What the Ron Johnson bill proposes for federal employee pay
Senator Ron Johnson of Wisconsin has introduced legislation that would tie federal employee pay raises to the same percentage as private-sector wage growth, rather than using the current formula based on the Employment Cost Index. Under his proposal, federal employees would receive annual pay adjustments that match what private employers are paying their workers in comparable roles.
The bill's core argument is that federal pay should move in sync with the private sector instead of sometimes outpacing it or falling behind it. Currently, the President sets federal pay raises each year using a formula that includes the Employment Cost Index (which measures how much employers spend on wages and benefits across the economy) plus a locality adjustment. Johnson's approach would replace that with a direct comparison to private-sector wage growth.
This is a legislative proposal, not a law yet. It has not passed both chambers of Congress. Understanding what it would do — and what it would not do — helps you follow federal pay policy as it develops.
Key Takeaways
- Johnson's bill would change how federal pay raises are calculated by using private-sector wage growth instead of the current Employment Cost Index formula.
- The bill has not become law and would require passage in both the House and Senate plus the President's signature to take effect.
- Federal employees would still receive annual pay adjustments under the proposal, but the size of those adjustments would depend on what private employers are paying.
- The bill does not address locality pay adjustments, which account for cost-of-living differences between regions.
- Any change to the pay formula would apply to future raises, not retroactively to past years.
How the current federal pay raise formula works
Right now, the President issues an executive order each year that sets the federal pay raise percentage. That order uses the Employment Cost Index from the Bureau of Labor Statistics as its starting point. The Employment Cost Index measures how much private employers and government employers combined are spending on wages and benefits.
The President can adjust the raise up or down from the Employment Cost Index figure, and often does. In recent years, federal pay raises have ranged from 1 percent to 5.2 percent depending on the year and the President's decision. The raise applies government-wide, though employees in different geographic areas also receive locality adjustments on top of the base raise to account for regional cost-of-living differences.
Johnson's bill would remove the Employment Cost Index from this process and instead require the government to track private-sector wage growth separately and use that number as the basis for federal raises.
What would change under Johnson's proposal
The main change would be the data source used to set the raise. Instead of the Employment Cost Index, the government would look at how much wages are growing in the private sector and use that percentage. The bill specifies using private-sector wage growth data, which is tracked separately from the broader Employment Cost Index.
In practice, this could mean federal raises would be higher in years when private employers are raising wages quickly, and lower in years when private wage growth is slow. The Employment Cost Index and private-sector wage growth do not always move at the same pace — sometimes one leads the other, and sometimes they diverge significantly.
The bill does not eliminate the President's discretion to adjust the raise, nor does it change locality pay. Federal employees in high-cost areas would still receive additional adjustments on top of the base raise.
The argument for tying federal pay to private-sector growth
Supporters of this approach argue that federal employees should not receive raises that consistently outpace what private employers are paying. They contend that the current formula sometimes results in federal pay growing faster than private-sector pay, which they view as inefficient use of tax dollars.
The argument also includes a fairness component: if private employers are restraining wage growth due to economic conditions, federal employees should face the same restraint rather than being insulated from it. Proponents see this as a way to keep federal compensation more closely aligned with what the broader labor market is doing.
This framing assumes that private-sector wage growth is the right benchmark for federal work, which is itself a policy choice rather than an objective fact.
Arguments against changing the pay formula
Federal employee unions and their allies argue that the current formula already keeps federal pay competitive without overpaying. They point out that federal employees often earn less than private-sector workers in similar roles, especially in high-cost metropolitan areas where locality pay does not fully close the gap.
Critics also note that private-sector wage growth can be artificially suppressed during recessions or periods of high unemployment, when workers have less bargaining power. Tying federal raises to private-sector growth could mean federal employees receive smaller raises during economic downturns, even though their cost of living has not fallen.
There is also a practical concern: private-sector wage growth data is less precise and more subject to revision than the Employment Cost Index, which could create uncertainty in federal pay planning.
Current status of the bill
Johnson's bill has been introduced in the Senate but has not advanced to a vote. It remains in committee. Federal pay legislation moves slowly and faces competing priorities in Congress, so the timeline for any action is uncertain.
Even if the bill were to pass the Senate, it would still need to pass the House of Representatives and receive the President's signature. The President's party and priorities affect whether such legislation moves forward.
You can track the bill's status through Congress.gov by searching for the bill number or Johnson's name. That site shows you which committees it has been assigned to, whether hearings have been held, and whether it has moved to a floor vote.
What this means for your federal pay going forward
If you are a federal employee, your pay raise for the next several years will almost certainly be set under the current formula, not Johnson's proposal. Even if the bill passes, it would apply to future raises only, not retroactively.
The most practical thing you can do is monitor your agency's announcements about pay raises each year. Your agency will communicate the raise percentage once the President issues the executive order, usually in late fall or early winter for a raise that takes effect the following January.
If you want to weigh in on federal pay policy, you can contact your representatives in Congress. Federal employee unions also track pay legislation and communicate with members about bills that would affect compensation.
Frequently Asked Questions
Would this bill affect my current salary or only future raises?
Only future raises. Any change to the pay formula would apply to the annual adjustments going forward, not to what you have already earned. Past years' pay would remain unchanged.
Does the bill change how locality pay works?
No. The bill focuses on the base raise percentage. Locality adjustments, which account for regional cost-of-living differences, would continue under the current system.
What if private-sector wages are growing faster than federal pay under this formula?
The bill would increase federal raises in those years to match private-sector growth. The goal is to keep federal pay aligned with private-sector growth, whether that growth is fast or slow.
How can I learn about this bill has passed?
Search for the bill on Congress.gov using Johnson's name or the bill number. That site shows the current status, which committees are reviewing it, and whether it has moved to a floor vote in either chamber.
Would this bill affect my pension or benefits?
The bill as written addresses only the annual pay raise percentage. It does not change how pensions are calculated or how benefits are structured. Those remain separate from the pay raise formula.