The award, issued August 19, 2026, does not mean restoration or reimbursement has already occurred. USDA may challenge the decision through the Federal Labor Relations Authority, creating uncertainty over when employees will see any practical changes.

What the award covers

The dispute involves employees covered by the 2019-2023 USDA Rural Development–AFSCME Local 3870 collective bargaining agreement, which is the agreement governing the dispute rather than a newly negotiated contract. Federal News Network reported that 46 of the 135 employees had remote work identified as a condition of employment.

The arbitrator ordered USDA to restore telework and remote-work arrangements that were in effect on April 22 and April 28, 2025, depending on the employee or work arrangement at issue. The award also directs the agency to negotiate with the union before making changes to telework or return-to-office provisions.

The decision turned on the agreement’s telework language. The contract says USDA employees are presumed eligible for telework, lists specific reasons a position or employee may be ineligible, and sets procedures for modifying, suspending or ending an approved arrangement. It also generally requires advance written notice when management changes a telework agreement.

Why the arbitrator ruled against USDA

The award found that USDA engaged in bad-faith bargaining, implemented a rule that conflicted with the existing agreement and effectively repudiated the contract. Those are the arbitrator’s findings in this labor dispute, not a court ruling or an FLRA decision.

The result shows why federal return-to-office disputes can turn on detailed contract language. Other federal employees may have different rights depending on their agency, bargaining unit and agreement. This award does not automatically change telework arrangements across the federal government.

Possible reimbursement for commuting costs

The remedy includes potential make-whole relief under the Back Pay Act and Travel Expense Act for qualifying transportation and related costs incurred over roughly the previous 18 months.

That relief is not automatic for every affected employee. Eligibility may depend on the collective bargaining agreement, the employee’s individual circumstances and whether the expense qualifies under the award and applicable law. Employees seeking relief may need receipts or other documentation if USDA begins an implementation process.

Employees should preserve records of potentially eligible costs and follow any instructions issued by USDA or AFSCME. The award does not guarantee reimbursement to every employee or establish that every commuting expense will qualify.

Why implementation may be delayed

Under the federal labor-relations process, an agency generally has 30 days after service of an arbitration award to file exceptions with the FLRA. A challenge could delay implementation while the agency seeks review. Further proceedings, including possible court action, could follow depending on the outcome.

FEDweek reported August 28 that agencies have been appealing similar arbitration decisions, leaving some return-to-office policies in place while disputes move through review or settlement. That broader pattern provides context, but the USDA dispute depends on its own agreement and facts.

What to watch next

The next important developments are any USDA filing with the FLRA, an agency implementation notice, negotiations with AFSCME over future telework rules and any later court proceedings.

For the 135 employees, the immediate question is whether the arrangements in place in April 2025 will be restored while the dispute continues. For other federal workers, the practical lesson is narrower: telework rights may depend on the exact language of their own contracts and the procedures their agencies must follow before changing them.

Sources

• Federal News Network: USDA arbitration award and affected employees
• USDA–AFSCME Local 3870 collective bargaining agreement
• FEDweek: agencies appeal offsite-work rulings

Assembly Bill 1729 remains active legislation in committee. It would take effect only if it clears the Legislature and is signed by Gov. Gavin Newsom. Until then, the state’s current four-in-person-days default and case-by-case exception process remain in place.

Four in-person days remain the current default

Newsom’s return-to-office policy took effect July 1, 2026. For departments that offer telework, the statewide default minimum is four in-person days per work week, up from two days under the prior arrangement.

California Department of Human Resources guidance says departments must consider requests for more than one telework day per week individually. Decisions must account for operational needs, applicable labor agreements and governing law, including disability-accommodation requirements.

The guidance also allows exceptions for some positions whose duties require work at an alternate location, including examples such as telehealth, investigative and inspection work. Employees who live at least 50 miles from their designated headquarters or duty station and had a qualifying telework agreement before March 3, 2025, may also be allowed to continue that arrangement if the department determines it meets operational needs.

Field work, off-site meetings and work-related travel can count as in-person days under the guidance. The scheduled AB 1729 hearing does not suspend or replace any of those rules.

What AB 1729 would require

The bill would require each state agency to develop and implement a telework plan in work areas where telework is identified as practical and beneficial to the organization.

When an agency’s unique operational needs and programmatic mission require employees to report to a workplace, the agency would have to provide a detailed written justification to the Department of General Services and to the agency’s employees. That requirement would create a more formal record of attendance decisions, while leaving agencies to assess their own missions and operational needs.

AB 1729 would also direct the Department of General Services to establish a telework dashboard. The bill says the dashboard would display reported benefits including reduced office-space and operating costs, emissions, energy use and vehicle miles traveled.

Each agency would evaluate its telework program every 10 years under the proposal. The bill says those reviews would be intended to align telework with agency missions and support recruitment and retention of qualified workers.

The savings figures are estimates, not realized results

AB 1729 cites a Department of General Services estimate that telework schedules could reduce state-owned and leased office space by approximately 30%. It also cites a California State Auditor estimate of annual savings of as much as $225 million.

Those figures are estimates included in the bill to support the proposal. They are not savings already produced by AB 1729, and the bill would not automatically produce either result.

The proposed dashboard would give the state a way to track future effects on facilities and operations. For residents and taxpayers, the accountability question would be whether any reduction in office-space or operating costs is documented alongside the effects on service delivery and agency operations.

Why the dispute matters beyond state offices

The policy directly affects state employees and can also affect commuting, parking, childcare arrangements and office capacity. CapRadio reported that workers raised concerns about traffic, childcare and whether departments had enough seating for a large-scale return to the office. Those are reported worker concerns, not established findings about the policy’s statewide effects.

CalMatters reported that roughly 108,000 of California’s more than 245,900 state employees are affected by the four-day mandate. Employees in jobs that generally require a fixed work location, including many prison, firefighting, law-enforcement and custodial positions, are generally not covered in the same way.

The broader debate also involves recruitment and retention, service delivery and the state’s use of government-owned and leased space. Newsom’s administration has argued that more in-person work can support collaboration and productivity, while opponents have questioned whether a broad default sufficiently accounts for different job duties, workplace capacity and employee costs.

What happens next

AB 1729 passed the Assembly on May 27, 2026, by a 67-7 vote. It was read for the first time in the Senate on May 28, referred to Senate committees in June, and on June 23 was ordered to be re-referred to Senate Appropriations after a committee vote. The Senate Appropriations hearing is scheduled for August 3, 2026.

A scheduled hearing does not guarantee a vote, passage or advancement. If the bill moves forward, it would still need to complete the Senate process. If the Senate changes it, the Assembly would have to consider concurrence or otherwise resolve the differences. The measure would then require the governor’s signature to become law.

AB 1729 contains an urgency clause stating that it would take effect immediately if enacted. That clause has no effect while the bill remains pending.

For now, state employees remain subject to the current four-in-person-days default where applicable, along with the existing case-by-case exception process. The next date to watch is August 3, when Senate Appropriations is scheduled to consider whether the telework bill should move forward.

Sources

• California Legislature — AB 1729 bill text
• California Department of Human Resources — statewide telework guidance
• CapRadio — California state workers protest as mandate takes effect
• CalMatters — Newsom’s return-to-office mandate