Lawrence: Welcome to the Federal Workforce Roundup, your essential
weekly briefing on the policies and proposals shaping your career,
your benefits, and your retirement.
Whether youâre a current federal employee navigating changes in the civil service,
or a retiree keeping a close watch on your hard-earned pension and healthcare, this
is your source for the latest news from Capitol Hill and the executive branch.
Each week, we cut through the noise to bring you the critical updates on budget
negotiations, pay raises, workforce policies, and the legislative battles that
directly impact the federal community.
Let's get you up to speed on what happened this week.
The first week of June 2025 brought several important developments
for the federal community.
Below is a roundup of key news affecting U.S.
federal employees and retirees, organized by category for clarity.
Issues That Affect Current and Retired Federal Workers
Congressional Reconciliation Bill â Civil Service Changes: A major budget
reconciliation package moving through Congress contains sweeping provisions
targeting federal pay and benefits.
The House narrowly passed the âOne Big Beautiful Bill Actâ in late May, and the
Senate is now weighing its own version.
The legislation would eliminate the FERS annuity supplement (the âbridgeâ
payment for retirees under 62) effective 2028, with exemptions for certain
mandatory early-retirement personnel.
It also introduces an âat-willâ employment option for new hires â newly
hired feds would choose between keeping normal civil-service job
protections but contributing ~14.4%
of salary to FERS, or giving up tenure protections and contributing 9.4%
(a 5% increase).
Other provisions would impose a $350 fee for Merit Systems Protection Board appeals
(refunded if the employee prevails) and require audits to remove ineligible family
members from FEHB health insurance plans.
Notably, lawmakers removed some earlier proposals â a switch to a âhigh-5â
annuity calculation and a general FERS contribution hike â after opposition.
Federal employee organizations warn these changes could be devastating:
the National Active and Retired Federal Employees Association (NARFE) cautioned
that increasing FERS contributions is essentially âa 5% pay cutâ for
new employees while also undermining merit-based civil service protections.
The American Federation of Government Employees (AFGE) blasted the package
as âa direct assault on federal employeesâ that would slash take-home
pay and obliterate workplace rights.
Unions are urging the Senate to strip these provisions, and final
negotiations are expected by early July.
Supreme Court Expands Paid Military Leave: In a victory for federal employees
who are military reservists, the U.S.
Supreme Court ruled on April 30 in Feliciano v.
DOT that agencies must grant an additional 22 days of paid military leave per year
for reserve members called to active duty during a national emergency.
The Court held that a federal employee is âentitled to differential pay if the
reservistâs service temporally coincides with a declared national emergencyâ
â without any need to prove a direct connection to the specific emergency.
This means current or former federal workers who served on such
active duty orders may have been improperly denied paid leave and
pay differentials in the past.
Affected individuals (e.g.
veterans of post-9/11 contingency operations) can
file claims for compensation.
Successful claimants who are still federal employees will have leave restored, while
those who retired or left government can receive lump-sum back pay for the missed
leave, at their salary rate at retirement.
This court decision strengthens USERRA rights and could benefit thousands of
veteran federal employees and retirees who were previously forced to use personal
leave or take a pay cut when mobilized.
Issues That Affect Current Federal Workers
Federal Pay Raise Outlook: The White Houseâs fiscal year 2026 budget,
released in early June, proposed no pay increase for federal civilian employees.
President Trumpâs budget was silent on a 2026 raise (widely interpreted as a
plan for 0%), even as it included a 3.8%
raise for military personnel.
Unless Congress intervenes, this could mean a freeze on
General Schedule pay next year.
(By contrast, for 2025 the military received a 4.5%
increase while civilians got about 2%.)
Lawmakers and federal employee advocates are already pushing back:
Representative Gerry Connolly (D-VA) and Senator Brian Schatz (D-HI)
reintroduced their annual pay parity bill, this time proposing a 4.3%
average pay raise for federal employees in 2026.
While such bills (the latest version of the FAIR Act) have historically failed
to pass, they signal growing pressure to at least match military raises.
Unions argue that âpay parityâ â equal percentage raises for civilian and
military â is needed to maintain federal workforce morale and competitiveness.
The final word on the 2026 raise will likely come in late August (when the
President must formally announce any alternative pay plan) and ultimately in
Congress or a December executive order.
Telework Guidance Amid D.C.
Events: In an interesting turn, OPM is encouraging telework and flexible
schedules for Washington, D.C.-area
federal employees in mid-June due to a large public event.
In a memo to agencies, OPM advised that preparations for the Armyâs
250th Birthday Parade (scheduled for June 14 on the National Mall) could
snarl traffic starting Wednesday, June 11, and urged agencies to
permit âsituational/unscheduled telework and other workforce
flexibilitiesâ later that week.
Agencies can also approve employee leave or alternative work hours
to alleviate the disruptions.
This guidance comes just months after the administrationâs push to curtail
routine telework â President Trump in January ordered agencies to end widespread
telework arrangements â but practical needs have prompted a temporary exception.
Notably, the USDA even instructed its D.C.
headquarters staff to work remotely for three weeks because the agencyâs
building is being used to quarter soldiers participating in the parade.
Employees reporting on-site were warned to expect delays and monitor road closures.
While brief, this flexibilities memo tacitly acknowledges that telework
remains an important tool for continuity of operations, even as
normal telework policies have tightened.
OPM Moves to Quicken Discipline Process: The Office of Personnel
Management announced a proposed rule on June 2 that would make it
easier to fire federal employees for misconduct or poor performance.
The rule is meant to âenhance the federal governmentâs ability to hold
employees accountable for serious misconduct,â according to OPMâs statement.
It would implement President Trumpâs âDepartment of Government
Efficiencyâ workforce initiative by streamlining the procedures for
removing employees who âbreak the publicâs trust,â effectively extending
the tougher suitability standards used in hiring to post-hire conduct.
Currently, agencies face lengthy, complex processes to discipline or remove
personnel, and administration officials argue this breeds a culture with âno
recourse for lack of performance.â
OPMâs Acting Director Chuck Ezell said the changes will cut red tape
and reinforce that public service is a privilege, not a right.
The proposed regulations (set to be published in the Federal
Register on June 3) will be open for public comment through July 3.
Federal employee unions are expected to object, as the rules would likely
curtail the time and appeals avenues employees have in adverse actions.
This is one of several workforce policies the administration is pursuing to speed
up hiring and firing in government.
Workforce Reduction Plans and Pushback: The administrationâs drive to shrink
the federal workforce by reorganizing agencies and cutting staff continues to
unfold â and to meet legal challenges.
At the Department of Veterans Affairs, Secretary Doug Collins
has proposed cutting around 80,000 jobs (about 15% of VAâs staff) to
bring headcount back to 2019 levels.
Additionally, agencies across government have been directed to
prepare Reduction in Force (RIF) plans as part of President Trumpâs
initiative to âoptimizeâ the workforce.
However, a federal court injunction has blocked implementation of mass RIFs at
many agencies pending further review.
(This stems from a lawsuit by federal employee unions, where a
judge in late April barred agencies from executing the governmentwide
reorganization via layoffs; that case is now headed to the Supreme Court).
In agencies not explicitly covered by the injunction, some layoffs are
moving forward â for example, the National Archives informed nearly
100 employees (about 3% of its staff) of RIF separations this month.
Federal employee unions and advocacy groups are actively protesting these cuts.
On June 6, hundreds of veterans and federal workers rallied on the National
Mall to oppose the VA downsizing, arguing it will harm veteran services.
AFGE National President Everett Kelley (himself an Army veteran) noted
that âthe VA is a place of veterans serving veterans,â and warned the
âmass reorganization plans â¦ are a targeted attack on veteran jobs, health
care, benefits and union rights.â
Other speakers, including VA nurses, warned that frontline capacity would be
stretched dangerously thin, impacting medical care and benefits processing.
One Homeland Security employee at the rally, an Army veteran, voiced concern
that âif theyâre going to cut people, benefits are going to go downâ¦everything
is going to roll downhill.â
Despite these objections, agency leaders insist that only ânon-mission-criticalâ
positions will be eliminated and that efficiencies will improve.
This tug-of-war between the administrationâs reform agenda and
employee protections is ongoing â with further legal showdowns expected
if the Supreme Court weighs in, and continued public pressure
from unions to protect jobs.
Postal Service Contract Agreement: In labor news, the American Postal
Workers Union (APWU) and the U.S.
Postal Service reached a tentative deal on a new union contract.
On June 6, APWU President Mark Dimondstein announced a tentative 2024â2027 Collective
Bargaining Agreement (CBA) with USPS.
The agreement is set for three years and covers postal clerks,
maintenance workers, and other APWU-represented employees nationwide.
While full details of the tentative contract were not immediately released,
such agreements typically address wages (cost-of-living adjustments, general
raises), benefits, and work rules.
The deal now goes to APWUâs membership for ratification in the coming weeks.
Reaching a negotiated settlement is a positive development, as it averts the
need for binding arbitration and ensures continuity of operations for USPS.
(The previous APWU contract had expired in late 2024, and negotiations
had been ongoing for months.)
This is the second postal union contract settled recently â the National Postal
Mail Handlers Union also approved a contract earlier â indicating a
period of labor stability at USPS.
For current postal employees (who are federal employees in a separate
personnel system), the tentative deal likely means secured wage increases and
preserved benefits through September 2027, pending union ratification.
Issues That Affect Retired Federal Workers
Retirement Claims Backlog and Processing Reforms: The influx of federal
retirements surged unexpectedly this spring, straining the Office of Personnel
Managementâs processing capacity.
OPM received 15,048 new retirement claims in May 2025, an unseasonably
large number that far exceeds May totals in recent years.
As a result, OPMâs retirement claims backlog jumped by 33% in one month, rising
from about 16,100 pending cases at end of April to 21,483 cases at end of May.
(For context, this backlog is nearly as high as the peak seen each January,
when retirements typically spike.)
The unusual surge is likely driven by the ongoing reorganization efforts
and voluntary early-out offers prompting more employees to retire.
In response, OPM has just rolled out a new fully digital retirement application
system aimed at speeding up processing.
As of June 2, all federal agencies must submit retirement paperwork electronically
via OPMâs Online Retirement Application (ORA) platform, and OPM will no longer
accept paper retirement packages.
OPM announced it successfully migrated over 400 million personnel records to
a new electronic Official Personnel Folder system as part of this overhaul.
The modernized system lets staff process cases online (no more shipping paper
folders) and includes a more user-friendly interface for reviewing files.
The goal is to dramatically reduce the infamous backlog and
shorten processing times (which currently average about 2 months).
If the new digital process works as intended, retiring federal workers should
see faster annuity adjudications and fewer delays in getting their pension payments.
OPMâs push to automate retirement processing actually began in the
prior administration, but it has accelerated under the Department of
Government Efficiencyâs oversight.
Bottom line for recent and soon-to-be retirees: expect improvements in
how quickly your retirement claim is handled, though OPM is still
digging out from Mayâs large volume.
Social Security Fairness Act Implementation: A significant
new law benefiting many federal retirees is now being implemented.
In January 2025, President Biden signed the Social Security Fairness Act,
which repealed the Windfall Elimination Provision (WEP) and Government Pension
Offset (GPO) â two long-criticized rules that reduced Social Security benefits
for those who also receive a government pension (such as CSRS retirees) or
spousal benefits from such retirees.
As of mid-2025, the Social Security Administration is well underway
in adjusting benefits and issuing back payments under the new law.
About 3.2
million affected retirees are entitled to benefit increases, including retroactive
payments for benefits since January 2024 (when the repeal took effect).
By late May, SSA reported it had processed over 2.5
million retroactive payments to retired teachers, police, federal employees
and others who had been âlocked outâ of full benefits due to WEP/GPO.
This represents roughly 90% of the cases, with the remaining complex cases
to be completed by the end of 2025.
Many CSRS retirees (who spent careers not paying into Social Security) are seeing
their Social Security checks increase, in some cases by hundreds of dollars per
month, now that the WEP penalty is gone.
Spouses and widows of federal retirees are likewise now eligible
for full Social Security survivor benefits without the GPO offset.
SSAâs guidance says most beneficiaries should have received a one-time
lump sum by the end of March for retroactive amounts, and higher
monthly payments began in April.
Those who havenât seen an expected adjustment can contact SSA, but the
vast majority have been automated.
This is a long-awaited change â the culmination of decades of lobbying
by retiree groups â and it substantially boosts retirement income
for affected federal annuitants.
Note: These changes do not affect the basic civil service pension;
they only increase Social Security benefits for those who earned them.
Retirees who spent part of their careers in Social Security-covered
employment (or who are entitled to Social Security via other non-federal
jobs) should review their new benefit statements to understand the increases.
2026 COLA Predictions and Inflation Trends: Though the next cost-of-living
adjustment for federal retirees wonât be official until the autumn,
early indicators are emerging.
The COLA for 2025 (received this January) was 2.5%,
reflecting cooling inflation compared to the big 8.7%
bump in 2023.
So far, inflation in 2025 has remained moderate.
The Consumer Price Index for Workers (CPI-W), which is the basis
for federal retirement and Social Security COLAs, was up about 2.2%
over the 12 months through May.
If that trend holds, the COLA payable in January 2026 would be modest.
The Senior Citizens League, a retireesâ advocacy group, released
a projection of roughly a 2.4%
COLA for 2026 based on the latest data.
This is only a rough guess â the actual COLA will be determined by CPI-W
averages in July, August, and September.
As of now, it appears 2026âs adjustment will be in the low-2%
range, assuming inflation doesnât accelerate in the coming months.
Itâs worth noting that FERS retirees (who make up about 44% of federal
annuitants) receive COLAs that can be slightly reduced if inflation exceeds 2%.
In other words, if the COLA calculation comes out above 2%,
FERS COLAs are capped at 2% or CPI-W minus 1%, depending on the level.
But with current inflation levels, that likely wonât come into play this year.
All retirees will likely get the full CPI-based COLA.
Meanwhile, Social Security beneficiaries are on track for a
similar COLA in 2026 (since the Social Security COLA is identical to CSRS
COLA and based on the same index).
We will know more after the summer â and in mid-October,
the 2026 COLA will be formally announced by the Labor Department.
Retirees should plan for a modest increase, and keep an eye on
energy and food prices which could still sway the final number.
Overall, the post-pandemic inflation spike has abated, leading to more
typical COLA adjustments that help maintain purchasing power without the
extremes of the past couple years.
Each of these developments from early June 2025 carries implications
for federal employees and retirees.
Legislative proposals in Congress could reshape benefits and job protections if
enacted, so many in the federal community are watching the progress of the budget
bill and related reforms closely.
At the same time, executive actions and court decisions are actively changing
the landscape â from how federal agencies manage their workforces (telework,
discipline, staffing levels) to how retirees receive earned benefits
(pensions, Social Security, COLAs).
Current federal workers should stay informed about potential changes
to their pay, rights, and workplace policies, while retired employees
should take note of benefit updates that may affect their income.
This weekâs news underscores the dynamic nature of federal employment
â whether youâre still on the job or enjoying retirement, staying
abreast of policy changes is key.
The Federal employee community, through its unions and associations, continues
to advocate vigorously on these issues.
We will continue to provide updates on any new developments impacting
pay, benefits, and the wellbeing of federal workers and retirees.
And thatâs a wrap on this weekâs Federal Workforce Roundup.
The landscape for federal employees and retirees is constantly shifting,
with major decisions being made about everything from pay and job security
to retirement benefits and the very structure of the civil service.
Staying informed is your best tool.
Be sure to subscribe wherever you get your podcasts, so you never miss an update.
Thanks for tuning in.
Weâll be back next week to track the latest developments
and what they mean for you.
Until then, stay engaged and be well.