H.R. 201

119th CONGRESS 1st Session

To implement a 5-year pilot program establishing a performance-based pay structure for certain Federal employees in order to enhance productivity, accountability, and employee satisfaction in public service.

IN THE HOUSE OF REPRESENTATIVES · January 3, 2025 · Sponsor: Ms. Tenney · Committee: Committee on Oversight and Government Reform

H.R. 201

SEC. 1. Short title

This Act may be cited as the Federal Employee Performance and Accountability Act of 2025.

SEC. 2. Definitions

In this Act:
- The term Director means the Director of the Office of Management and Budget.
- The term eligible employee means an employee of an Executive agency employed in a position that—
- The term Executive agency has the meaning given the term in section 105 of title 5, United States Code.
- The term participating agency means an Executive agency, 1 or more employees of which are participating employees in accordance with section 3(b)(1).
- The term participating employee means an eligible employee who participates in the Program.
- The term , with respect to a participating agency, means standards for participating employees tailored to functions that are specific to the participating agency, which may include— performance metrics
- The term Program means the pilot program established under section 3(a).

SEC. 3. Pilot program eligibility and program scope

(a) In general
- During the 5-year period beginning on the date that is 180 days after the date of enactment of this Act, the Director shall carry out a pilot program that establishes a performance-based pay structure for participating employees.
- In general
(b) Participation
- (1) In general
  - Subject to paragraph (2), the head of each Executive agency shall ensure that not less than 1 percent and not more than 10 percent of eligible employees of the Executive agency participate in the Program.
  - In general
- (2) Opt-out
  - (A) In general
    - The head of an Executive agency may elect to not have the Executive agency participate in the Program if the head of the Executive agency determines that participation could pose risks to national security or public safety.
    - In general
  - (B) Transparency requirement
    - If the head of an Executive agency determines that the Executive agency should not participate in the Program pursuant to subparagraph (A), the head of the Executive agency shall submit to the Director a written justification for the decision.

SEC. 4. Performance measurement and accountability

(a) Annual performance metrics
- A participating agency shall establish annual performance metrics for each participating employee related to core functions and public service delivery, focusing on productivity, quality, and timeliness.
(b) Evaluation process
- The Director shall establish, and each participating agency shall implement, a standardized, objective performance evaluation system that includes periodic review of the performance of a participating employee.
(c) Employee support and training
- A participating agency shall provide training and resources to support participating employees in understanding and meeting performance metrics, including an introductory training course and quarterly performance feedback sessions.

SEC. 5. Incentive pay structure and non-monetary benefits

(a) Tiered salary increase structure
- (1) In general
  - A participating agency shall implement a tiered salary adjustment system for participating employees based on their annual performance evaluations under section 4 under which, effective as of the first day of the first applicable pay period beginning on or after the first day of the second year of the Program, and of each year thereafter, a participating agency shall adjust (if applicable) the rate of basic pay of a participating employee in accordance with this subsection.
  - In general
- (2) Tier 1 (exceeds expectations)
  - In the case of a participating employee who significantly exceeded established performance metrics during the preceding year (referred to in this section as a ), a participating agency shall increase the rate of basic pay of the participating employee by not more than 10 percent. tier 1 employee
- (3) Tier 2 (meets expectations)
  - In the case of a participating employee who met established performance metrics during the preceding year (referred to in this section as a ), a participating agency may not adjust the rate of basic pay of the participating employee. tier 2 employee
- (4) Tier 3 (below expectations)
  - In the case of a participating employee who did not meet established performance metrics during the preceding year (referred to in this section as a ), the participating agency shall— tier 3 employee
    - reduce the rate of basic pay of the participating employee by 10 percent; and
    - provide training or development opportunities to assist the participating employee in improving performance.
(b) Bonuses
- The head of a participating agency, at the discretion of the agency head, may award a bonus to a tier 1 employee.
(c) Non-Monetary benefits
- The head of a participating agency, at the discretion of the agency head, may provide a tier 1 employee or tier 2 employee with flexible scheduling, telework options, and other non-monetary benefits or incentives, such as technology upgrades and parking options.
- Non-Monetary benefits
(d) Relation to title 5 pay adjustments, step-Increases, and other monetary benefits
- A participating employee shall not be eligible for any adjustment of pay, advancement in pay, or bonus or other type of additional monetary compensation under title 5, United States Code, based on any service performed while the employee is participating in the Program, including—
  - adjustment of the rate of basic pay under section 5303, 5304, or 5304a of that title;
  - advancement in pay to a higher rate within the grade in which the employee's position is placed under section 5335 or 5336 of that title;
  - bonuses under section 5753 or 5754 of that title; and
  - performance awards under section 5384 of that title.

SEC. 6. Reporting and accountability

(a) Annual agency productivity reports
- (1) In general
  - For each year in which the Program is carried out, a participating agency shall submit a report to the Director that includes the following information:
  - In general
  - (A) Quantitative outcomes
    - Data on cost savings, efficiency gains, and overall productivity metrics.
  - (B) Qualitative outcomes
    - Examples of how productivity improvements have positively impacted public service outcomes and employee satisfaction.
- (2) OMB oversight and recommendations
  - The Director shall—
    - review each report submitted under paragraph (1); and
    - recommend adjustments to participating agencies as appropriate.
(b) Annual OMB assessments
- For each year in which the Program is carried out, the Director shall—
  - assess the outcomes of the Program with respect to productivity, budgetary impact, and employee satisfaction; and
  - publish and submit to Congress a report on the assessment conducted under paragraph (1).
(c) Final review
- Not later than 1 year after the date on which the Program terminates, the Comptroller General of the United States and the Director shall assess the success of the Program and submit to Congress a report on the impact of the Program on productivity, budgets, and employee engagement.

SEC. 7. Funding

(a) No additional funds
- No additional funds are authorized to be appropriated to carry out this Act.
- No additional funds
(b) Use of existing funds
- The Office of Management and Budget, the Government Accountability Office, and each participating agency shall carry out the duties of the respective agency under this Act using amounts otherwise made available to that agency.