Lawmakers eyeing changes to federal benefits, hiring, pay

Over the last several weeks, lawmakers have been examining a range of legislation that would affect federal employees in one way or another.

The House Oversight and Government Reform Committee earlier this month considered, and ultimately advanced, about a dozen bills, some of which received strong bipartisan support from committee members.

Here is a round-up of some recent legislation that may bring changes to benefits, pay and hiring practices for the federal workforce.

Raising VSIP’s spending cap

One of the bills that advanced out of the Oversight committee earlier this month would raise the spending cap for federal employee “buyouts” through the Voluntary Separation Incentive Payment (VSIP) program.

Currently, agencies are limited to offering employees up to $25,000 if they choose to leave their jobs through VSIP — it’s a price cap that has not changed since the 1990s.

If enacted, the Federal Workforce Early Separation Incentives Act would increase the limit on VSIP payments, letting agencies offer employees up to six months of their salary, with approval from the agency head, if they agree to quit. Supporters of the bill said tying the VSIP payments to salary rather than an across-the-board cap would allow the amount to adjust over time with inflation.

Although the program has been around for decades, VSIP has more recently come into the spotlight, as the Trump administration undertakes major reductions across the federal workforce. Rep. Nick Langworthy (R-N.Y.), who introduced the legislation, called the current $25,000 cap “a barrier to responsible workforce management.” He added that the limitations create “uncertainty” for employees and “leave agencies with fewer options.”

“This outdated cap has limited agencies’ ability to offer competitive, voluntary offramps,” Langworthy said during a Feb. 4 committee markup. “As a result, the federal government often misses opportunities to reduce payroll costs early and instead turns to more expensive and disruptive alternatives, such as involuntary separations, extended administrative leave or simply paying positions that no longer align with mission needs.”

During the committee markup, Rep. James Walkinshaw (D-Va.) also expressed support for the bipartisan legislation, calling the proposed change “long overdue,” especially considering that the VSIP payment cap is about 30 years old.

The bill advanced out of the committee in a unanimous, bipartisan vote of 43-0. Rep. James Comer (R-Ky.), the committee’s chairman, said the legislation would “make VSIP offers more attractive for downsizing agencies.”

“VSIP authority is often preferable to involuntary options, such as implementing a cumbersome reduction-in-force process,” Comer said. “But given the status quo, too many employees would choose not to take the offer, leaving taxpayers on the hook for their continued salaries and benefits.”

Skills-based federal IT hiring

Another bill that lawmakers on the Oversight committee recently approved aims to open the doors to a wider range of federal job candidates for technology-related roles across government.

If enacted, the Cybersecurity Hiring Modernization Act would bar agencies from setting education requirements for cybersecurity positions, unless they are legally required to do so. Additionally, agencies would only be able to consider a job candidate’s educational background if it directly pertains to the skills necessary for the open position. The bill applies to the GS-2210 IT management series and other cybersecurity positions designated by the National Initiative for Cybersecurity Education.

The bill would advance a push toward skills-based hiring that’s already underway across the federal government. In recent years, both the Trump and Biden administrations took steps to promote a focus on practical skills, rather than a job applicant’s educational background. For instance, the Trump administration’s May 2025 “merit hiring plan” includes, among other aspects, an emphasis on skills-based recruitment.

Rep. Nancy Mace (R-S.C.) introduced the legislation, saying that it would be “an important step to tearing through the paper ceiling,” while also pointing to workforce data showing that federal IT employees are disproportionately older workers.

“Degree requirements function as a poor substitute for what actually matters in the labor market — merit, skills and talent,” she said during the Feb. 4 committee markup. “A diploma may signal someone mostly showed up somewhere for a few years, but it does not reliably indicate whether a worker can perform the tasks a job requires, adapt to new technologies or contribute productively.”

In addition to removing degree requirements, the bill would also require OPM to publish an annual report on any changes that occurred in education qualification standards for federal cybersecurity jobs, as well as publish data on the education levels of new cybersecurity hires across government.

Rep. Shontel Brown (D-Ohio), a lead co-sponsor of the legislation, said skills-based hiring in federal cybersecurity roles would reduce hiring barriers and open the doors to more diverse and capable job candidates.

“This bill does not lower the qualifications, but instead recognizes educational experience is not one-size-fits-all,” Brown said. “It will help level the playing field for veterans, community college graduates, career changers and people who have had nontraditional educational pathways.”

Lawmakers on the committee unanimously voted in favor of the bipartisan bill, resulting in a vote of 44-0. The legislation is now pending further consideration in the full House.

Federal pay raise prospects

In an effort to bring federal salaries closer in line with private sector wages, as well as rising costs of living, lawmakers additionally reintroduced legislation earlier this month that attempts to secure a significant pay raise for federal employees in 2027.

A new Democrat-led bill proposes a 4.1% pay raise next year, under the latest iteration of the Federal Adjustment of Income Rates (FAIR) Act. It’s a combination of a 3.1% across-the-board raise and a 1% average locality pay adjustment. Although Democrats introduced it in both the House and Senate, the FAIR Act has not gained support from Republicans.

“Federal workers across the nation dedicate their lives to serving their fellow citizens and keep our government running,” Sens. Mark Warner (D-Va.) and Tim Kaine (D-Va.) said in a joint Feb. 10 statement on the FAIR Act. “It’s critical that we are recruiting and retaining individuals with the best experience and expertise.”

If it’s passed, federal employees would see a larger raise in 2027, compared to the 1% pay increase most employees received in January. In contrast, federal law enforcement personnel and military members received a 3.8% raise earlier this year.

The possibility of the FAIR Act gaining traction ahead of 2027 may be slim. Despite its reintroduction each year for more than a decade, Congress has yet to pass any version of the FAIR Act. The actual federal pay raises employees receive fall short of what the bill has proposed most years.

Recently, the FAIR Act has called for significantly bigger pay raises of 4.3% in 2026, 7.4% for 2025 and 8.7% for 2024. But the actual raises that most employees received in those years were smaller by comparison: 1% for 2026, 2% for 2025 and 5.2% for 2024.

Doreen Greenwald, national president of the National Treasury Employees Union, brought further attention to the FAIR Act’s reintroduction during a House Democrats’ hearing last week.

“It’s vital that federal employees are fairly compensated for the important work they do,” Greenwald said during the Feb. 12 hearing. “If the federal government is to compete for talent and rebuild the workforce, we need to offer competitive pay.”

Separately, in December, lawmakers on the Oversight committee advanced several other bills that would impact federal employees. Republican-led legislation to alter policies for the federal probationary period, as well as require detailed reporting on federal employees’ use of official time, advanced along party lines.

Some legislation with bipartisan support was also approved by the committee in December, including bills on training for federal supervisors, skills-based hiring of federal contractors and amending the system for relocation payments for federal employees. Those bills are all currently under consideration in the full House, but they have not seen much movement since advancing at the end of 2025.

If you would like to contact this reporter about recent changes in the federal government, please email drew.friedman@federalnewsnetwork.com or reach out on Signal at drewfriedman.11

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