Nick Langworthy
Congressman Nick Langworthy has announced he has introduced the Federal Workforce Early Separation Incentives Act.
The legislation is designed to modernize an outdated federal workforce volunteer buyout program by increasing financial incentives.
Langworthy said, “By ending the 30-year old cap, and instead tying the retirement incentive to earned income, we will make the VSIP (Voluntary Separation Incentive Payment) more fair and potentially appealing. This legislation brings a common-sense update to a program that has been frozen in time, giving agencies a better option to reduce costs while treating federal employees fairly.”
The bill would update the Voluntary Separation Incentive Payment (VSIP) program, first established in the 1990s, which allows federal agencies to offer buyouts to employees who voluntarily leave government service. While VSIP was intended to reduce payroll costs and avoid disruptive reductions-in-force, the program’s $25,000 cap has not been updated in more than 30 years and has lost its effectiveness due to inflation and rising salaries.
The Federal Workforce Early Separation Incentives Act removes the outdated statutory cap and allows agencies to offer buyouts of up to six months’ pay. By tying the incentive to an employee’s salary, the program would automatically adjust over time and once again serve as an option for workforce downsizing. Langworthy said that while the updated incentives may result in modest upfront costs, they are expected to produce significant long-term savings by reducing future payroll and retirement obligations.
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