Federal Employee Firings Get Faster Track: MERIT Act Overhauls Civil Service Rules, Effective 2026

The "Modern Employment Reform, Improvement, and Transformation Act of 2025" (MERIT Act), slated to go into effect a year from now, significantly reshapes the rules around firing and disciplining federal employees. The core change? It makes it easier and faster for agencies to take action against employees for poor performance or misconduct, and it limits employees' ability to fight back.

Rewriting the Rulebook

The MERIT Act throws out some old ways of doing things. It repeals Section 4303 of Title 5 of the U.S. Code, which laid out the process for performance-based actions. Now, agencies can take "adverse actions" – things like demotions or firings – based on a "preponderance of the evidence." That's a lower bar than what's used in criminal court, meaning it's easier for the agency to prove its case. Agencies also no longer need to put an employee on a "performance improvement plan" before taking action (Section 6).

For example, imagine a federal employee at the Department of Veterans Affairs consistently misses deadlines and receives multiple complaints. Under the old rules, there might have been a lengthy process involving improvement plans. Under MERIT, the agency could move more quickly to demote or even fire that employee, as long as they can show it's more likely than not that the employee's performance or conduct warrants it.

Faster Firings, Fewer Appeals

The Act also speeds up the timeline for disciplinary actions. Employees now have just 7 business days (down from 14) to respond to a notice of proposed action (Section 3). Agencies must issue a final decision within 15 business days, unless they suspect the employee committed a crime. And if an employee appeals to the Merit Systems Protection Board (MSPB), they have only 10 business days to do so (Section 3).

Crucially, the MERIT Act limits the ability of employees to use negotiated grievance procedures to challenge adverse actions or reductions in force (RIFs). Section 4 specifically prohibits grieving actions like demotions, suspensions, and removals, as well as furloughs longer than 30 days resulting from a RIF. This means employees have fewer avenues to fight what they believe are unfair actions.

Hitting the Wallet: Pensions and Bonuses

The MERIT Act introduces some significant financial consequences. Federal employees convicted of a felony related to their work will have their annuity (pension) reduced. The time they spent committing the felony won't count towards their retirement calculation (Section 8). If a spouse cooperated in the investigation, their benefits are protected.

Agencies also get new power to recoup bonuses. If an employee receives a bonus and then is found to have violated agency policy or committed a serious crime (one punishable by more than a year in prison), the agency must order them to repay the bonus (Section 9). Employees have to certify they'll repay if ordered, and they can appeal to the MSPB.

Probation Gets Longer

New federal hires will face longer probationary periods. For most positions, it's now two years, up from one (Section 11). For Senior Executive Service positions, it also goes from one year to two (Section 10). For jobs requiring formal training or a license, the probationary period ends two years after the training is complete or the license is granted. This means it takes longer for new employees to gain full job security.

Overriding Union Contracts

Section 12 explicitly states that the procedures in the MERIT Act will override any conflicting provisions in collective bargaining agreements. This is a big deal because it means that even if a union contract has stronger protections for employees, the MERIT Act's rules will apply.

The MERIT Act represents a substantial shift in how the federal government manages its workforce. While proponents might argue it increases accountability and efficiency, it also raises concerns about due process and employee rights. The changes are significant, and the impact on federal employees – and the services they provide – will likely be felt for years to come.