is writing some hefty checks to make people whole.

Tight Timelines and the ‘Similar Job’ Question

For those affected, the clock starts ticking fast. Agencies must notify former employees about their rights under the Act within 30 days of the law’s enactment (SEC. 4). Once you get that notice, you have just 30 days to accept the offer. If you miss that window, you lose the right to reinstatement. If you accept, the agency has another 30 days to finalize your appointment. This tight turnaround is great for speeding up the process but could be a challenge for anyone who moved or is hard to reach.

One area that could get sticky is the definition of “same or similar” position (SEC. 3). While the benefits (retirement, leave) must be the same or better, the specific duties of the job might be open to interpretation. The Office of Personnel Management (OPM) Director has the final say on determining the correct pay rates for these reinstated positions, and they must consider any evidence the employee provides, giving them a voice in the process (SEC. 6).

Transparency and the Cost to Taxpayers

This bill requires two major reports to keep Congress in the loop. The Comptroller General must review the scope of the mass terminations—how many people were let go, why, and how many were probationary (SEC. 7). Separately, OPM must report on how successful the reinstatement effort was, tracking how many employees were notified and how many accepted the job offers. While this transparency is welcome, it’s important to note that the mandated back pay and administrative costs associated with these mass reinstatements will be borne by the federal government, meaning taxpayers fund the correction of these “ill-advised” actions.