Federal Remote Work Policy in 2025
November 26, 2024
The Federal government's remote work policy is receiving heightened attention ahead of President-elect Donald Trump taking office in 2025.
Why it matters: In the Washington, D.C. market, reduced in-office presence for federal workers has been cited as a key driver of distress in the office sector and other CRE properties.
The big picture: Beyond the real estate implications, the negative perception of remote work policies has become a flashpoint for some politicians. Washington, D.C.’s Democratic Mayor Muriel Bowser has been an ardent supporter of increasing physical office presence.
- And, Republicans on Capitol Hill have passed legislation in the House to compel workers to return to the office.
- H.R. 139 - SHOW Up Act of 2023 passed the House in February 2023 by a 221-206 largely party-line vote. The bill has not been taken up by the Senate.
- The bill requires each executive agency to reinstate the telework policies that were in place on Dec. 31, 2019. Agencies may not carry out expanded telework policies unless the Office of Personnel Management certifies that such policies, among other requirements, will have a positive effect on an agency's mission and operational costs.
By the numbers: The Biden administration also has been working to pressure cabinet departments and their employees to increase in-office presence.
A few highlights from the report include:
- Telework Eligibility and Implementation: Some 50% of federal employees are ineligible for telework due to the nature of their roles, such as healthcare provisions and resource management. Among those eligible, about 60% of work was conducted on-site as of May 2024, aligning with broader economic trends.
- Underutilization of Federal Office Space: The Government Accountability Office (GAO) found that 17 out of 24 federal agencies used an estimated average of 25% or less of their headquarters' capacity during selected weeks in early 2023. Federal agencies spend about $2 billion annually to operate and maintain office space, regardless of occupancy.
- In-Person Presence Objectives: The report indicates that while progress has been made in increasing in-office presence, some agencies are still working toward meeting their in-person objectives. OMB emphasizes ongoing collaboration with agencies and Congress to achieve these goals.
- Real Property Management: Agencies are encouraged to assess their real property needs based on evolving work patterns, including telework adoption. This assessment aims to optimize space use and reduce costs, potentially impacting demand for commercial office space.
- Policy Guidance: OMB has issued guidance to help agencies make informed decisions about their workplace postures, advocating for a substantial increase in meaningful in-person work, particularly at headquarters, while considering each agency's unique mission and operations.
The bottom line: The Trump administration likely will continue efforts to bring federal workers back to the office. However, if the overall goal is a reduction in the federal workforce or the federal office space footprint, the impact on CRE could be more complex.
Contact David McCarthy (dmccarthy@crefc.org) with questions.