USPS Layoffs Would Have Significant Costs

The Office of Personnel Management website lists the separation benefits of employees laid-off as part of a RIF.  It is clear that laying off employees is not cheap especially as many of the employees will have more than 10 years of service and be over 40 years of age.  Also, laying off employees will increase the Postal Service's unemployment insurance costs.  

Calculating what these costs could be is not hard from publicly available data but I will leave that to someone who works for an organization who would be harmed by significant layoffs.

Benefits for Separated Employees

Severance Pay

• If you are about to be separated from a permanent position involuntarily and through no fault of your own, you will likely be eligible for severance pay. To be eligible, you must not have refused an offer of a position that is (1) in the same commuting area, (2) in the same agency, and (3) no more than two grades below your current grade level. In addition, you must have been employed for at least 12 continuous months, and cannot be eligible for an immediate annuity from a federal civilian retirement system or from the uniformed services. Also, you must not be receiving workers' compensation benefits for wage loss due to an on-the-job injury.

Computation of Severance Pay:

• Only civilian service is creditable for severance pay. You will be entitled to 1 week's basic pay for each year of civilian service up through 10 years, plus 2 weeks' basic pay for each year of creditable service beyond 10 years. In addition, an age adjustment allowance of 2.5 percent is added for each full quarter of a year you are over 40 years of age. The maximum amount of severance pay is one year's salary (52 weeks). (This is a lifetime limitation. Thus, any severance pay you may have received in the past is taken into account when applying the limit.) Severance payments will be equal to your weekly pay at the time of separation and will be paid out at regular pay period intervals (usually biweekly) until the severance pay is exhausted. The only deductions made from severance pay are taxes, social security (if applicable), and Medicare.
• Severance pay estimation sheets are located at the end of this guide. The actual calculation formula is somewhat more complicated and technical. The samples are intended to help compute the approximate amount of severance pay you might receive. To receive an actual computation, please contact your servicing human resources office.
• If you are reemployed in a permanent position with the Federal government or the District of Columbia, severance payments will be stopped immediately. If you are reemployed in the Federal government on a temporary appointment after a break of more than 3 calendar days, severance pay will be temporarily suspended. When your temporary appointment ends, the agency will restart the unexpired portion of your severance pay. If you accept a temporary appointment with the Federal government within 3 calendar days of separation and subsequently leave that temporary job on an involuntary basis (e.g., expiration of appointment), you are eligible for severance pay based on the separation from the temporary job. Severance pay would be recalculated based on your rate of pay when you separated from the temporary job. Employment in the private sector has no effect on your right to receive severance pay from the Federal government.

Unemployment Compensation

• The Department of Labor administers the unemployment insurance program for Federal employees through State governments. States, including the District of Columbia, determine the eligibility for benefits and the amounts to be paid to unemployed individuals. The program provides a weekly income for a limited period of time. The laws of the State or jurisdiction determine the amount of benefits and length of time they will be received. If you were separated you should file a claim for benefits at your State Employment Service office or unemployment insurance claims office. These State offices also allow you to register for potential employment opportunities. You must present your social security card, official notice of separation or non-pay status (Standard Form 50), specific RIF notice letter, and unemployment insurance notice (Standard Form 8). The Department of Labor's web site is http://www.doleta.gov. OPM's website for "one-stop" retraining services information is http://www.opm.gov/rif/general/onestop.asp.

Unused Annual Leave

• All civilian employees covered by annual leave laws are entitled to receive a lump sum payment for accrued annual leave when separated from the Federal government.
• If you are close to retirement age, you may be able to use annual leave to qualify for retirement benefits in some cases. See the retirement section later in this guide for more information.

Unused Sick Leave

• You will not be paid for unused sick leave. However, if you are separated from the Federal government you are entitled to have your sick leave restored to your sick leave account if you are reemployed in the Federal government. Also, all unused sick leave will be added to your total service if you are eligible for an annuity under the Civil Service Retirement System (CSRS). If you are a Federal Employees Retirement System (FERS) employee who switched from CSRS, your unused sick leave balance accrued at the time of transfer can be applied to the CSRS retirement component. Regular FERS employees cannot apply unused sick leave to total service for retirement.