Office of Personnel Management finalizes rule offering VA workers a process to contest demands to return bonuses and relocation payments
Washington, D.C., August 1, 2025 — The Office of Personnel Management has issued a final rule that for the first time gives current and former Department of Veterans Affairs employees a formal path to challenge orders demanding they repay awards, bonuses or relocation expenses. The regulation, published July 25 in the Federal Register and set to take effect on August 25, creates a new 5 CFR Part 755 and places the OPM director—not the Merit Systems Protection Board—in the role of deciding these appeals.
The appeal right stems from the VA Accountability and Whistleblower Protection Act of 2017, which empowered the VA secretary to claw back payments when misconduct, poor performance, fraud or malfeasance tainted the original award. Until now, employees receiving a recoupment order had no clear government‑wide procedure for review, leaving both the VA and its workforce in procedural limbo.
Under the rule, a staff member has seven business days after the VA issues its order to file an appeal with OPM; the agency must then supply the full evidence file, and OPM must issue a written decision within 30 business days. Employees may choose either this new route or their negotiated grievance procedure—but not both—and an election made in error will end the OPM review.
OPM finalized the rule after receiving comments from employees, a union, and outside organizations that urged safeguards to ensure meaningful review and timely decisions. The final text keeps the tight deadlines but clarifies document‑sharing responsibilities and confirms that decisions will be posted publicly, redacted for privacy, to build precedent.
Why it matters: the VA is the federal government’s largest civilian agency and routinely pays performance awards that can reach tens of thousands of dollars. Giving employees a swift, independent appeal protects due‑process rights while reinforcing the VA secretary’s power to claw back funds in egregious cases.
Employees of the VA who have received, or may soon receive, a VA recoupment notice should mark the seven‑business‑day appeal window, gather all material showing their performance record and the basis for the original award, and decide quickly whether an OPM appeal or a union grievance gives the stronger forum. Because the final rule compels OPM to decide in 30 business days, incomplete filings could forfeit repayment defenses.
Employees worried about overlapping debts—such as separate payroll overpayments still handled under 5 U.S.C. 5584—should consider specialized counsel to avoid conflicting deadlines. The Law Office of Justin Schnitzer will continue monitoring OPM decisions and is prepared to advise employees or former employees facing repayment demands.