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HHS rescinded those workplace flexibility agreements early last year, after President Donald Trump ordered federal employees to return to the office full-time.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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Nearly a year after President Donald Trump directed nearly all federal employees to return to the office full-time, new exceptions to the policy have emerged.

An agency within the Labor Department is allowing some of its employees to work remotely. At the Department of Health and Human Services, an arbitrator is directing one of its agencies to consult with one of its unions over more exemptions to the in-office mandate.

A recent memo from the Office of Workers’ Compensation Programs (OWCP) states that some of its employees will be eligible for remote work later this month.

OWCP Deputy Director Douglas Pennington told employees in the memo that, as the agency “vigorously implemented” Trump’s mandate for a full-time return to office last year, “we determined that OWCP will be extremely challenged to cover rent expenses.”

According to the Jan. 6 memo, the Labor Department will allow “100% remote work” for OWCP employees who perform adjudicatory work and perform payment processing work.

Pennington wrote that while most of the agency’s positions benefit from in-person collaboration, “certain OWCP positions do not engage in collaborative interactions, but benefit from focused time free of distractions, and therefore would benefit from remote work and allow a reduction in rent expenses.”

Eligible employees will be able to request full-time remote work starting Jan. 26. If employees are not approved for remote work, they must continue to show up to the office full-time. The memo states that increased telework “is not an option.”

Pennington wrote that allowing a subset of agency employees to work remotely, while having the rest of the workforce in the office full-time, is the “most cost-effective way to accomplish a reduction in rent expenses and continue performing OWCP’s mission.”

Meanwhile, a third-party arbitrator is directing the Centers for Medicare and Medicaid Services to meet with the American Federation of Government Employees to discuss exemptions to the administration’s return-to-office mandate.

The arbitrator, Timothy Buckalew, wrote in his opinion that CMS “was not required to negotiate over return to in-person work,” but found that the agency “violated statutory obligations to bargain with the union over the implementation of the work in-person directive.”

Buckalew found that Trump’s return-to-office presidential memorandum (PM) allowed remote work to continue in some limited cases, including medical need.

However, the arbitrator determined CMS has not made any exceptions to its return-to-office policy.

“For reasons not apparent in the record, agency management declined to use the discretion allowed in the PM to make exemptions to the wholesale return to work or to submit the issues of impacts to bargaining as required by law as protected in the PM,” Buckalew wrote.

HHS has recently set new restrictions on telework as a reasonable accommodation for employees with disabilities.

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

According to Buckalew, AFGE Local 192 President Anita Marcel Autrey stated that CMS “unilaterally repudiated” parts of the union’s collective bargaining agreement, and that implementation of the agency’s return-to-office policy was “inconsistent and erratic.”

Autrey told the arbitrator that CMS employees in Chicago and San Francisco have not fully returned to the office because of a lack of office space.

Meanwhile, about 60 financial management employees were granted an exemption to keep working remotely because their work was considered essential to a new budget bill.

About 90% of CMS employees had telework agreements before the second Trump administration.

Donna O’Dowd, director of the workforce compliance division of the CMS Office of Human Capital, told the arbitrator that the presidential memo was a governmentwide rule that “left the agency with no discretion but to follow such directives.”

Federal News Network has reached out to OWCP and CMS for comment.

The post One agency eases in-office work requirements, while another is ordered to consider exceptions first appeared on Federal News Network.

Terry Gerton States are facing some new requirements in determining Medicaid eligibility that go into effect at the end of December. Specifically, they have to verify recipient community engagement. Can you talk us through this change in new requirements? Where does it come from? What’s its purpose?

Rob Miller Yeah, as a result of the One Big, Beautiful Bill Act, we’re looking at implementing what we like to call community engagement for the Medicaid expansion population. So sometimes it’s commonly referred to as work requirements, but it’s really a little bit more comprehensive than that. So we’re looking at the Medicaid expansion population and essentially running them through what we like to call our five-tier verification structure at Citizen. As part of that, we are looking to essentially identify the folks that we actually need to reach out to. So you may look at different types of data sources — if we have existing records of people already working, if we have existing record of people hitting exemptions, whether that be pregnancy, a Native American, medically frail, whatever that might be — and essentially filtering down as far as we can through an automated fashion to identify the population that we actually need to reach out to that need to come back and either prove that they’re working 80 hours a month or find a job or help them do volunteer work and things like that. So this is really about trying to put some, I guess you can call it accountability on this particular population as a result of the legislation.

Terry Gerton That new requirement can be pretty challenging to validate. I mean, this is a very dispersed population. They may or may not have access to technology. They may or may not have the proof of verification. How do states respond to this kind of new federal mandate?

Rob Miller Yes, I mean, I think one of our biggest concerns and I think some of the states as well is this sort of member abrasion. And we’ve seen this in a couple of other implementations over the past let’s say 10 years or so where where these types of programs have resulted in members falling off the rosters that really shouldn’t have. So our approach is to ensure that sort of reducing member abrasions almost hopefully as much as to zero percent, if you will, is one of our core themes. So we, again, start with what can we do to automatically confirm these folks are good to stay in the program? And that is, when we’ve talked to [the Centers for Medicare and Medicaid Services (CMS)], their number one goal. So the last thing that we want to do is have to reach out to a member to actually perform this extra check,because like you said, it may be hard to get in touch with them. There may be technical concerns. There maybe a various number of reasons, and we need to make this as easy as possible. So another way to handle that, of course, is to reach to these consumers with that in mind. So there may be folks that have only cell phones. There may be folks going to the library to get to their computers. There may folks that are expecting to be able to do this over the phone, through paper as well. And so by having all of those sort of different channels available for some of them, maybe 20 years old versus some one that’s in their 60s, right? And having those different paths will hopefully make it so that we can reach those members in a clean way and ensure that the right people are staying covered at the right time.

Terry Gerton Many of these folks that are covered by Medicaid may also be receiving benefits through other programs. We’ve seen new work requirements go into place with the [Supplementary Nutrition Assistance Program (SNAP)], for example. So when we think about validating individual eligibility, are we looking across all of these different benefit programs to try to only have to validate them once, or do they have to validate themselves in every single eligibility program?

Rob Miller Yeah, I think, unfortunately, it’s going to be a state-by-state approach. I think we do see a lot of siloed states where some of their systems are in different places, which does require members, unfortunately, to have to do those different types of checks. We were just at a conference the other week and heard about a state talking about 80 different portals with 80 different logins for members, which is not a great user experience, let’s put it that way. I think one of the things that we can do from a technology perspective is help those different silos. And we did that in Mississippi, actually, where we took about 15 different state and federal data sources across different agencies and connected the Human Services [Department] and the Department of Medicaid together so that once somebody makes a request to apply for SNAP, and then maybe they also then apply for Medicaid at the same time, which happens often. Those transactions continue to funnel through us. And we’ll identify that so that one, they’re not getting double charged for those checks to the different credit bureaus and what have you for property and things like that. But more importantly, that data can come back to the state immediately as well if it’s available. So there’s technology solutions, if you will, to help bridge that gap. But that is certainly gonna be something that we might expect. Now, one other thing I think is important on your question specifically around SNAP is that we’ve already received, as part of that sort of five tier filter, if you will, that we’re going to try to go through when we get the Medicaid expansion population is if you’re on SNAP or [Temporary Assistance for Needy Families (TANF)], there’s already additional checks being done on those other programs that will already put you basically into good compliance for this program. So that is actually one of the automated checks we’re going to have. If somebody’s already on one of those other programs, but particularly SNAP and TANF, that’s an all-ready elimination for you for us to have to reach out. We’re already going to basically check off to say that you’re good to stay on the program without us doing any additional verifications.

Terry Gerton I’m speaking with Rob Miller. He’s general manager and senior vice president at CITIZ3N. We mentioned the Medicaid requirements up front. Really states are only getting months to not only receive these new mandates, but have them implemented, which is like lightning speed in terms of tech innovation, and every single state has to do it themselves. What are you seeing in terms of state compliance: Are they ready? Are they not? Are some states ahead of this game?

Rob Miller That’s a great question. I think everybody’s still waiting, to be honest with you, with the formal guidance from CMS. And there’s been some things that have come out already as well. I think one of the things that we talk about is not starting from home base, if you will. We’re starting from third base. And then at Softheon, we had done a lot of this work in Kentucky back in 2018 when they were looking to implement work requirements. So we had a pretty decent idea of what we might expect to see from a state, as well as the potential flexibility that we might see different states try to implement as well. And so I think a couple things we’re going to see. One, we’re not going to see likely a lot of RFPs coming out, requests for proposal, because of the timeline. It may take three or four months just to get all the approvals in place just to publish something, a couple months before you get responses, a couple of months after that before you’re able to evaluate that. And right then we’re already looking at we’re like in September of next year, and that’s going to be too late. We’re looking at probably having to have systems in place by June, certainly notifications and communications going out to members definitely by September, if not sooner than that as well. Because if we’re looking for members to comply with this in January 2027, they need to be notified, again, back to our chat a little bit earlier about this, they need to notified much sooner. So we do think states are probably a little bit behind just because of the timing and the lack of maybe full clarity on what’s expected from a detailed policy perspective. So what we’re seeing is we’re seeing a lot of states look towards their existing vendors. And so our strategy on the citizen side, we have a bunch of existing customers, but we’re also talking to the bigger system integrators as well to help them because they also tend to be slower to respond as well, as a bigger organization. I think the one biggest concern I think we have in general with that is that we don’t want them to use that as an opportunity to make another buck. And one of our biggest missions at CITIZ3N and Softheon is to make health care affordable, accessible and plentiful, and we really do believe that. In fact, we spoke about one of the previous conferences, about being able to split the cost of the implementation. That’s not something I think some of the bigger guys would talk about doing. They’ll use an opportunity to charge the same amount in each different state as they see it, customize it to crazy when maybe CMS comes out and makes a policy change, that’ll be a change order. That’s just not exactly how we operate. And so we want to make it easy and something where they can define their budget ahead of time and not worry about having all these extra costs as we work towards the implementation date.

Terry Gerton You mentioned that you and CITIZ3N have worked through these kinds of programmatic changes in the past. What have you found with the beneficiary population? Do they understand the new requirements? Are they going to be prepared to meet them? And what happens to their coverage if they’re not?

Rob Miller Yeah, I mean, unfortunately, if they don’t hit it, they’re going to lose coverage. And that’s certainly the last thing, back to our mission, the last thing that we want. And so we want to make sure that the communications are clear, they’re easy to receive. But we can go through any channel, whether it be a text message, a letter in the mail, an email, a push from a mobile app or whatever it might be. All of those different potential channels to get to those members. I think there’s going to be a lot of educating that’s going to need to happen as part of this because it’s going to be new for some folks, and I can’t imagine everybody sitting there watching and reading through the One Big Beautiful Bill Act. So we’re going to need make sure that folks are communicated to properly, which is why that timeline is even more crunched, as we talked about, than it is because we don’t want to send that letter to them in December, expecting them the month after to just be ready for it. So that communication is going to really be key.

Terry Gerton And are states adequately funded to do both the modernization and the outreach that’s going to be required to bring folks across the spectrum into compliance with these new requirements?

Rob Miller Well, I think there’s definitely going to be some federal funding available to them in the typical 90-10 rules, but it is going to be a challenge. And I think we’ve already talked to a few states on the CITIZ3N side where they’ve reached out to their existing vendors and again they’re seeing major dollar signs just to analyze the requirements and so that’s something where we come in hopefully and could be a little bit more nimble and agile than than they can and and help these states out because again our mission here is to is to help sustain the program and ensure nobody gets dropped off the rails, not to make a quick buck off of some impending legislation, if you will.

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