[Material Transmitted:]{.underline}

HHS Instruction 351-1, Reduction in Force (RIF)

[Material Superseded:]{.underline}

HHS Instruction 351-1 (all)

[Background:]{.underline}

This Instruction has been revised consistent with recent changes in the
organization of HHS, and in support of HHS administrative initiatives
calling for more streamlined rules and greater delegations of authority.

Delegations of authority have been increased under this instruction.
Heads of OPDIVs now have full authority to approve furloughs and RIFs,
and to revise competitive areas in their organizations.

Any reference to \"OPDIV\" in this instruction now includes the PHS
agencies, the Office of the Secretary, and the Program Support Center as
well as HCFA and ACF.

This issuance is effective immediately. However, changes in

conditions of employment for bargaining unit employees must be
implemented consistent with labor relations responsibilities in 5 U.S.C.
Chapter 71 and provisions of negotiated agreements.

[Filing Instructions:]{.underline}

Remove superseded material and file new material. Post receipt of this
transmittal to the HHS Check List of Transmittals and file this
transmittal in sequential order after the check list

John J. Callahan

Assistant Secretary for

Management and Budget

INSTRUCTION 351-1

MS (PERS) HRFC-001

**[REDUCTION IN FORCE (RIF)]{.underline}**

351-1-00 Purpose and Authority

10 Coverage

20 References

30 Competitive Areas

40 Competitive Levels

50 Discretionary Areas

60 RIFs in the Indian Health Service

70 Outplacement Assistance

80 Statutory Retention (Reemployment) Rights

90 Transfer of Function

Exhibit 351-1-A Delegations of Authority

351-1-00 **PURPOSE AND AUTHORITY**

This Instruction sets forth the Department\'s policy and procedures
concerning reduction in force (RIF), furlough, and related areas. It
supplements the materials on these subjects issued by the Office of
Personnel Management (OPM) and 5 CFR Part 351. It must be used in
conjunction with these issuances and related MSPB and other third party
decisions.

351-1-10 **COVERAGE**

This Instruction covers positions in the competitive and excepted
service. It does not over the Public Health Service (PHS) Commissioned
Corps, the Senior Executive Service (SES) or positions located in
foreign countries that are filled by non-U.S. citizens.

351-1-20 **REFERENCES**

A.  U.S. Code 3502 and 3503 (law\--RIF and transfer of function)

    Public Law 93-638 (Indian Self-Determination Act)

    Public Law 96-135 (reassignment of non-Indians within the Indian
    Health Service)

    CFR 213.3116(b)(8) (excepted appointment authority for persons
    entitled to Indian preference )

    CFR Part 302 (Reemployment Priority for Excepted Service Employees)

    CFR Part 330 (placement assistance programs)

    CFR Part 351 (RIF regulations)

    CFR Part 752 (adverse action)

    CFR 550 (Severance Pay)

    HHS Instructions 430-4 (performance ratings)

351-1-30 **COMPETITIVE AREAS IN HEALTH AND HUMAN SERVICES**

A.  Separate competitive areas are established for the following
    organizations in each commuting area. For purposes of this
    instruction, Washington and Baltimore are considered separate
    commuting areas:

    1.  Office of the Secretary (excluding the Office of the Inspector
        General)

        Office of the Inspector General

        Health Care Financing Administration

        Administration for Children and Families

        Administration on Aging

        The Program Support Center

        Agency for Health Care Policy and Research

        Substance Abuse and Mental Health Services Administration

        Centers for Disease Control and Agency for Toxic Substances and
        Disease Registry

        Food and Drug Administration

        Indian Health Service

        National Institutes of Health

        Health Resources and Services Administration

    Deputy Assistant Secretary for Human Resources (DASHR) must be
    notified in writing immediately upon the establishment of new
    competitive areas.

    If a competitive area will be in effect less than 90 days prior to
    the effective date of a RIF, a description of such competitive area
    must be forwarded to the U.S. Office of Personnel Management for
    approval with a copy to the Deputy Assistant Secretary for Human
    Resources.

351-1-40 **COMPETITIVE LEVELS**

> Personnel offices have the responsibility for establishing competitive
> levels for positions under their appointing authority and issuing
> interchangeability determinations for any standard position
> descriptions which they issue.

351-1-50 **DEPARTMENT POLICY IN DISCRETIONARY AREAS**

> OPDIVS must establish and follow consistent procedures in RIFs for
> regulating the following areas:

A.  [Filling Vacancies]{.underline} in an organization undergoing RIF:
    rules to assure the rights of employees.

    [Waiving Qualifications]{.underline} in the placement/Displacement
    of employees.

    [Displacement within Subgroups]{.underline}

    [Assignment Outside the Competitive Area:]{.underline} rights of
    employees to displace employees outside their competitive area, and
    rights of assignment.

    [Assignment Rights of Excepted Service Employees]{.underline} when
    released from their competitive area.

    [Intergovernmental Personnel Act (IPA) Assignees:]{.underline}
    consider the discretionary exceptions in 5 CFR 351.607. 608

    [Employees on Sick Leave:]{.underline} consider disability
    retirement and the retention of an employee on sick leave as an
    exception to the order of release.

    [Exceptions to the Order of Release]{.underline}

    [Tie Breaking Procedures:]{.underline} These must be a matter of
    record prior to a RIF. Personnel offices may use previously
    established criteria.

    [Use of Performance Ratings]{.underline}

351-1-60 **RIFS IN THE INDIAN HEALTH SERVICE**

A.  When a RIF is conducted in the Indian Health Service, retention
    registers for employees in the competitive service are merged with
    those for employees appointed under the Schedule A 5 CFR
    213.3116(b)(8) authority. Retention registers for employees
    appointed under other authorities are kept separate.

    On the merged registers, employees entitled to Indian preference are
    placed ahead of other employees in a particular subgroup.

    Non-Indians may bump Indians in lower subgroups without prior
    approval. However, the placement of a non-Indian in vacancy requires
    prior ASMB approval under the provisions of Public Law 96-135.

    When determining whether an employee may displace another employee
    by retreat, Indian employees are placed above non-Indian employees
    in the same subgroup. Thus, a non-Indian employee may not displace
    an Indian employee in the same subgroup.

351-1-70 **OUTPLACEMENT ASSISTANCE**

A.  HHS Reemployment Priority List (RPL):

    1.  Basic Policies

        a.  The RPL applies to the competitive service, including
            temporary positions, and to Indian preference appointments.

            The exceptions to the RPL that OPM permits for appointment
            of disabled veterans from OPM registers and OPM options for
            the reinstatement of preference eligibles are permitted in
            HHS.

            Thirty-day special needs appointments and 700-hour
            appointments of individuals with disabilities are permitted
            as exceptions to the RPL.

            Conversions, including the reinstatement of an excepted
            service employee to the competitive service without a break
            in service, are subject to clearance of the RPL. However,
            conversions that are inherent in the appointing authority,
            such as for employees with disabilities on Schedule A
            appointments, are permitted.

            OPM regulations require separate RPL registers for full-time
            and part-time employees. However, it is the Department\'s
            policy that if there are no part-time employees on the RPL

    for a part-time position, full-time employees who have indicated
    availability for part-time positions must be selected ahead of
    applicants from outside the Department, and vice versa. In these
    cases, selections are made in subgroup order.

    1.  Indian Preference Requirements:\
        \
        In the Indian Health Service, employees serving on excepted
        appointments for Indian preference will be registered on the RPL
        along with employees separated from competitive service
        positions. Indian preference RPL candidates must be considered
        and appointed ahead of any non-Indian RPL candidate, regardless
        of the tenure group/subgroup ranking of the non-Indian RPL
        candidate. Indian preference RPL candidates must be considered
        ahead of any Indian preference candidate applying from outside
        of the Department. However, an outside Indian preference
        candidate must be considered and appointed prior to referring
        any non-Indian RPL candidate. Non-Indian candidates entitled to
        priority consideration under the agency\'s RPL will be
        considered only when there are no qualified or available Indian
        preference candidates.

        The Reemployment Priority Coordinator:

        a.  The reemployment priority coordinator is the personnel
            officer or his/her designee who maintains the RPL for a
            commuting area. If employees are being separated from only
            one competitive area in a commuting area, the personnel
            officer with appointing authority over those positions is
            the coordinator. If more than one personnel office has
            appointing authority over employees who are being separated,
            the personnel officer with the largest number is the
            coordinator, unless the affected personnel officers agree
            otherwise.\
            \
            If an installation is closed and there is no longer a
            personnel officer, the DASHR will designate a coordinator.

            The reemployment priority coordinator will notify
            OPDIVS/STAFFDIVS whenever the RPL is activated and will
            distribute RPL clearance requirements to all servicing
            personnel

    offices in the commuting area. Clearance requirements will, at a
    minimum, include a list of the series and grade levels that require
    RPL clearance. Reemployment priority coordinators have discretion to
    establish different operating procedures when dictated by local
    conditions. Servicing personnel offices must document any selections
    from outside the Department to show that the reemployment priority
    list was cleared. If the reemployment priority coordinator and
    another servicing personnel officer cannot resolve a disagreement
    concerning the qualifications of an RPL candidate for a particular
    vacancy, the case will be sent to next organizational level (The
    OPDIV Personnel Officer or the DASHR).

    a.  Employees who do not comply with procedures established by the
        reemployment priority coordinator may be removed from the
        reemployment priority list, provided that the procedures are in
        writing and the employee has been informed in writing that
        his/her noncompliance will result in removal from the list.

351-1-80 **STATUTORY RETENTION (REEMPLOYMENT) RIGHTS BASED ON MILITARY
SERVICE**

The procedures for retaining an employee with statutory retention rights
are as follows:

1.  When all of the positions in his or her competitive level are not
    being abolished, the employee is retained in that competitive level,
    even if employees in the same subgroup with higher standing are
    released.

2.  If an employee is reached for release, a search is made in the
    following order: (a) the competitive area, (b) other competitive
    areas in the commuting area, (c) the Operating Division in other
    commuting areas, and (d) throughout other parts of the Department.
    The employee is entitled to displace any employee who occupies a
    position to which he or she had restoration rights and who has lower
    retention standing, provided that he or she is qualified for that
    position. If no position can be found, the servicing personnel
    officer will contact the DASHR for assistance in locating a
    position.

351-1-90 **TRANSFER OF FUNCTION**

> OPM regulations contain no -prescribed notice period for informing
> employees about a transfer of function. It is the policy of this
> Department that when the transfer involves the movement of employees
> to another commuting area, employees must be notified at least 30
> calendar days in advance of the proposed effective date of the
> transfer and must be given at least 15 calendar days to respond.

HHS 351-1 Exhibit A

**DELEGATIONS OF AUTHORITY**

A.  [Approval of RIF, Furlough, and Changes to Competitive
    Areas]{.underline}\
    \
    Heads of Operating Divisions (including PHS agencies and the Program
    support Center), the Assistant Secretary for Management and Budget
    for the Office of the Secretary (OS), and the Inspector General (for
    OIG) are delegated the authority to approve RIFs, furloughs, and to
    make changes in competitive areas for positions in their
    organizations. These authorities may be redelegate.

    [Requirements\
    ]{.underline}

    1.  [Notification]{.underline}\
        \
        In cases of furloughs, or RIFs involving separation of employees
        , written notification of the proposed action must be received
        by DASHR before specific notices are issued.

        [Transfers of Function]{.underline}\
        \
        No prior approval is required to effect personnel actions
        resulting from transfers of function. However, when the
        transfers involve the movement of employees to other commuting
        areas, the DASHR must be notified in writing before transfer
        offers are made \"to employees.