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."

In September, FMA signed a joint letter with fifteen fellow organizations from the Federal-Postal Coalition to all members of Congress in staunch opposition to the proposed pay freeze.

“Federal employees have continued to show up and serve through multiple government shutdowns, staffing shortages, workforce disruptions, and repeated attacks on the civil service,” the letter reads. “At the same time, the vast majority of them have received only a 2 percent pay increase in 2025 and a 1 percent increase in 2026. Now, they are being asked to go another year without a meaningful pay increase while the cost of housing, food, health care, transportation, and other basic needs continue to rise. For many federal employees, two years of nominal pay increases and a pay freeze are effectively a pay cut.” To read the full Fed-Postal Coalition letter, click here.

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, 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 still 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. Current versions of the Financial Services funding bill, typically where a pay raise or pay freeze would be included, contain no language supporting a raise. The House Appropriations Committee rejected an amendment to include a 3.1 percent pay raise offered by Rep. Steny Hoyer (D-MD) by a party-line vote, with 28 Democrats supporting and 32 Republicans in opposition.

Supporters of a raise are now pressing leadership directly. On September 15, Rep. Walkinshaw, Rep. Hoyer, Sen. Chris Van Hollen (D-MD) and Sen. Schatz led a letter to House and Senate leaders urging Congress to act on federal pay for 2027. 110 House and Senate legislators signed it. The letter warned that a freeze would hurt recruitment and retention. It also turned the administration's own rationale around. The President justified the 3.8 percent raise for federal law enforcement as necessary to recruit and retain talent, and the lawmakers argued that the same reasoning applies to the entire federal workforce.

Federal Workforce Caucus leaders, joined by federal union officials, followed the letter with a news conference, as reported by Drew Friedman of Federal News Network on September 23. They called for the FAIR Act's 4.1 percent raise to take effect in January. They also said that, at a minimum, all civilian employees should receive the same 3.8 percent raise the President has proposed for law enforcement. Lawmakers identified the year-end government funding package as the most realistic vehicle, likely as a policy rider. Walkinshaw said he will push for its inclusion when Congress returns for its lame duck session after the midterm elections. He cautioned that the effort "is going to be a fight," with no guaranteed outcome.

As noted elsewhere in this edition of the Washington Report, time is short. The continuing resolution funding the government after the October 1 start of the fiscal year runs only through December 11, leaving lawmakers a few weeks after the November 3 midterm elections to negotiate. Congress last overrode a presidential pay freeze during the 2018-2019 shutdown. The deal that ended it included a 1.9 percent raise for civilian employees, made retroactive to January. A raise agreed to after the new year could therefore still be retroactive.

"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."