How is the federal pay raise for 2026 determined and who sets it?
Executive summary
The 2026 federal civilian base pay adjustment was set by the White House alternative pay plan: President Trump authorized a 1.0% across‑the‑board base pay increase effective the first pay period on or after January 1, 2026, while directing OPM to freeze locality increases and to grant selected law‑enforcement categories a larger 3.8% boost [1] [2] [3]. Normally a formula under the Federal Employees Pay Comparability Act (FEPCA) would have produced a 3.3% across‑the‑board raise and large locality adjustments for 2026, but the President used statutory authority to replace that result [4] [5].
1. How pay is supposed to be calculated: the statutory formula that was sidelined
Federal law (FEPCA) contains a formula that ties basic GS pay to the Employment Cost Index (ECI) and adjusts locality pay using Bureau of Labor Statistics data; for 2026 that formula produced an OPM/Federal Salary Council recommendation of a 3.3% base increase and average locality increases near 18.88% [4] [5]. The Federal Salary Council explicitly calculated a 3.3% base under 5 U.S.C. provisions using the ECI [4].
2. Who actually set the 2026 raise this year: presidential alternative pay plan
The President can submit an alternative pay plan to Congress under the statute and thereby replace the automatic FEPCA outcome; in late August 2025 President Trump transmitted such a plan authorizing a 1.0% base increase, zero locality increases, and directing OPM to use its authority to give certain law‑enforcement personnel an extra amount to match a 3.8% military raise [1] [2] [3].
3. Role of OPM, agencies and Congress in final implementation
The Office of Personnel Management implements pay schedules, issues special rate tables and works with agencies to identify which law‑enforcement jobs qualify for higher pay; OPM’s technical actions, not the President’s letter alone, produce the final published pay tables and special‑rate lists [6] [2]. Congress retains power to set pay by statute and can reject or override alternative plans by passing its own legislation, which is why unions and some lawmakers proposed higher increases (e.g., FAIR Act / bills seeking ~4.3%) [7] [8].
4. Why the White House replaced the FEPCA outcome—fiscal framing and alternatives
The White House framed the alternative plan as a fiscal restraint measure to avoid what it called “irresponsible increases” that would have resulted from letting the statutory locality and ECI‑based formula take effect—an outcome it said would have cost far more in the first year [9] [3]. Opposing stakeholders (unions and some members of Congress) pushed back with proposals for larger raises (around 4.3%) and criticized freezes as harmful to recruitment and retention [7] [8].
5. What this means for different groups of federal employees
Most civilian GS employees face a modest 1.0% base increase for 2026 under the alternative plan, while locality pay increases were set at zero—meaning employees in high‑locality areas do not receive the large locality bump the formula would have produced [1] [2]. A subset of law‑enforcement personnel will get a 3.8% increase, but OPM and agencies must define eligibility and publish special‑rate lists before those raises take effect [3] [6].
6. Conflicting reporting and remaining uncertainties
Sources differ on early administration budget proposals and congressional proposals: some reporting described an initial White House budget proposing no raise, others described competing proposals or later alternative plans proposing 1% [10] [11] [1]. Final implementation details—exact OPM tables, which law‑enforcement categories qualify, and any congressional intervention—are matters OPM and Congress could still change; available sources note OPM expected to publish special‑rate tables and agencies would determine eligibility [6] [3].
7. Practical takeaway for federal employees and observers
The practical decision‑makers here are the President, who can submit an alternative pay plan that changes the FEPCA outcome (which happened for 2026), OPM and agency HR offices that implement and specify eligibility, and Congress, which can legislate different pay levels. Employees should watch OPM’s published pay tables and agency guidance for final lists and effective dates [1] [6] [3].
Limitations: this account follows the documents and reporting assembled above; available sources do not mention whether Congress ultimately enacted different 2026 pay legislation after the White House alternative plan was transmitted, so that outcome is not asserted here (not found in current reporting).