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Hello everyone. I'm Ian Smith here with
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Wanted to talk to you today about the
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2027 federal pay raise. I know it's only
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February. 2027 is still quite a ways
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away, but would you believe the 2027 pay
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raise is already being discussed in
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Congress. How would a 4.1% pay raise
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next year sound to you if you're a
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current federal employee? That's the
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number that's been proposed. This is
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part of the fair act and that stands for
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federal adjustment of income rates and
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it's become an annual tradition. It
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started I believe back in 2014.
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It was introduced every year in the
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Senate by Senator Brian Shatz, a
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Democrat from Hawaii and Congressman
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Jerry Connelly, a Democrat from
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And they would introduce it every year
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about this time, January, February,
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somewhere around there. But of course,
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Congressman Connelly passed away not too
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long ago, and I wasn't sure if the Fair
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Act would continue being introduced as a
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result of that, but it has been, and
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it's been taken over by Congressman
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James Walkenshaw, a Democrat from
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And here is what the Fair Act is
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proposing for 2027. It would be a total
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4.1% pay raise for current federal
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employees. That would be a 3.1%
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acrosstheboard average pay increase and
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1% average locality pay adjustment.
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And obviously locality pay varies
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depending on what area of the country
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you're in, but those are the average
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And the rationale behind the fair act,
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it it um it always proposes a raise
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higher than what federal employees are
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likely to get otherwise. The pay raise
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is almost always determined by the White
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House, the president. Congress can get
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involved, but it's unusual. Typically,
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what will happen is the White House will
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propose a pay raise each year in the
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budget proposal for the coming year.
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That usually happens in the spring.
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Throughout the year, Congress could get
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involved. So, something like the Fair
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Act, if it were to become law, would
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enact a pay raise for the coming year.
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Usually though, it would get um if if
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Congress does get involved, it's going
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to become part of a larger spending
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bill. That would probably be more
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typical. And so, if Congress did
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override what the president proposes,
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that would be the pay raise. But that's
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pretty unusual. In August, the president
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issues an alternative pay plan letter is
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what it's called, and that that's kind
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of the next step in the process. That's
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where he formally outlines his request
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for what he thinks the pay raise should
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be for the coming year. And then it gets
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finalized in December when an executive
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order is issued and the Office of
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Personnel Management issues uh pay
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tables shortly thereafter to finalize
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the raise. That's the typical process.
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Before you get too excited about getting
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a 4.1% pay raise next year, I want to
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emphasize it's very unlikely that this
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is going to become law. The Fair Act has
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never become law throughout its history.
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But it does signal congressional
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priorities. It gets the the process
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going. As I said, it keeps pressure on
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the White House, but it it does help to
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shape the uh public and political
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conversation about federal pay. And one
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last thing that's important to note, uh
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this is different from a COLA, the cost
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of living adjustment. This what we're
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talking about here today is a pay raise
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for current federal employees. This
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would not impact retired federal
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employees in any way. The COLA is
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determined by an automatic formula. It
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never changes. It's based on inflation.
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The pay raise is determined by a
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political process. As I briefly outlined
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in this video, it's not based on
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inflation like the COLA is, at least not
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directly. If inflation's running higher,
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federal employees might be likely to get
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a higher pay raise than they would other
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otherwise just from the political
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pressure that's created by uh the fact
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that inflation's higher. But that's a a
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basic update on the situation. I hope
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you found this helpful. Um it is still
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very early on in the process. We don't
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have a final number for what the 20 27
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pay raise will be yet, but as the
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process unfolds throughout the year,
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stay tuned to FedSmith here on this
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channel. You can like and subscribe for
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updates and also visit our website,
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fedsmith.com, because we will be
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providing updates as they become
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available on what your pay raise is
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likely to be in the coming year. Have a
