The Federal Adjustment of Income Rates Act (FAIR Act) would increase federal employee pay in 2027 through three separate adjustments. The bill provides a 3.1 percent raise to the base salaries of all federal employees covered under the statutory pay systems, and the same 3.1 percent increase applies to prevailing wage workers (those paid based on local wage surveys, such as skilled trades employees). Additionally, locality pay—the supplemental pay that adjusts federal salaries based on regional cost of living—would increase by 1 percent in 2027. The legislation affects approximately 2 million federal workers across all agencies and has no explicit funding mechanism specified, as federal employee salaries are funded through existing agency budgets. The bill was introduced in February 2026 with a bipartisan group of sponsors and referred to the House Committee on Oversight and Government Reform.
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