2027 Federal Pay Freeze Proposed: What Federal Employees Need to Know

Most federal civilian employees could see their pay remain unchanged in 2027 under President Trump’s latest federal pay plan, while certain federal law enforcement personnel would receive a 3.8 percent increase.

The President recently submitted an alternative pay plan to Congress calling for no across-the-board or locality pay increase for most civilian federal employees in January 2027.

The proposal continues the Administration’s position that holding federal pay at current levels is necessary for fiscal responsibility. However, for federal employees already navigating rising household expenses and significant changes across the federal workforce, another year with little or no increase in salary could have a meaningful impact.

What Is Being Proposed?

Under the alternative pay plan:

• Most civilian federal employees would receive a 0 percent general pay increase for 2027.

• Locality pay rates would also remain at 2026 levels.

• Certain federal law enforcement personnel would receive a 3.8 percent increase.

• The Office of Personnel Management will determine which law enforcement positions qualify for the higher rate.

  
  

The proposed freeze primarily affects federal pay rates. Employees may still be eligible for salary increases resulting from promotions or within-grade step increases when applicable.

Why Is an Alternative Pay Plan Necessary?

Federal pay law contains a formula for determining annual General Schedule and locality pay adjustments. Without an alternative plan from the President or congressional action, significantly larger adjustments could otherwise take effect under that formula.

The Administration estimates that the statutory formula would result in an average locality pay increase of approximately 20.6 percent, along with a 3.1 percent across-the-board increase to General Schedule base pay.

Presidents from both parties have routinely used alternative pay plans rather than allowing the full statutory formula to take effect.

Is the 2027 Pay Freeze Final?

Not yet.

Congress still has the authority to establish a different federal pay increase before the end of the year. If Congress enacts a specific pay adjustment, that decision could override the President’s alternative plan.

If Congress does not act, the President’s proposed rates are positioned to take effect. Final federal pay rates are typically formally established later in the year.

For federal employees, that means the coming months remain important.

What This Means for Federal Employees

A pay freeze does not mean the cost of living freezes with it.

Federal employees continue to face changes in health care premiums, housing, food, transportation and other household expenses. Holding salaries at current levels can therefore translate into reduced purchasing power even when an employee’s actual salary does not decrease.

The Administration has argued that the freeze can be implemented without harming the government’s ability to recruit and retain qualified employees. Federal employee organizations, however, have raised concerns about the long-term effects that stagnant compensation can have on recruitment, retention and the government’s ability to compete for skilled workers.

For NAGE members, this is an issue we will continue to follow closely as Congress considers federal spending and the government moves toward finalizing 2027 pay rates.

NAGE remains committed to keeping federal employees informed about decisions affecting their pay, benefits, working conditions and careers.

Stay informed. Stay engaged. Know what changes could affect you.