H.R. 7480: Federal Adjustment of Income Rates Act (119th Congress) Bill Summary

The bill titled the "Federal Adjustment of Income Rates Act," also known as the "FAIR Act," proposes adjustments to pay rates for certain government employees in the fiscal year 2027. The main components of the bill include:

Adjustment to Rates of Pay

1. **Statutory Pay Systems**: For calendar year 2027, the bill sets an increase of 3.1 percent in the basic pay rates for employees who are categorized under statutory pay systems. These pay systems primarily include pay scales for federal employees and are outlined in section 5302 of title 5 of the United States Code.

2. **Prevailing Rate Employees**: The bill also intends to adjust the pay for prevailing rate employees, who typically include those in roles where pay is determined by the market rates in various wage areas. It proposes a similar increase of 3.1 percent for these employees, thereby exempting these adjustments from the usual wage survey requirements that govern their pay rates as specified in section 5343(b) of title 5.

Adjustment to Locality Pay

In addition to the basic pay increases, the bill provides for an adjustment to locality pay, which is the portion of pay that compensates employees for geographic pay differences. It proposes an increase of 1 percent for locality pay for calendar year 2027, following the guidelines established in section 5304 of title 5.

Overall Purpose

The overarching aim of the bill is to ensure that federal employee wages remain competitive and to support the financial well-being of various wage categories within the government. This adjustment is seen as a response to economic conditions and aims to address any stagnation in pay compared to inflation or market standards.