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Washington, D.C. — The National Treasury Employees Union (NTEU) warned Congress today against federal agency misuse of temporary employee status.

“While temporary employment status can be useful to an agency when properly applied, it is also a status that lends itself to abuse and can be an unfair working condition for an employee,” NTEU President Colleen M. Kelley said in testimony to the House Oversight and Government Reform Subcommittee on Federal Workforce, Postal Service and the District of Columbia.

Employees classified as temporary do not participate in the Federal Employees Retirement System (FERS) and lack the right to family and medical leave, as well as leave for military service. Although regulations are clear that agencies are prohibited from using temporary status to avoid the costs of employee benefits, to extend the probationary period or to avoid competitive hiring, NTEU is concerned that these regulations are often ignored.

As an example, Kelley highlighted a situation at the Federal Deposit Insurance Corporation (FDIC), which hired thousands of temporary employees during the 1980s to manage and liquidate the assets of failed banks and savings and loans.

“They served in continuous one-year appointments with thousands of them serving longer than five years and many renewed yearly for over fifteen years,” Kelley said. “These employees were clearly temporary only in name.”

With the passage legislation creating FERS, federal employees without retirement credit because they had years in temporary status were able to buy back credit for the years prior to 1989 by paying for the retirement deductions that were not taken. But the former temporary FDIC employees were not allowed to buy back credit for temporary service after 1989. The result is that valuable service time from January 1, 1989, until the date that they actually became eligible to participate in FERS and have deductions made was essentially lost or forfeited.

Kelley noted that the Dodd-Frank Wall Street Reform and Consumer Protection Act includes aspects dealing with federal personnel policies to ensure the front line financial regulatory employees are treated more fairly.

“This ground breaking consumer protection legislation is witness to the importance of the work of the front line employees at the FDIC and other financial regulatory agencies,” Kelley said. “I don’t think it is too much to ask that those very men and women who are working so hard as bank examiners, liquidation specialists and credit union consumer compliance specialists be given retirement credit for all of their service years in federal employment.”

NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.