Federal Employee Return to Work Act: Telework Comes with a Pay Cut

The Federal Employee Return to Work Act is basically saying that if you're a federal employee who teleworks at least once a week, your paycheck could take a hit. Specifically, the bill stops annual pay adjustments for "covered employees" and resets their locality pay to the "Rest of US" scale, which could mean a lower salary, especially for those in higher-cost-of-living areas.

Paycheck Pinch: How the Bill Changes Compensation

The core of this bill is about changing how much some federal workers get paid, and who gets those changes. If you're a "covered employee"—meaning you telework at least one day a week or 20% of the time if you're on an alternative schedule—you won't get the yearly pay bumps that normally come with the job (SEC. 3). Plus, your pay will be pegged to the "Rest of US" locality rate, no matter where you actually live and work (SEC. 4). For example, a federal employee living in a high-cost city like San Francisco, but who teleworks regularly, might see their pay adjusted down to the "Rest of US" rate, which is significantly lower. That's like getting a demotion just for working from home.

Certain employees are off the hook, though. If you telework due to a disability, are in the Foreign Service, are a federal law enforcement officer, are on active military duty, or if your worksite isn't a typical office setting as defined in section 531.605(a)(1) of title 5, Code of Federal Regulations, these pay changes don't apply (SEC. 2).

Real-World Rollout: Who's Affected and How?

This bill, if it becomes law, starts impacting paychecks at the start of the next fiscal year after it's enacted (SEC. 5). Let's say you're a federal IT specialist living in Denver, where the cost of living is relatively high. If you telework a couple of days a week, you're a "covered employee." Your pay could be reset to the "Rest of US" scale, which might be a pay cut compared to what you'd get if your locality pay reflected Denver's cost of living.

One of the big questions is how agencies will handle this. Will they cut back on telework options to avoid having employees fall under the "covered" definition? That could mean more people forced back into offices, even if telework has been working well. There is a legit concern that the definition of "covered employee" is too broad and could mess with how agencies are able to use telework to get things done.

The Bottom Line

The Federal Employee Return to Work Act aims to save money by changing the pay rules for federal employees who telework. While it exempts some workers, the bill could mean lower pay for many, potentially impacting their financial stability and work-life balance. It also raises questions about how agencies will manage telework policies going forward, and whether this will lead to a less flexible and potentially less productive federal workforce.