A third-party arbitrator is ordering the Department of Health and Human Services to walk back its return-to-office mandate for thousands of employees represented by one of its unions.

Arbitrator Michael J. Falvo ruled on Monday that HHS must “rescind the return-to-office directive,” and must immediately reinstate remote work and telework agreements for members of the National Treasury Employees Union.

HHS rescinded those workplace flexibility agreements early last year, after President Donald Trump ordered federal employees to return to the office full-time.

Falvo found that HHS committed an unfair labor practice by unilaterally terminating telework and remote agreements, without regard to its five-year collective bargaining agreement with NTEU. The labor contract, which covers 2023 through 2028, states the agency can only terminate telework and remote work agreements “for cause.” That includes emergency situations and cases when an employee falls short of a “fully satisfactory” performance rating.

The ruling will impact thousands of HHS employees represented by NTEU. Its members include employees at the Food and Drug Administration, the Substance Abuse and Mental Health Services Administration, the Administration for Children and Families, the Administration on Community Living, the Health Resources and Services Administration, the National Center for Health Statistics and the HHS Office of the Secretary.

Falvo is also ordering HHS to post a signed notice, “admitting that the agency violated the statute by repudiating the collective bargaining agreement.” The arbitrator wrote that his ruling does not limit NTEU from “seeking additional remedies to the extent permitted by law.”

HHS officials argued that Trump’s return-to-office presidential memorandum supersedes the collective bargaining agreement. But the 1978 Federal Services Labor-Management Relations Statute makes it an unfair labor practice for an agency “to enforce any rule or regulation … which is in conflict with any applicable collective bargaining agreement if the agreement was in effect before the rule or regulation was prescribed.”

According to Falvo, the Federal Labor Relations Authority set a precedent in previous labor disputes that a presidential memorandum “is not a governmentwide rule or regulation that the employer is obligated by law to implement immediately upon issuance.”

“These cases compel the conclusion that the agency breached the agreement and violated the statute,” he wrote.

The arbitrator decided Trump’s return-to-office memo does not override telework and remote work protections outlined in NTEU’s collective bargaining agreement. HHS did not respond to a request for comment. NTEU declined to comment.

NTEU Chapter 282, which covers FDA headquarters employees, told members in an email that HHS is likely to appeal the arbitrator’s decision and has 30 days to do so. The union’s message states, “NTEU will push the agency to accept the ruling and restore your rights without delay.”

“This is a significant win that reaffirms that telework and remote work rights negotiated in a term contract cannot be unilaterally taken away,” NTEU Chapter 282 told members.

More than a year into the second Trump administration, several recent exceptions to its return-to-office policy have emerged.

The Labor Department’s Office of Workers’ Compensation Programs recently told employees that some of its employees will be eligible for remote work, because the agency is “extremely challenged” covering rent expenses for a fully in-office workforce.

Meanwhile, a second arbitrator ruled that the Centers for Medicare and Medicaid Services “violated statutory obligations” to bargain with the American Federation of Government Employees over implementation of the administration’s return-to-office directive.

The arbitrator in this dispute determined CMS wasn’t required to negotiate with the union over the administration’s return-to-office mandate, but did have an obligation to ensure implementation complied with its collective bargaining agreement with AFGE.

The arbitrator ordered CMS to meet and negotiate with AFGE over the “effects of the implementation of the directive on work/life balance of employees.”

Trump touted his return-to-office mandate at a White House press briefing on Tuesday, where he looked back on the accomplishments of his first year in office.. Trump told reporters that when he took office last year, “we had so many of our federal workers who wouldn’t come into work.”

“We don’t want them sitting in their home, on their bed, working. We want them in an office that we’re paying for in Washington, D.C., or wherever it may be. And we’ve largely taken care of that mess,” Trump said. “I guarantee you they’re out on the ballfields. I guarantee you they’re out playing golf. And you can’t run a country or a company that way.”

Trump’s presidential memorandum directed agencies to terminate remote work and telework agreements, but also stated that the return-to-office mandate must be “implemented consistent with applicable law.”

“Reasonable persons could have different notions whether a presidential memorandum (or an executive order) is such a ‘rule or regulation’ under ‘applicable law.’ On January 20, 2025, what ‘applicable law’ required was not a matter of first impression,” Falvo wrote.

NTEU filed a grievance against HHS last February, after the agency issued a directive requiring all bargaining unit employees to report to the office on a full-time basis.

Union officials argued that HHS refused to negotiate with NTEU before the return-to-office memo took effect, and would agree to “post-implementation bargaining.”

HHS officials denied the grievance and told the union that an agency head “retains the statutory right to determine overall telework levels and to exclude positions from telework eligibility.”

Christina Ballance, the executive director of the agency’s National Labor and Employee Relations Office, told the arbitrator that HHS “was obligated to comply with the presidential memorandum.”

“Ultimately, the president is our chief, and if he directs that employees return to offices in person, the agency is required to do so,” Ballance said in her testimony.

HHS officials rejected NTEU’s claims that it terminated all telework and remote work agreements. They said the agency still allows situational and ad-hoc telework, as well as workplace flexibilities for military spouses and reasonable accommodations for employees with disabilities.

But Federal News Network first reported last month that a new HHS policy restricts employees with disabilities from using telework as an interim accommodation, while the agency processes their reasonable accommodation request.

HHS is also centralizing the processing of reasonable accommodation requests on behalf of its component agencies. As a result, it is inheriting a backlog of requests that HHS officials expect will take about six to eight months to review.

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The Pentagon doesn’t know exactly how many civilian employees telework or work remotely across the Department of Defense, according to the Government Accountability Office.

While DoD has good data on which positions are eligible for telework or remote work, it does not consistently track whether civilian employees are actually using those programs. As a result, official figures have at times overstated remote work usage by counting eligible positions instead of the number of employees approved to telework or work remotely, a new watchdog report shows.

In May 2024, for instance — a period within the December 2021 to February 2025 span reviewed in the new GAO report — the Pentagon publicly reported it had 61,549 remote employees. One month later, however, the Defense Department told GAO it had 35,558 remote workers.

“The reason that happened is because they were reporting position eligibility. They were not reporting the individual employees. That’s exactly what we found — they had good data on the positions eligible but didn’t have such good data on who was actually using those programs,” Alissa Czyz, director of defense capabilities and management at GAO, told Federal News Network.

“We found that two-thirds of the positions in 2024 were eligible for telework, but the data were not very good when you got to the individual employee level,” she added.

Czyz said her team found that most DoD civilians were already working in person even before the current return-to-office policy, and that fully remote workers made up only a tiny fraction of the workforce.

“According to our data, the vast majority of civilians — about 81% — were in person. About 1% were doing remote work. That perception that large amounts of federal employees were teleworking, at least at the Department of Defense, did not bore out in our analysis,” Czyz said. 

Since President Donald Trump terminated remote work for federal employees, about 8% of the DoD civilian workforce — roughly 62,000 employees — had not returned to in-person work. About 6%, or 45,000 workers, did not return to office after accepting offers for deferred resignation. The government used the deferred resignation program last year to reduce the size of the federal workforce. Another 2%, or about 17,000 people, did not return due to reasonable accommodations.

No formal review of telework, remote work

Office of Personnel Management guidance requires agencies to evaluate how telework and remote-work programs affect their mission, employee recruitment and retention, and operating costs. However, GAO found that the Defense Department has not evaluated the impact of those programs on the department’s broader goals.

While there were scattered efforts across the department to assess some aspects of telework and remote work, there was no comprehensive, departmentwide evaluation of both benefits and drawbacks of those programs. One data source — the Federal Employee Viewpoint Survey — previously included telework-related questions, but OPM canceled the survey this year. 

Czyz said her team was able to gather some anecdotal feedback on telework and remote work, with DoD officials citing benefits such as improved communication, recruitment advantages for hard-to-fill positions and potential cost reductions. Some disadvantages included reduced in-person collaboration and decreased morale among employees who were not eligible for telework. But ultimately officials were not able to provide concrete data demonstrating cost savings or other outcomes.

“I mean, the bottom line was they were not conducting formal evaluations of telework or remote work,” Czyz said. “There was maybe some anecdotal cost savings with reduction in office space and that sort of thing, but there had been no formal evaluation of cost savings in the department.”

DoD also hasn’t assessed whether increased in-person requirements have created new costs, but GAO is examining those potential increases as part of a separate review of the department’s use of office space. That review comes as DoD seeks to reduce its office footprint while simultaneously bringing employees back to the office. GAO expects to release that report in early spring.

The Pentagon updated its telework policy in 2024 for the first time since 2012, instructing DoD components to “actively promote” telework and remote work and to eliminate barriers to program execution through education and training. The department has since rolled back the policy.

If you would like to contact this reporter about recent changes in the federal government, please email anastasia.obis@federalnewsnetwork.com or reach out on Signal at (301) 830-2747.

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• A government watchdog found that the Defense Department has never formally evaluated telework and remote work programs against agency goals. DoD officials, however, reported “perceived” benefits and challenges. The Government Accountability Office said without formal evaluation of these programs, DoD cannot determine whether these programs help meet agency goals. While defense officials told GAO that their use of these flexibilities improved productivity, efficiency, and recruitment and retention, some officials said that telework reduced opportunities for collaboration and information sharing and decreased morale. The watchdog also found that the data on the number of teleworkers and remote workers DoD previously reported is likely inaccurate.
  (DoD never formally evaluated telework, remote work programs, watchdog finds - Government Accountability Office)
• The Defense Department is putting additional safeguards around the research it funds. The Pentagon is telling the military services and defense agencies to review fundamental research awards to ensure there is no foreign influence, intellectual property theft or any other form of exploitation that could threaten the security and economic interests of the country. A new memo from Under Secretary of Defense for Research and Engineering Emil Michael establishes additional oversight requirements to protect government funded research. Along with the reviews of awards, DoD will establish a department-wide Fundamental Research Risk Review Repository to improve information collection and sharing across all components. It also will develop automated vetting and continuous monitoring capabilities to help detect and mitigate foreign influence risks.
  (DoD mandates additional oversight for research awards - Department of Defense)
• The Labor Department recovered more than a quarter billion dollars in back wages for American workers last year. That’s the most money the department’s Wage and Hour Division has recovered in a single year since 2019. Those back wages went out to nearly 177,000 employees. On average, that's more than $1,400 per employee. The department has launched new tools aimed at helping employers stay informed of their obligations.
  (Labor Department recovers more than $259M in back wages for workers in 2025 - Labor Department)
• The Air and Space Forces are "aggressively" implementing Defense Secretary Pete Hegseth’s acquisition reforms. The services are replacing program executive offices with new organizations called portfolio acquisition executives. The Air Force has already redesignated five program executive offices as portfolio acquisition executives, including those overseeing Command, Control, Battle Management and Communications (C2BMC) and Nuclear Command, Control and Communications (NC3). Meanwhile, the Space Force has designated its first tranche of mission areas to be overseen by portfolio acquisition executives, including space access and space based sensing and targeting.
  (Air Force, Space Force replace program offices with portfolio acquisition executives - Space Force)
• Cohesity became the 22nd company to sign up for an enterprise software deal under GSA’s OneGov program. Under the agreement, GSA said agencies can buy Cohesity’s cybersecurity data protection and replication tools at a discount of more than 72% off the company's GSA schedule price. Agencies also have access to other Cohesity offerings, such as its FedShield tool bundle at discounted prices. The prices are good through September 2027. GSA’s contract with Cohesity is the third OneGov deal with a cybersecurity firm since December.
  (GSA adds third cyber firm since December to OneGov program - General Services Administration)
• Clearer numbers on the federal workforce are coming into view from the Office of Personnel Management. A new OPM website contains a far more detailed and modernized view on the federal workforce, compared with its predecessor, FedScope. The new platform also reaffirms the significant reshaping the federal workforce experienced over the last year. OPM’s numbers reveal a major drop in workforce size, a decline in federal union representation and far fewer telework hours.
  (OPM data overhaul reveals deeper federal workforce insights - Federal News Network)
• The Federal Bureau of Prisons is offering retention bonuses to correctional officers and other frontline positions, in an effort to address staffing challenges. The size of the pay incentive depends on the employee’s position and the staffing level at their facility. The retention bonuses will take effect in February, and will be reviewed annually, according to the agency. But federal union officials are urging a more permanent pay fix for the BOP, which has faced years of significant understaffing.
  (Update on BOP retention incentives - Federal Bureau of Prisons)
• The Social Security Administration is rolling out nationwide systems in the coming months that will impact how the agency triages its workload to employees. Someone applying for SSA benefits in California could soon be speaking to an employee in Maine. The agency is rolling out systems in March that will allow employees to tackle a nationwide inventory of cases. SSA employees say they’re used to processing claims submitted locally and that these changes could make their work much more complicated. The agency lost about 7,000 employees through voluntary incentives last year.
  (Social Security seeks nationwide system to manage caseload for smaller workforce - Federal News Network)

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Updated guidance on federal telework and remote work from the Office of Personnel Management now emphasizes as much in-person presence as possible for the federal workforce.

OPM’s latest revisions aim to better align with the Trump administration’s return-to-office orders from January 2025. The new guidance, which OPM updated in December, now says federal employees should generally be “working full-time, in-person.” And while federal telework and remote work can be “effective” tools on a case-by-case basis, OPM said those flexibilities “should be used sparingly.”

Beyond that, agencies should also have procedures for verifying that employees are working on-site, full-time, unless given an exemption, OPM said. And in the limited cases where employees are teleworking, agencies should have a process to determine whether teleworking is successful, or if it should be revoked.

“While individual agencies are in the best position to define what it means to ‘ensure that telework does not diminish employee performance or agency operations,’ determinations should be based on metrics and clear performance standards, along with the overarching principal that work should generally be performed in-person at an agency worksite,” OPM wrote in the December guidance document.

OPM’s new document also details when telework and remote work are “acceptable,” and the role of agencies in managing federal telework and remote work policies. When developing their policies, for instance, agencies should consider IT security, performance management and work schedules, among other factors, OPM explained.

Overall, the guidance should help agencies create “telework and remote work policies that are consistent across the federal government,” OPM said.

Nearly a year after President Donald Trump first ordered a full return to office for the federal workforce, around 90% of federal employees are now working on-site full-time, according to OPM Director Scott Kupor.

“The reality is we’re in a re-baselining period,” Kupor wrote in a Jan. 2 blog post. “After years of operating at levels of remote work and telework well beyond pre-pandemic norms, the government needs to reset expectations, tackle issues like excess office space, modernize our tools, and rebuild confidence that we can deliver consistently no matter where we work.”

The new on-site numbers from OPM come after Trump, on his first day in office, ordered all agencies to terminate remote work agreements, and return all federal employees to full-time on-site work, with a few exceptions. The current 90% in-the-office rate, according to Kupor, leaves about 10% of federal employees who have been exempted from on-site requirements and kept their telework or remote work agreements.

Agencies have granted limited exceptions for certain employees with disabilities, qualifying medical conditions or another “compelling reason” to telework, according to OPM. The new guidance additionally exempts military spouses and Foreign Service spouses working overseas from on-site work requirements. But agencies can still revoke federal telework agreements if they appear to diminish performance, or if an employee has repeated unexcused absences, OPM said.

“The president’s memorandum correctly recognizes individual circumstances matter and made clear that agencies should review these to make reasonable accommodations where appropriate,” Kupor wrote in his blog post. “But — and I realize many people may disagree with this — commuting time alone is not grounds for an accommodation.”

For locality pay purposes, OPM reaffirmed that employees with telework agreements are considered to be located at their agency worksite, as long as they are reporting in-person at least twice per two-week pay period. Employees on remote work agreements, who are not expected to report regularly on-site, are considered to be located at their alternative worksite.

The new document also defines when “situational telework” is appropriate, stating that it should only be authorized for a “compelling agency need,” and as long as it does not “diminish agency operations.” Regardless of the reason, OPM said situational telework is temporary and approved on a case-by-case basis — not part of a regular telework schedule.

Appropriate uses of situational telework include when federal facilities close due to inclement weather, or when an employee has a short-term illness or injury, or a religious observation, OPM explained.

In opposition to the Trump administration’s return-to-office push, some federal workforce experts have argued there are significant benefits of hybrid work — or a mix of in-person work and telework. Many say the availability of telework improves recruitment and retention, as well as agency outcomes. Federal employees themselves have also reported enhanced performance and productivity while operating in a hybrid work environment.

In contrast, Kupor said he believes the workplace suffers when employees aren’t in the office — and that communication and collaboration are “sub-par.”

“Strong connections are a feature of strong teams; those connections are much harder to build virtually,” Kupor wrote. “Proximity is especially important for new employees who may need more training, supervision, and mentoring.”

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