This report provides an update on issues affecting federal managers. As always, I encourage you to visit www.fedmanagers.org on a regular basis for more information on these and other matters.

Also, be sure to look for the monthly FMA Grassroots Update where we offer links to action letters and FMA-PAC matters we do not address in the Washington Report. The grassroots newsletter is sent exclusively to non-governmental email addresses to avoid any Hatch Act violations. If you are not receiving it, contact the national office to provide your non-governmental email address.

Please feel free to provide feedback any time by emailing Greg Stanford at gstanford@fedmanagers.org, or by calling the National Office at (703) 683-8700. Thank you for your membership in FMA. It’s an honor to represent your interests before Congress and the administration.

On August 26, 2026, President Donald Trump formalized an alternative compensation plan calling for a pay freeze for most civilian federal employees for 2027. The alternative compensation plan also prevents locality pay increases for feds in the upcoming year. Federal employees received a 1 percent raise in 2026.

FMA National President Linda Lentjes expressed disappointment in the decision, noting the raise federal law enforcement and the uniformed military are slated to receive.

“To be clear, we fully support the raise for the military and the 3.8 percent raise for federal law enforcement, but strongly argue federal employees deserve parity,” Lentjes said. "Federal managers swear the same oath to the Constitution and dutifully spend every day maintaining and operating the military enterprise that protects our national security, processing tax returns and Social Security payments, caring for our veterans, protecting our environment and food supply, and countless other services on behalf of all Americans. They deserve to be recognized and compensated fairly.”

President Donald Trump signed a continuing resolution (CR) into law on September 2, a measure that will fund the federal government at Fiscal Year 2026 levels through December 11. The House of Representatives approved the bill the day before by a vote of 370-48 and the Senate passed it by a vote of 90-6 prior to its August recess.

The passage and signing of the CR will preemptively avert a government shutdown at least through November’s midterm elections and into mid-December. Fiscal Year 2027 begins on October 1.

None of the twelve traditional full-year appropriations bills have been signed into law. This stopgap ensures federal agencies and departments will remain funded and gives lawmakers running for the 120th Congress an opportunity to stay in their states and districts to campaign.

Among the unfinished business Congress needs to address is completion of the Fiscal Year 2027 National Defense Authorization Act (NDAA). While the House passed its version in July by a vote of 216-212, the Senate must pass its version before the two bills can then be reconciled.

“Our national security depends on a ready, capable, and well-equipped fighting force backed by a robust and innovative defense industrial base. The FY27 NDAA delivers that,” House Armed Services Committee Chairman Mike Rogers (R-AL) said in a statement. "Peace Through Strength begins long before the battlefield – it is forged in America’s factories, depots, and shipyards. After years of underinvestment, the FY27 NDAA revitalizes America’s defense industrial base and gives our military the capacity to deter our adversaries and carry out President Trump’s Peace Through Strength Agenda."

Two Virginia representatives introduced legislation late last month aimed at limiting how federal agencies can use nondisclosure agreements (NDAs) with government workers. The bill, the Federal Worker Protection Act (H.R. 10198), is a direct response to a rule proposed earlier this year by the Office of Personnel Management (OPM).

The bill, introduced by Reps. Eugene Vindman (D-VA) and Suhas Subramanyam (D-VA), and referred to the House Committee on Oversight and Government Reform, would limit the use of nondisclosure agreements that restrict whistleblowing by federal employees and contractors.

The Office of Personnel Management (OPM) has moved to overhaul how federal employee performance is evaluated, and agencies have been told the changes apply to the Fiscal Year 2026 appraisal cycle that closes at the end of this month. The result is a compressed timeline in which agencies are being asked to implement significant changes to long-standing rating practices for a cycle that was already well underway.

On July 7, 2026, OPM published a final rule covering non-Senior Executive Service (SES) employees, including General Schedule (GS), prevailing rate, senior-level, and scientific or professional employees. The rule followed a proposed version OPM issued in February 2026 and finalized in August.

It builds on earlier 2025 guidance from the Trump administration directing agencies to limit top performance ratings and move more quickly on poor-performer discipline.

The Merit Systems Protection Board (MSPB) has finalized a rule that fundamentally changes how it reviews penalties in federal employee misconduct cases, eliminating the requirement that administrative judges walk through the 12-factor "Douglas factors" test that has governed adverse action appeals for 45 years. The final rule, published on September 3, takes effect October 5, 2026.

Under the new regulation, MSPB will no longer be required to consider each of the 12 factors set out in the 1981 case Douglas v. Veterans Administration every time it reviews a misconduct-based adverse action. Instead, the Board will ask a broader question: whether the agency's chosen penalty falls within the "tolerable limits of reasonableness" given the totality of the circumstances in the record.

The American Federation of Government Employees (AFGE) and three other unions are asking a California federal court to strike down two Office of Personnel Management (OPM) regulations that expand the agency's power to fire federal workers and reshape how their performance is evaluated.

In August, four unions — AFGE, along with the American Federation of State, County and Municipal Employees (AFSCME), the National Federation of Federal Employees (NFFE), and the International Federation of Professional and Technical Engineers (IFPTE) — filed suit against OPM in the U.S. District Court for the Northern District of California. The complaint challenges two final rules OPM issued in 2026 and asks the court to vacate them under the Administrative Procedure Act (APA), arguing the rules are arbitrary, capricious, contrary to law, and exceed the authority Congress delegated to OPM under the Civil Service Reform Act of 1978 (CSRA).