Teleworking Feds Face Pay Freeze: 'Federal Employee Return to Work Act' Nixes Raises, Adjusts Locality Pay

The 'Federal Employee Return to Work Act' is shaking up the paychecks of federal employees who work remotely. Starting the next fiscal year after it's enacted, this law targets "covered employees" – basically, anyone teleworking at least one day a week, or 20% of their time on an alternative schedule. There are a few exceptions carved out, like folks with disability accommodations, Foreign Service members, federal law enforcement officers, active-duty military, and those whose official worksite isn't a typical office setting as defined by regulation 5 CFR 531.605(a)(1).

Paycheck Pinch

This bill hits teleworking feds in two ways. First, it freezes annual pay adjustments under 5 U.S.C. 5303. That means no yearly raises that typically keep pace with inflation and the cost of living. Second, it shifts these employees to the "Rest of US" locality pay scale (5 U.S.C. 5304). Locality pay adjusts salaries based on the cost of living in different areas – think San Francisco versus Des Moines. The "Rest of US" rate is generally lower than many specific localities, meaning a potential pay cut for feds in higher-cost areas.

Real-World Rollout

Imagine a federal employee in Denver, CO, who teleworks two days a week. Under this law, they'd be switched to the "Rest of US" pay scale, which is likely lower than Denver's. They also wouldn't get their usual annual raise. For a mid-career professional, this could mean hundreds, maybe even thousands, of dollars less per year. That's groceries, rent, or childcare money – real impacts on family budgets.

The Bigger Picture

While the bill's stated goal might be to encourage a return to in-office work, it raises some practical concerns. Defining "covered employee" could get messy, leading to potential disputes. What if someone's job requires occasional remote work? And what about the impact on employee morale and retention? Losing experienced staff could cost the government more in the long run through training and recruitment. The bill also presents potential conflicts of interest. While it might save taxpayer money on salaries, it could also pressure employees back into offices, even if telework is more efficient. It could also create inequities between those who work in the office and those who work remotely. It could also create challenges for those who need to work from home due to family constraints. The bill also potentially reduces the governments ability to be flexible during times of national emergency, such as a pandemic.

It's worth remembering that existing laws, like the Telework Enhancement Act of 2010, already govern federal telework. This new bill adds another layer, specifically targeting pay, which could create more confusion than clarity.