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- Last updated: October 2025
As the federal government approaches a possible shutdown on October 1, 2025, the Office of Management and Budget has issued a historic memo instructing agencies to view a lapse in funding as a time they may execute permanent layoffs—an extreme shift from normal furlough practices. Unlike previous shutdowns in which employees were furloughed and later brought back for back pay, this process could eliminate the jobs of thousands of federal employees.
Then, adding another layer of intricacy, OPM guidance, dated September 29, characterized RIF activities as “excepted” work,” so they can continue during a shutdown. As a result, agencies can issue RIF notices and process terminations during a shutdown, even if other operations are suspended.
Confusion and anxiety among federal employees abound because agencies have provided little communication on which employees are “excepted” and which will be furloughed in the event of a shutdown. Employees already shaken by DOGE-led layoffs and return-to-office mandates now face the dual threat of unpaid furloughs immediately followed by possible permanent job loss.
Federal employment attorney Justin Schnitzer, cautions:
Federal employees receiving RIF notices during a shutdown need to know that the 60-day clock begins running immediately, and the appeal rights clock doesn’t stop just because there is a lapse of appropriations. Anyone who receives a RIF notice should document everything, contact a qualified attorney right away, and be ready to file a MSPB appeal within the statutory timeframe. Waiting until the potential shutdown ends might mean missing essential deadlines.
Adding to the confusion is the Government Employee Fair Treatment Act of 2019, under which an employee furloughed pending a lapse of appropriations is entitled to back pay once appropriations for their employing agency are renewed. However, an employee who is terminated under RIF procedures would not be able to recover retroactive pay after their separation date, even if their 60-day notice period overlaps with a shutdown.
With Congress and the White House at a standoff over funding legislation, as many as 900,000 federal employees could be furloughed if there is not a resolution by September 30. This unique pair of shutdown furloughs and expedited layoff procedures provide a legally complex scenario that will likely create significant courtroom action over the next few months.