Draft Legislation Would Revamp How VA Employees Are Hired, Fired and Paid

Draft Senate legislation circulating would significantly revamp how the Veterans Affairs Department pays and fires some senior executives, as well as toughen the disciplinary process for all employees. VA senior executives in health care leadership would be subject to a new personnel system under Title 38, with new rules on hiring, setting pay, and disciplining those accused of poor performance or misconduct, as part of an overall veterans’ omnibus package that a Senate committee plans to unveil soon.

Government Executive obtained a draft version of the package’s workforce accountability provisions and other changes to personnel management -- which alone are 68 pages. It is similar to proposed legislation that VA Secretary Bob McDonald submitted in March to lawmakers.

VA health care executives, including senior medical directors within the Veterans Health Administration and directors of the Veterans Integrated Service Network, could earn more money, but also could be fired more easily, according to the draft. They could receive compensation, determined by the VA secretary, up to the president’s annual salary (currently $400,000), and would be subject to a new performance management system for determining bonuses and job ratings. The secretary would review the minimum and maximum market rates for basic pay for senior health care executives at least once every two years.

Senior health care executives under the proposed new system also would be unable to appeal any pay cut they received as a result of “an involuntary reassignment in connection with a disciplinary action.” Currently those under Title 38, including physicians and dentists, can appeal such a decision.

Affected senior executives also would lose their current Title 5 rights to appeal disciplinary actions against them, such as removal, to the independent Merit Systems Protection Board. Instead, their appeals would be handled internally at the VA, and the secretary would have the final say over the type of punishment meted out, including firing, suspension and demotion. The entire grievance process would be limited to 21 days, and employees subject to the most serious penalties could appeal the internal board’s decision to outside judicial review.

There are roughly 350 senior executives at the VA, most of whom would remain under Title 5, and would not be directly affected by most of the proposed changes in the draft legislation. But if it’s enacted, it could set a precedent, and possibly fragment what is supposed to be a standard, governmentwide system for the Senior Executive Service. The 2014 Veterans’ Access, Choice, and Accountability Act reduced the disciplinary notification and appeals process for Title 5 senior executives at the VA.

The accountability provisions in the draft bill aim to give the secretary more authority to recruit and retain talented health care professionals to the department -- and, if necessary, discipline those executives more quickly. McDonald, in a March 23 letter to Vice President Joseph Biden and House Speaker Paul Ryan, R-Wis., said he needs greater flexibility to hire and fire “to ensure that VA can operate as a values-based high performance organization rather than a compliance-focused underperforming bureaucracy.”

The Senate draft also seeks to expedite firing for all department employees by reducing the amount of time an employee has to respond to proposed disciplinary actions. Right now, agencies have to give employees at least 30 days’ notice of a punishment, such as removal or suspension. An employee has a “reasonable” amount of time and not less than 7 days to respond and defend themselves. The draft would change the notification period to at least 10 days, and employees would have “a reasonable opportunity, but not more than 10 business days” to respond to the charges.

Any reprimands or admonishments also would become part of an employee’s permanent personnel file, unless or until, the secretary decides to remove them, according to the draft.

Also under the bill, supervisors would be required to determine at the end of an employee’s probationary period – typically one year– whether that employee demonstrated success and “should continue past the probationary period.” Supervisors’ annual performance plans would take into account how well they addressed poor performance and misconduct among employees, and make them accountable for morale and engagement.

The American Federation of Government Employees urged senators in an April 18 letter to oppose the omnibus legislation “in its current form” because of the employee accountability provisions, calling it “a frontal assault” on federal employees’ due process rights. “The weakening of these critical rights will have a hugely disproportionate impact on the DVA’s diverse workforce: Over 30 percent of all DVA employees are veterans and over 40 percent are minorities,” wrote AFGE President J. David Cox, Sr. “Women comprise nearly 60 percent of the DVA workforce.”

Cox also warned that if the bill advances and “succeeds in gutting civil rights and civil service protections for the DVA workforce, it is clear that this approach will be taken governmentwide.”

Jason Briefel, interim president of the Senior Executives Association, said that while there is some “useful policy” in the draft bill, the group also has serious concerns about the constitutionality of many of the proposed changes and potential adverse effects on due process. “We think it not only has implications for the VA, but for the government, and ultimately are concerned about further politicizing the agency and its workforce, in large part because we feel that politicizing the VA will be detrimental to veterans,” Briefel said.

It’s not clear when the Senate Veterans’ Affairs Committee will unveil the omnibus package, which included the hefty section on employee accountability, but it could be this week. Chairman Johnny Isakson, R-Ga., has said he wants to get legislation to President Obama before Memorial Day at the end of May. The majority and minority sides of the committee didn’t comment Wednesday on the draft version of the employee accountability provisions, or say when they would roll out the package.

The House Veterans’ Affairs Committee was not involved in the crafting of the veterans-related omnibus, or negotiations over it, according to an aide. The House staffer said that committee has “spoken loudly and clearly” about its priorities “in the form of 21 veterans-related bills that have passed the House this Congress and are now gathering dust in the Senate.”

Some of the measures that House Veterans’ Affairs Committee Chairman Jeff Miller, R-Fla., has shepherded through that chamber are included in the Senate’s draft employee accountability provisions, including clawing back bonuses from bad apples, and reducing the pension benefits of wrongdoers.

Miller, and former Republican presidential candidate and Florida Sen. Marco Rubio, expressed concern in March that the final bill from the Senate Veterans’ Affairs Committee would lack strong accountability provisions.

“We hope you realize that any piece of comprehensive veterans’ legislation that doesn’t provide the VA secretary swift and comprehensive disciplinary authority for all VA employees misses the true mark on what ails the department,” the two wrote in a March 31 letter to Isakson. “Not including such strong accountability language would be a disservice to both taxpayers and our nation’s veterans.”

Miller and Rubio said they believed the Senate panel “may be taking an approach that favors reaching a deal with the [Obama] administration or others at any cost, regardless of whether it actually addresses the VA’s many problems or pays for new programs in a responsible way.” 

Other accountability provisions in the Senate draft legislation would:

• Reduce the retirement benefits of senior executives who are convicted of certain crimes.
• Create a new Office of Accountability and Whistleblower Protection with an assistant secretary overseeing it.
• Incorporate the protection of whistleblowers into supervisors’ performance evaluations.
• Require the VA to train all department employees at least once every two years on whistleblower disclosure processes, rights, and retaliation prevention.
• Require annual performance plans for the department’s political appointees that make those officials accountable for recruiting and retaining employees, training and engaging the workforce, and getting rid of poor performers.
• Direct the VA to collect data and report on how well it’s managing its workforce, including metrics ranging from employee morale to promotions and retirements within the workforce.
• Prohibit bonuses to any employee – senior executive or otherwise – who has a disciplinary action pending against them.
• Allow the secretary to recoup bonuses paid to an employee during any year in which the employee is punished, unless the adverse action was “found to be made in error.”
• Limit to 14 business days within a calendar year the amount of time that an employee can remain on paid administrative leave.