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.”

Under the Federal Employees Pay Comparability Act (FEPCA), President Trump is required to submit an "alternative pay plan" letter to Congress by August 31 if he intends to override automatic, formulaic pay raises (which default to base and locality adjustments) for 2027. The August alternative pay plan acts as the definitive mechanism used to set federal civilian salaries, often averting much larger default increases dictated by the FEPCA formula. Had the formula been utilized, 2027 GS pay would increase by an estimated 3.1 percent for base pay increase, plus an average locality pay increase of nearly 21 percent. According to the most recent numbers released by the Federal Salary Council, federal employees earn nearly 25 percent less than their private sector counterparts.

While the pay freeze included in President Trump’s alternative pay plan is discouraging, it is not yet final. Congress could theoretically legislate a pay raise for General Schedule (GS) employees. FMA has endorsed the effort in Congress to provide a reasonable 4.1 percent pay raise with the Federal Adjustment of Income Rates (FAIR) Act (H.R. 7480 / S. 3826), proposed by Rep. James Walkinshaw (D-VA) and Sen. Brian Schatz (D-HI).

However, Congress appears likely to follow the lead of the administration and has not included any language supporting a raise in current versions of the Financial Services funding bill, typically where a pay raise or pay freeze would be included. The House Appropriations Committee rejected an amendment to include a 3.6 percent pay raise offered by Rep. Steny Hoyer (D-MD) by a party-line vote, with 28 Democrats supporting and 32 Republicans in opposition.

"The federal government must always strive to be a model employer,” Lentjes wrote. “The American public deserves a federal workforce that receives the resources it needs to provide the services our citizens count on. A pay freeze will only deflate federal employees’ morale, erode employee retention and recruitment, and lead to a lower quality of services from the federal government.”