Sponsors (17)
The bill provides meaningful 2026 pay increases that boost federal employee compensation and ease payroll administration, at the cost of higher near-term personnel spending that may pressure agency budgets, taxpayer costs, and local pay alignment.
Federal civilian employees (including locality-covered workers) receive a combined pay increase for 2026 — a 3.3% across-the-board raise plus a 1% locality adjustment — increasing take-home pay and helping retention and recruitment.
Wage-grade (prevailing rate) employees get a predictable 3.3% pay bump for FY2026 without waiting for a new local wage survey, simplifying and speeding payroll adjustments for those workers.
Applying consistent adjustments across multiple pay statutes reduces pay disparities and administrative complexity for agencies, easing implementation and payroll management.
Taxpayers bear higher federal personnel costs from the 3.3% base increase and 1% locality raise in 2026, increasing near-term government spending.
Waiving the FY2026 prevailing-rate wage surveys risks misaligning wage‑grade pay with current local private-sector wages, which could lead to under- or overcompensation and local retention or morale issues.
The temporary pay adjustments and increased payroll costs may complicate long-term budget planning and could crowd out other agency priorities or require offsets in future budgets.
Based on analysis of 3 sections of legislative text.
Introduced January 16, 2025 by Brian Emanuel Schatz · Last progress January 16, 2025
Increases federal civilian pay for 2026 by raising statutory pay rates by 3.3% and raising locality pay rates by 1% for that calendar year. It also increases basic pay for prevailing rate (wage‑grade) employees by 3.3% for fiscal year 2026 and waives the statutory wage survey requirement for that year to allow using existing rates. The changes apply to employees paid under the statutory pay systems and to wage‑grade employees whose pay is set by prevailing rate schedules; agencies will implement the adjustments for payroll and related benefit calculations for the specified year.