Trump's New Rule Expands Grounds To Fire Federal Workers Over Late Tax Filing and NDA Violations

The Trump administration has finalised new federal employment rules that expands the reasons civil servants can be removed from government service, extending 'suitability' standards beyond job applicants to cover current employees.

Under the Office of Personnel Management's (OPM) final rule, agencies can now consider issues including failure to meet financial or legal obligations such as timely tax filing, misuse of government resources, and compliance with nondisclosure obligations when determining whether a federal worker remains suitable for public service.

The regulation takes effect on 30 July.

The rule follows President Donald Trump's March 2025 memorandum directing OPM to strengthen standards governing the federal workforce. OPM first proposed the changes in June 2025, arguing that agencies previously had stronger authority to screen unsuitable applicants than to address serious misconduct after employees had already entered government service.

The final regulation forms part of the administration's wider effort to increase accountability across the civil service.

New Grounds for Removing Federal Employees

Before the change, suitability reviews primarily applied during hiring, while most existing employees were disciplined under separate civil service procedures. The final rule closes that distinction by allowing suitability actions to be taken against current employees for serious post-appointment misconduct as well.

OPM has also expanded and updated the factors agencies must consider when assessing whether someone remains suitable for federal employment.

In addition to existing grounds such as misconduct in employment, criminal conduct, deception or fraud during appointment, dishonest conduct, alcohol abuse without rehabilitation, illegal use of narcotics or controlled substances, violent conduct, and attempts to overthrow the US government by force, the rule introduces several new or revised standards.

These include failure to comply with financial or generally applicable civil legal obligations, such as timely filing tax returns, misuse or negligent loss of government resources, refusal to comply with applicable nondisclosure obligations, and statutory or legal barriers to employment, including citizenship or nationality requirements where required for a position. The number of suitability factors has increased from nine to ten.

OPM Director Scott Kupor said the government had long faced an inconsistency in how it handled employee misconduct.

'For too long, the federal government has had stronger tools to prevent someone with serious misconduct from entering public service than to address the same misconduct once that individual is already employed,' Kupor said. He added that the rule 'closes that gap' while helping agencies maintain public trust in the federal workforce.

The agency has stressed that the regulation does not mean employees will automatically lose their jobs for isolated issues such as filing taxes late. Suitability determinations will continue to consider the seriousness of the conduct and surrounding circumstances on a case-by-case basis rather than relying on a single factor alone.

Critics Warn the Rule Could Expand Executive Control

Supporters say the new framework modernises an outdated personnel system, but critics argue it significantly expands the executive branch's authority over career civil servants.

The regulation gives OPM the final say on suitability determinations involving current employees. Agencies will conduct initial reviews before referring cases to OPM, which can direct an agency to remove an employee if it determines that they are no longer suitable for federal service.

Kevin Owen, a partner at Gilbert Employment Law, described the changes as 'a significant overreach,' arguing they could discourage whistleblowers, particularly when combined with the administration's separate proposal requiring broad nondisclosure agreements for federal employees.

Critics Say It Could Allow Politically Motivated Dismissals

Public comments submitted during the rulemaking process also raised concerns that the changes could weaken due process protections and increase the risk of politically motivated dismissals.

A coalition led by Democracy Forward and Protect Democracy argued existing disciplinary procedures under Chapter 75 of the US Code already provide agencies with sufficient authority to deal with employee misconduct and warned the new framework could undermine the merit-based civil service.

OPM rejected those objections, saying the previous system left an 'irrational gap' between screening applicants and addressing serious misconduct by serving employees. The agency said procedural safeguards remain intact, including notice of proposed action, an opportunity to respond, and the right to representation. It also said agencies retain responsibility for making initial assessments, while OPM will ensure suitability standards are applied consistently across government.