II 119th CONGRESS 1st Session S. 662 IN THE SENATE OF THE UNITED STATES February 20, 2025 Mr. Sheehy (for himself, Mr. Cramer , and Mrs. Hyde-Smith ) introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs A BILL To amend title 5, United States Code, to provide for an alternative removal for performance or misconduct for Federal employees.

1. Short title; table of contents (a) Short title This Act may be cited as the Modern Employment Reform, Improvement, and Transformation Act of 2025 or the MERIT Act of 2025 . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Termination of authority for chapter 43 performance-based actions. Sec. 3. Adverse actions based on performance or conduct. Sec. 4. Prohibition on grieving adverse actions and reductions in force. Sec. 5. Actions against senior executives for performance or conduct. Sec. 6. Actions against supervisors for performance or conduct. Sec. 7. Modification of procedures for furlough. Sec. 8. Reduction of annuity of employee convicted of a felony for which an adverse action is or would have been taken. Sec. 9. Authority to recoup bonuses or awards paid to employees. Sec. 10. Extension of probationary period for positions within the Senior Executive Service. Sec. 11. Extension of probationary period for employees in the competitive service. Sec. 12. Application. 2. Termination of authority for chapter 43 performance-based actions (a) Repeal Section 4303 of title 5, United States Code, is repealed. (b) Application Subsection (a) shall not apply to any performance-based action under section 4303 of title 5, United States Code, commenced before the effective date provided in section 12. (c) Conforming amendments (1) Title 5 Title 5, United States Code, is amended— (A) in section 2302(e)(1)(A), by striking 3504, and 4303(e) and inserting and 3504 ; (B) in section 4302(c)(6), by striking but only after an opportunity to demonstrate acceptable performance ; (C) in section 7512, by striking subparagraph (D) and redesignating subparagraphs (E) and (F) as subparagraphs (D) and (E), respectively; (D) in section 7701(c)(1), by striking decision and all that follows through preponderance of the evidence and inserting decision is supported by a preponderance of the evidence ; (E) in section 9508(d), by striking (1) In applying and all that follows through (2) ; and (F) in section 9902(a)(2), by striking sections 4302 and 4303(e) and inserting section 4302 . (2) Title 31 Section 732(d)(3) of title 31, United States Code, is amended by striking consistent with section 4303 of title 5 . (d) Clerical amendment The table of sections for chapter 43 of title 5, United States Code, is amended by striking the item relating to section 4303. 3. Adverse actions based on performance or conduct (a) In general Section 7513 of title 5, United States Code, is amended to read as follows: 7513. Cause and procedure for actions other than furlough (a) In general (1) Standard for certain adverse actions Under regulations prescribed by the Office of Personnel Management, an agency may take an action described in paragraphs (1) through (4) of section 7512 against an employee if the agency determines by a preponderance of the evidence that the performance or misconduct of the employee warrants such action. (2) Factors for initial decision When making an initial decision on an action described in paragraphs (1) through (4) of section 7512 with respect to an employee, the deciding employee of the agency shall exclusively apply the following factors: (A) The nature and seriousness of the offense, and its relation to the employee’s duties, position, and responsibilities, including whether the offense— (i) was intentional or technical or inadvertent; (ii) was committed maliciously or for gain; or (iii) was frequently repeated. (B) The employee’s job level and type of employment, including any supervisory or fiduciary role, and the prominence of the position. (C) The employee’s past disciplinary records. (D) The employee’s past work record, including length of service, performance on the job, ability to get along with fellow workers, and dependability. (E) Mitigating circumstances surrounding the offense, such as— (i) unusual job tensions, personality problems, or mental impairment; or (ii) harassment, bad faith, malice, or provocation on the part of others involved in the matter. (3) Standard of review The agency shall— (A) review the initial decision described in paragraph (2), without regard to whether the employee responds under subsection (e)(2); and (B) uphold the initial decision if it is supported by substantial evidence. (b) Pay of certain employees subject to a reduction in grade (1) Applicable rate of pay Notwithstanding any other provision of law, an employee subject to a reduction in grade shall, beginning on the date of the reduction in grade, receive the annual rate of pay applicable to the reduced grade. (2) No administrative leave, or pay without working or use of other leave, during appeal If an employee subject to a reduction in grade appeals the reduction in grade under this section, during the period during which the appeal is ongoing, the employee— (A) may not be placed on administrative leave; and (B) may only receive pay and benefits if the employee— (i) reports for duty; or (ii) is approved to use accrued unused annual, sick, family medical, military, or court leave. (3) Conditions on pay and benefits generally During any period other than a period described in paragraph (2), if an employee subject to a reduction in grade does not report for duty or receive approval to use accrued unused leave, the employee may not receive pay or benefits. (c) Procedure (1) Response period The period during which an employee may respond to a notice of an action described in paragraphs (1) through (4) of section 7512 in writing and furnish affidavits and other documentary evidence in support of the response, as provided under subsection (e)(2), shall be 7 business days. (2) Final decision (A) In general The agency shall issue a final decision with respect to an action described in paragraphs (1) through (4) of section 7512, with respect to an employee, not later than 15 business days after the agency provides notice, including a file containing all the evidence in support of the proposed action, to the employee, unless there is reasonable cause to believe the employee has committed a crime for which a sentence of imprisonment may be imposed. (B) Form and contents A final decision described in subparagraph (A) shall— (i) be in writing; and (ii) include the specific reasons therefor. (d) PIP The agency may carry out an action described in paragraphs (1) through (4) of section 7512 with respect to an employee without first placing the employee on a performance improvement plan. (e) Employee rights An employee against whom an action described in paragraphs (1) through (4) of section 7512 is proposed is entitled to— (1) a written notice stating the specific reasons for the proposed action; (2) respond in writing and furnish affidavits and other documentary evidence in support of the response; (3) be represented by an attorney or other representative; and (4) a written decision and the specific reasons therefor at the earliest practicable date. (f) Hearing An agency may provide, by regulation, for a hearing which may be in lieu of or in addition to the opportunity to respond provided under subsection (e)(2). (g) Appeal An employee against whom an action described in paragraphs (1) through (4) of section 7512 is taken is entitled to appeal to the Merit Systems Protection Board (referred to in this section as the Board ) under section 7701 of this title not later than 10 business days after the effective date of the action. (h) Records (1) Agency records; provision to Board The agency shall maintain, and shall furnish to the Board upon request of the Board, copies of the notice of proposed action, the response of the employee when written, a summary thereof when made orally, the notice of decision and reasons therefor, and any order effecting an action described in paragraphs (1) through (4) of section 7512, together with any supporting material. (2) Provision to employee Upon the request of an affected employee, the agency shall furnish copies of the documents described in paragraph (1) to the employee, to the extent those documents were not provided under subsection (c). . (b) Discipline of supervisors based on retaliation against whistleblowers Section 7515(b)(2)(B) of title 5, United States Code, is amended— (1) in clause (i), by striking not later than 14 days and inserting not later than 7 business days ; and (2) in clause (ii), by striking 14-day period and inserting 7-business-day period . (c) Application The amendments made by subsections (a) and (b) shall not apply to any action under section 7513 or 7515 of title 5, United States Code, as amended by those subsections, respectively, commenced before the effective date provided in section 12. 4. Prohibition on grieving adverse actions and reductions in force Section 7121 of title 5, United States Code, is amended— (1) in subsection (a)(1), by striking the settlement of ; (2) in subsection (c)— (A) by redesignating paragraphs (1) through (5) as paragraphs (5) through (9), respectively; and (B) by inserting before paragraph (5), as so redesignated, the following: (1) an adverse action under subchapter II of chapter 75; (2) a furlough of more than 30 days by a reduction in force action under subchapter I of chapter 35; (3) a separation by a reduction in force action under subchapter I of chapter 35; (4) a demotion by a reduction in force action under subchapter I of chapter 35; ; (3) in subsection (e)— (A) in paragraph (1)— (i) by striking (1) Matters and all that follows through but not both. ; and (ii) in the second sentence, by striking Similar matters and inserting Matters similar to those covered under subchapter II of chapter 75 ; and (B) by striking paragraph (2); and (4) in subsection (f)— (A) by striking the first sentence; and (B) in the second sentence, by striking In matters similar to those covered under sections 4303 and 7512 of this title and inserting In matters similar to those covered under subchapter II of chapter 75 . 5. Actions against senior executives for performance or conduct (a) Repeal of pay retention for career appointees removed from the Senior Executive Service Section 3594(c)(1)(B) of title 5, United States Code, is amended to read as follows: (B) (i) any career appointee placed under subsection (a) or (b)(2) of this section shall be entitled to receive basic pay at the highest of— (I) the rate of basic pay in effect for the position in which placed; (II) the rate of basic pay in effect at the time of the placement for the position the career appointee held in the civil service immediately before being appointed to the Senior Executive Service; or (III) the rate of basic pay in effect for the career appointee immediately before being placed under subsection (a) or (b)(2) of this section; and (ii) any career appointee placed under subsection (b)(1) of this section shall be entitled to receive basic pay at the rate of basic pay in effect for the position in which placed; and . (b) Appraisal system requirements Section 4314(b) of title 5, United States Code, is amended— (1) in paragraph (3), by inserting before the semicolon the following: or, as warranted, from the civil service ; and (2) in paragraph (4), by inserting before the period at the end the following: or, as warranted, from the civil service . (c) Suspension for 14 days or less Paragraph (1) of section 7501 of title 5, United States Code, is amended to read as follows: (1) employee means— (A) an individual in the competitive service who is not serving a probationary period or trial period under an initial appointment or who has completed 1 year of current continuous employment in the same or similar positions under other than a temporary appointment limited to 1 year or less; or (B) a career appointee in the Senior Executive Service who— (i) has completed the probationary period prescribed under section 3393(d); or (ii) was covered by the provisions of subchapter II of this chapter immediately before appointment to the Senior Executive Service; and . (d) Modification of cause and procedure for suspension and termination Section 7543 of title 5, United States Code, is amended to read as follows: 7543. Cause and procedure (a) Standard for adverse actions Under regulations prescribed by the Office of Personnel Management, an agency may take an action covered by this subchapter against an employee if the agency determines by a preponderance of the evidence that the performance or misconduct of the employee warrants such action. (b) Factors for initial decision When making an initial decision on an action covered by this subchapter, the deciding employee of the agency shall exclusively apply the following factors: (1) The nature and seriousness of the offense, and its relation to the employee’s duties, position, and responsibilities, including whether the offense— (A) was intentional or technical or inadvertent; (B) was committed maliciously or for gain; or (C) was frequently repeated. (2) The employee’s job level and type of employment, including any supervisory or fiduciary role, and the prominence of the position. (c) Standard of review The agency shall— (1) review the initial decision described in subsection (b), without regard to whether the employee responds under subsection (e)(2); and (2) uphold the decision if it is supported by substantial evidence. (d) Procedure (1) Response period The period during which an employee may respond to a notice of an action covered by this subchapter in writing and furnish affidavits and other documentary evidence in support of the response, as provided under subsection (e)(2), shall be 7 business days. (2) Final decision (A) In general The agency shall issue a final decision with respect to an action covered by this subchapter not later than 15 business days after the agency provides notice, including a file containing all the evidence in support of the proposed action, to the employee, unless there is reasonable cause to believe the employee has committed a crime for which a sentence of imprisonment may be imposed. (B) Form and contents A final decision described in subparagraph (A) shall— (i) be in writing; and (ii) include the specific reasons therefor. (e) Employee rights An employee against whom an action covered by this subchapter is proposed is entitled to— (1) a written notice stating the specific reasons for the proposed action; (2) respond in writing and furnish affidavits and other documentary evidence in support of the response; (3) be represented by an attorney or other representative; and (4) a written decision and the specific reasons therefor at the earliest practicable date. (f) Hearing An agency may provide, by regulation, for a hearing which may be in lieu of or in addition to the opportunity to respond provided under subsection (e)(2). (g) Appeal An employee against whom an action is taken under this section is entitled to appeal to the Merit Systems Protection Board (referred to in this section as the Board ) under section 7701 of this title not later than 10 business days after the effective date of the action. (h) Records (1) Agency records; provision to Board The agency shall maintain, and shall furnish to the Board upon request of the Board, copies of the notice of proposed action, the response of the employee when written, a summary thereof when made orally, the notice of decision and reasons therefor, and any order effecting an action covered by this subchapter, together with any supporting material. (2) Provision to employee Upon the request of an affected employee, the agency shall furnish copies of the documents described in paragraph (1) to the employee, to the extent those documents were not provided under subsection (d)(2)(A). (i) Definition In this section, the term misconduct includes neglect of duty, malfeasance, or failure to accept a directed reassignment or to accompany a position in a transfer of function. . (e) Relation to other provisions of law Section 3592(b)(1) of title 5, United States Code, shall not apply to an action under section 7543(a) of that title, as amended by subsection (d). (f) Conforming amendments Title 5, United States Code, is amended— (1) in section 3592(b)(2)(B), by striking any disciplinary action and inserting any action under section 7543 ; (2) in section 3593(a)(2), by striking misconduct, neglect of duty, malfeasance, and inserting a removal under section 7543 ; (3) in section 3594, by adding at the end the following: (d) This section shall not apply to any career appointee who is subject to a personnel action under subchapter V of chapter 75. ; and (4) in section 7542, by striking or to a removal under section 3592 or 3595 and inserting the following: to a removal from the Senior Executive Service under section 3592 of this title, to a reduction in force as defined in section 3595(d) of this title, or to a transfer of function as described in section 3595(e) . (g) Application The amendments made by this section shall not apply to any personnel action under subchapter V of chapter 75 of title 5, United States Code, commenced before the effective date provided in section 12 of this Act. 6. Actions against supervisors for performance or conduct Subchapter II of title 5, United States Code, is amended— (1) by redesignating sections 7514 and 7515 as sections 7516 and 7517, respectively; and (2) by inserting after section 7513 the following: 7514. Supervisors (a) Definition In this section, the term supervisor has the meaning given that term in section 7103(a). (b) Standard for adverse actions An agency may take an action covered by this subchapter against a supervisor if the agency determines by a preponderance of the evidence that the performance or misconduct of the supervisor warrants such action. (c) Factors for initial decision When making an initial decision on an action covered by this subchapter with respect to a supervisor, the deciding employee of the agency shall exclusively apply the following factors: (1) The nature and seriousness of the offense, and its relation to the supervisor’s duties, position, and responsibilities, including whether the offense— (A) was intentional or technical or inadvertent; (B) was committed maliciously or for gain; or (C) was frequently repeated. (2) The supervisor’s job level and type of employment, including the supervisory role and any fiduciary role, and the prominence of the position. (d) Standard of review The agency shall— (1) review the initial decision described in subsection (c), without regard to whether the supervisor responds under subsection (g)(2); and (2) uphold the initial decision if it is supported by substantial evidence. (e) Procedure (1) Response period The period during which a supervisor may respond to a notice of an action covered by this subchapter in writing and furnish affidavits and other documentary evidence in support of the response, as provided under subsection (g)(2), shall be 7 business days. (2) Final decision (A) In general The agency shall issue a final decision with respect to a covered action not later than 15 business days after the agency provides notice, including a file containing all the evidence in support of the proposed action, to the supervisor, unless there is reasonable cause to believe the supervisor has committed a crime for which a sentence of imprisonment may be imposed. (B) Form and contents A final decision described in subparagraph (A) shall— (i) be in writing; and (ii) include the specific reasons therefor. (f) Reduction in grade (1) In general A reduction in grade under subsection (b) with respect to a supervisor shall be carried out as a reduction in grade— (A) for which the supervisor is qualified; (B) that the agency determines is appropriate; and (C) that reduces the annual rate of pay of the supervisor. (2) Pay of certain supervisors subject to a reduction in grade (A) Applicable rate of pay Notwithstanding any other provision of law, a supervisor subject to a reduction in grade shall, beginning on the date of the reduction in grade, receive the annual rate of pay applicable to the reduced grade. (B) No administrative leave, or pay without working or use of other leave, during appeal If a supervisor subject to a reduction in grade appeals the reduction in grade under this section, during the period during which the appeal is ongoing, the supervisor— (i) may not be placed on administrative leave; and (ii) may only receive pay and benefits if the supervisor— (I) reports for duty; or (II) is approved to use accrued unused annual, sick, family medical, military, or court leave. (C) Conditions on pay and benefits generally During any period other than a period described in subparagraph (B), if a supervisor subject to a reduction in grade does not report for duty or receive approval to use accrued unused leave, the supervisor shall not receive pay or benefits. (g) Supervisor rights A supervisor against whom an action covered by this subchapter is proposed is entitled to— (1) a written notice stating the specific reasons for the proposed action; (2) respond in writing and furnish affidavits and other documentary evidence in support of the response; (3) be represented by an attorney or other representative; and (4) a written decision and the specific reasons therefor at the earliest practicable date. (h) PIP The agency may carry out an action covered by this subchapter with respect to a supervisor without first placing the supervisor on a performance improvement plan. (i) Relation to performance appraisal procedures The procedures under chapter 43 shall not apply to an action covered by this subchapter with respect to a supervisor. . 7. Modification of procedures for furlough (a) General furlough of 14 days or less; emergency furlough Subchapter I of chapter 75 of title 5, United States Code, is amended— (1) in section 7501, as amended by section 5(c)— (A) by redesignating paragraphs (1) and (2) as paragraphs (2) and (5), respectively; (B) by inserting before paragraph (2), as so redesignated, the following: (1) emergency furlough means a furlough due to a lapse in appropriations; ; (C) in paragraph (2), as so redesignated, by striking and at the end; and (D) by inserting after paragraph (2), as so redesignated, the following: (3) furlough has the meaning given that term in section 7511(a); (4) general furlough means a furlough that is not due to a lapse in appropriations; and ; (2) in section 7502, by striking This subchapter and all that follows through this title. and inserting the following: This subchapter applies to— (1) a suspension for 14 days or less, but not a suspension under section 7521 or 7532 or any action initiated under section 1215; (2) a general furlough for 14 days or less; and (3) an emergency furlough of any duration. ; (3) by redesignating section 7504 as section 7505; and (4) by inserting after section 7503 the following: 7504. General furlough and emergency furlough cause and procedure (a) Definition In this section, the term employee has the meaning given the term in section 7501. (b) General furlough (1) In general An employee may be subject to a general furlough for such cause as will promote the efficiency of the service. (2) Entitlement to procedures Any employee furloughed under this subsection is entitled to the procedures established under the regulations promulgated under paragraph (3). (3) Procedures Not later than 180 days after the date of enactment of this section, the Office of Personnel Management shall promulgate regulations providing for— (A) the circumstances under which an employee may be furloughed under this subsection; (B) the procedures to be afforded furloughed employees, including, to the extent appropriate and practicable under the circumstances of the furlough action— (i) a written notice stating the specific reasons for the proposed action; (ii) representation by an attorney or other representative; and (iii) a written decision and the specific reasons therefor at the earliest practicable date; and (C) the materials that shall be furnished to a furloughed employee and the Merit Systems Protection Board upon request of the employee or the Board. (c) Emergency furlough (1) In general An employee may be subject to an emergency furlough. (2) Procedures (A) Notice (i) In general Under regulations prescribed by the Office of Personnel Management, any employee subject to an emergency furlough shall be afforded notice explaining the reasons for the emergency furlough. (ii) Timing If the notice described in clause (i) cannot be provided in advance of the emergency furlough, notice shall be provided as soon as reasonably practicable. (B) Other procedures No other procedures, including those provided under subsection (b) or any other provision of this title, shall be available to any employee subject to an emergency furlough under this subsection. . (b) General furlough of more than 14 days Subchapter II of chapter 75 of title 5, United States Code, is amended— (1) in section 7511(a)(5), by inserting before the period the following: , but does not include an emergency furlough as defined in section 7501 ; (2) in section 7512, as amended by section 2(c)— (A) in paragraph (5), by striking a furlough of 30 days or less and inserting a furlough of more than 14 days but less than 31 days ; (B) in subparagraph (D), as redesignated by section 2(c), by striking or at the end; (C) in subparagraph (E), as redesignated by section 2(c), by striking the period at the end and inserting , or ; and (D) by adding at the end the following: (F) an emergency furlough action under section 7504. ; and (3) by inserting after section 7514, as added by section 6, the following: 7515. Furlough cause and procedure (a) In general An employee may be subject to a furlough for such cause as will promote the efficiency of the service. (b) Entitlement to procedures Any employee furloughed under this section is entitled to the procedures established under the regulations promulgated under subsection (c). (c) Procedures Not later than 180 days after the date of enactment of this section, the Office of Personnel Management shall promulgate regulations providing for— (1) the circumstances under which an employee may be furloughed under this section; (2) the procedures provided under section 7513 to the extent appropriate and practicable under the circumstances of the furlough action; and (3) the materials that shall be furnished to a furloughed employee and the Merit Systems Protection Board upon request of the employee or the Board. (d) Appeal An employee against whom a furlough action is taken under this section is entitled to appeal to the Merit Systems Protection Board under section 7701 not later than 10 business days after the effective date of the action. . (c) Administrative law judges Section 7521(b) of title 5, United States Code, is amended— (1) in subparagraph (B), by striking or at the end; (2) in subparagraph (C), by striking the period at the end and inserting ; or ; and (3) by adding at the end the following: (D) an emergency furlough action under section 7504. . (d) Technical amendments (1) Section 7503 The heading of section 7503 of title 5, United States Code, is amended by striking Cause and procedure and inserting Suspension cause and procedure . (2) Section 7513 Section 7513 of title 5, United States Code, is amended by striking Cause and procedure and inserting Cause and procedure for actions other than furlough . (e) Clerical amendments (1) Subchapter I of chapter 75 of title 5 The table of sections for subchapter I of chapter 75 of title 5, United States Code, is amended by striking the items relating to sections 7503 and 7504 and inserting the following: 7503. Suspension cause and procedure. 7504. General furlough and emergency furlough cause and procedure. 7505. Regulations. . (2) Subchapter II of chapter 75 of title 5 The table of sections for subchapter II of chapter 75 of title 5, United States Code, is amended by striking the items relating to sections 7513 through 7515 and inserting the following: 7513. Cause and procedure for actions other than furlough. 7514. Supervisors. 7515. Furlough cause and procedure. 7516. Regulations. 7517. Discipline of supervisors based on retaliation against whistleblowers. . (f) Application Notwithstanding section 12, the amendments made by this section shall take effect on the earlier of— (1) the date that is 180 days after the date of enactment of this Act; or (2) the date on which the Office of Personnel Management promulgates regulations under sections 7504 and 7515 of title 5, United States Code, as added by this section. 8. Reduction of annuity of employee convicted of a felony for which an adverse action is or would have been taken (a) Reduction of annuity of employee convicted of a felony for which an adverse action is taken (1) In general Subchapter II of chapter 83 of title 5, United States Code, is amended by adding at the end the following: 8323. Reduction of benefits of employees convicted of certain crimes (a) Reduction of annuity (1) In general The felonious service of a covered individual shall not be taken into account for purposes of calculating an annuity with respect to the individual under subchapter III of this chapter or chapter 84 if— (A) the covered individual is finally convicted of a felony; and (B) the head of the agency at which the individual was employed determines that the conviction was based on the acts or omissions of the covered individual that— (i) were taken or not taken in the performance of the covered individual’s official duties at the agency; and (ii) are sufficient to support a removal action under section 7513 or 7543, or any other provision of law, against the covered individual. (2) Procedures A covered individual against whom a determination is made under paragraph (1) shall be afforded— (A) notice of the determination not later than 15 business days in advance of a final order under paragraph (3); and (B) an opportunity to respond to the determination by not later than 10 business days after receipt of the notice. (3) Final order The head of the agency shall issue a final order to carry out paragraph (1) not later than— (A) in the case of a covered individual who responds under paragraph (2)(B), 5 business days after receiving the response from the covered individual, to the maximum extent practicable; or (B) in the case of a covered individual who does not so respond, 15 business days after the date on which the head of the agency provided notice to the individual under paragraph (2)(A), to the maximum extent practicable. (4) Appeal A covered individual with respect to whom an annuity is to be reduced under this subsection may appeal the final order under paragraph (3) to the Merit Systems Protection Board in accordance with any regulations that the Board may prescribe for purposes of this subsection. An appeal may not be made under this paragraph later than that date that is 10 business days after the date on which an order is issued under paragraph (3). (b) Administrative requirements (1) In general Not later than 30 business days after the date on which the head of an agency issues a final order under subsection (a) or a final decision of the Merit Systems Protection Board is rendered (as the case may be) with respect to an individual, the applicable employing agency shall amend the covered individual’s retirement records to reflect the period of service that is no longer creditable by operation of this section and transmit the amended records to the Director of the Office of Personnel Management. (2) Annuitants With respect to any covered individual who is an annuitant on the date on which a final order is so issued, the Director of the Office of Personnel Management shall, not later than 30 business days after the receipt of amended retirement records from an agency under paragraph (1), recalculate the annuity of the annuitant. (c) Lump-Sum annuity credit A covered individual with respect to whom an annuity is reduced under subsection (a) shall be entitled to be paid so much of the individual’s lump-sum credit as is attributable to the period of felonious service. (d) Spouse exception The spouse of any covered individual referred to in subsection (a) shall be eligible for spousal annuity benefits that, but for subsection (a), would otherwise have been payable if the Attorney General of the United States or the attorney general of a State, a territory, or the District of Columbia determines that the spouse fully cooperated with authorities in the conduct of a criminal investigation and subsequent prosecution of the individual that resulted in the benefit reduction. (e) Application Nothing in this section shall be construed to affect or otherwise mitigate the application of any other section of this subchapter. (f) Definitions In this section— (1) the term covered individual means— (A) an individual who is removed from a position as an employee (as defined in section 2105) in the civil service for performance or misconduct under section 7513 or 7543, or any other provision of law; or (B) an individual who— (i) is an employee (as defined in section 2105) subject to a removal action for performance or misconduct under section 7513, 7543, or any other provision of law; and (ii) voluntarily separates from service with the employing agency prior to the issuance of a final decision with respect to the removal action; (2) the term felonious service means, with respect to a covered individual, the period of service— (A) beginning on the date on which the head of the employing agency determines that the individual commenced engaging in the acts or omissions that gave rise to the removal action or proposed removal action described in paragraph (1); and (B) ending on the date that is the earlier of— (i) the date on which the individual is removed from or voluntarily separates from a position at the agency; or (ii) the date on which the individual ceases engaging in the acts or omissions that gave rise to the removal action or proposed removal action described in paragraph (1); (3) the term finally convicted or final conviction refers to a conviction of a felony— (A) that has not been appealed and is no longer appealable because the time for taking an appeal has expired; or (B) that has been appealed and the appeals process for which is completed; (4) the term lump-sum credit has the meaning given that term in section 8331(8) or 8401(19) (as the case may be); and (5) the term service has the meaning given that term in section 8331(12) or 8401(26) (as the case may be). . (2) Clerical amendment The table of sections for subchapter II of chapter 83 of title 5, United States Code, is amended by adding at the end the following: 8323. Reduction of benefits of employees convicted of certain crimes. . (b) Application Section 8323 of title 5, United States Code, as added by subsection (a), shall apply to acts or omissions described in subsection (a)(1)(B) of that section occurring after the date of enactment of this Act. (c) Regulations The Office of Personnel Management may prescribe regulations to carry out this section and the amendments made by this section. 9. Authority to recoup bonuses or awards paid to employees (a) Adverse findings and employees under investigation Chapter 45 of title 5, United States Code, is amended by adding at the end the following: IV Limitations on bonus authority 4531. Certain forms of misconduct (a) Definitions In this section: (1) Adverse finding (A) In general The term adverse finding means a determination by the head of the agency employing an employee that the conduct of the employee— (i) violated a policy of the agency for which the employee may be removed or suspended for a period of not less than 14 days; or (ii) violated a law for which the employee may be imprisoned for more than 1 year. (B) Basis A determination described in subparagraph (A) may be based on an investigation by, a determination of, or information provided by the Inspector General or another senior ethics official of an agency or the Comptroller General of the United States, as part of carrying out an activity, authority, or function of the Inspector General, senior ethics official, or Comptroller General, respectively, under a provision of law other than this section. (2) Agency The term agency has the meaning given the term in section 551. (3) Bonus The term bonus means any performance award or cash award under— (A) section 4505a; (B) section 5384; or (C) section 5754. (4) Employee The term employee means an employee of an agency. (b) Prohibition The head of an agency may not award a bonus to an employee of the agency until the date that is 5 years after the end of the fiscal year during which the head of the agency makes an adverse finding relating to the employee. (c) After bonus awarded (1) In general For a bonus awarded to an employee after the date of enactment of this section, if the head of the agency employing the employee makes an adverse finding relating to the employee during the fiscal year in which the bonus is awarded, the head of the agency, after notice and an opportunity for a hearing, shall issue an order directing the employee to repay the amount of the bonus. (2) Repayment plan An agency shall allow an employee who is required to repay a bonus under paragraph (1) to repay that bonus using a repayment plan. (3) Hearings A hearing under this subsection shall be conducted in accordance with regulations relating to hearings promulgated by the head of the agency under chapter 75. (d) Condition of receipt As a condition of receiving a bonus awarded after the date of enactment of this section, an employee shall sign a certification stating that the employee shall repay the bonus in accordance with a final order issued under subsection (c). (e) Appeal An employee determined to be ineligible for a bonus under subsection (b) or against whom an order is issued under subsection (c) may submit an appeal to the Merit Systems Protection Board under section 7701. (f) Rulemaking The head of an agency may promulgate rules to carry out this section. . (b) Technical and conforming amendment The table of sections for chapter 45 of title 5, United States Code, is amended by adding at the end the following: SUBCHAPTER IV—Limitations on bonus authority 4531. Certain forms of misconduct. . 10. Extension of probationary period for positions within the Senior Executive Service (a) In general Section 3393(d) of title 5, United States Code, is amended by striking 1-year and inserting 2-year . (b) Conforming amendment Section 3592(a)(1) of title 5, United States Code, is amended by striking 1-year and inserting 2-year . (c) Application The amendments made by this section shall apply in the case of any individual initially appointed as a career appointee under section 3393 of title 5, United States Code, on or after the effective date provided in section 12 of this Act. 11. Extension of probationary period for employees in the competitive service (a) Extension of probationary period (1) In general Section 3321 of title 5, United States Code, is amended— (A) in subsection (a), by striking The President and inserting Subject to subsections (c) and (d), the President ; (B) by redesignating subsection (c) as subsection (e); and (C) by inserting after subsection (b) the following: (c) (1) The length of a probationary period established under paragraph (1) or (2) of subsection (a) shall— (A) with respect to any position that requires formal training, begin on the date of the appointment to the position and end on the date that is 2 years after the date on which the formal training is completed; (B) with respect to any position that requires a license, begin on the date of the appointment to the position and end on the date that is 2 years after the date of the appointment or the date on which the license is granted, whichever is later; and (C) with respect to any position not covered by subparagraph (A) or (B), be a period of 2 years beginning on the date of the appointment to the position. (2) For purposes of paragraph (1)— (A) the term formal training means, with respect to any position, a training program required by law, rule, or regulation, or otherwise required by the employing agency, to be completed by the employee before the employee is able to successfully execute the duties of the applicable position; and (B) the term license means a license, certification, or other grant of permission to engage in a particular activity. (d) The head of each agency shall, in the administration of this section, take appropriate measures to ensure that— (1) any announcement of a vacant position and any offer of appointment made to an individual with respect to a vacant position clearly states the terms and conditions of any applicable probationary period, including any formal training period and any license requirement; (2) any individual who is required to complete a probationary period under this section receives timely notice of any requirements, including performance requirements, that must be met in order to satisfactorily complete that period; (3) any supervisor or manager of an individual who is required to complete a probationary period under this section receives periodic notifications of the end date of that period not later than 1 year, 6 months, 3 months, and 30 days before the end date; and (4) if the agency head decides to retain an individual after the completion of a probationary period under this section, the agency head submits a certification to that effect to the President, supported by a brief statement of the basis for the certification, in such form and manner as the President may by regulation prescribe. . (2) Technical amendment Section 3321(e) of title 5, United States Code (as so redesignated by paragraph (1)), is amended by striking Subsections (a) and (b) and inserting Subsections (a) through (d) . (3) Application This subsection and the amendments made by this subsection shall apply in the case of any appointment (as referred to in section 3321(a)(1) of title 5, United States Code) and any initial appointment (as referred to in section 3321(a)(2) of that title) taking effect on or after the effective date provided in section 12 of this Act. (b) Adverse actions (1) Subchapter I of chapter 75 of title 5 Section 7501(2) of title 5, United States Code, as so redesignated by section 7(a)(1), is amended by striking or who has completed 1 year of current and inserting and who has completed 2 years of current . (2) Subchapter II of chapter 75 of title 5 Section 7511(a)(1) of title 5, United States Code, is amended— (A) in subparagraph (A)— (i) in clause (i), by striking ; or and inserting ; and ; and (ii) in clause (ii), by striking 1 year the first place it appears and inserting 2 years ; (B) in subparagraph (B), by striking 1 year and inserting 2 years ; and (C) in subparagraph (C)(i), by striking ; or and inserting ; and . (3) Application The amendments made by paragraphs (1) and (2) shall apply in the case of any individual whose period of continuous service commences on or after the effective date provided in section 12. (c) Regulations The Office of Personnel Management may prescribe regulations to carry out this section and the amendments made by this section. 12. Application (a) Effective date Unless otherwise specifically provided for in this Act, the amendments made by this Act shall take effect on the date that is 1 year after the date of enactment of this Act. (b) Collective bargaining agreements Notwithstanding any other provision of law, the procedures established or amended by this Act shall supersede any collective bargaining agreement to the extent that the agreement is inconsistent with those procedures. (c) Definition of business day For purposes of carrying out this Act and the amendments made by this Act, the term business day means any day other than a Saturday, Sunday, or legal public holiday under section 6103(a) of title 5, United States Code.