Senate bills would cut pay for federal employees working remotely

Two new Senate bills threaten to reverse the progress made in fostering a flexible, efficient and satisfied federal workforce.

The Federal Employee Return to Work Act and the Federal Employee Locality Accountability in Retirement Act, introduced by Sen. Bill Cassidy (R-La.), would significantly reduce pay and retirement benefits for federal employees who work remotely. These proposals risk damaging the effectiveness of the federal government, ultimately burdening taxpayers.

The Federal Employee Return to Work Act aims to exclude federal employees who telework as little as one day per week from receiving raises and locality pay. This change would particularly affect those whose office locations are in high-cost-of-living areas, stripping them of compensation intended to offset the expenses of residing in such regions.

Locality pay can make up a significant portion of a federal worker's income, providing a vital cushion against disparities in living costs across different areas. By denying this pay to remote workers, the bill creates an unfair disparity between those who work in the office and those who telework, even though both contribute equally to the federal government’s mission.

The notion that remote workers do not deserve locality pay is built on the flawed assumption that physical presence in an office is synonymous with productivity. This view is increasingly outdated. A recent report from the White House Office of Personnel Management highlights the significant benefits of remote work, revealing that 68 percent of frequent teleworkers expressed a strong intention to remain in their roles, compared to just 53 percent of those who do not telework. Moreover, engagement levels among remote workers are significantly higher, with 77 percent reporting strong engagement versus 59 percent among office-bound counterparts.

These findings underscore that remote work is not merely a convenience; it is essential to maintaining a motivated and committed federal workforce.

Supporters of Cassidy’s bill often cite the underutilization of federal buildings as a reason to cut locality pay and retirement benefits. And indeed, a Government Accountability Office report revealed that some federal agencies are using only a fraction of their office space, with vacancy rates exceeding 90 percent in certain cases.

But this focus on empty offices is a red herring. This is a real estate problem, not an employee compensation problem, as it conflates building occupancy with employee productivity. Perhaps agencies should rent out empty offices or Congress should sell them off, but they do not equate to a lack of work being done.

In fact, remote work has often led to enhanced work quality and customer satisfaction. The Office of Personnel Management found that more than 84 percent of federal employees and managers report improvements in these areas due to telework. The federal government already has robust mechanisms in place to ensure accountability and performance, regardless of where an employee works from. By focusing on the physical occupancy of office buildings rather than the actual output of employees, these proposals unfairly target remote workers who are successfully fulfilling their duties from home.

Cassidy's other bill, the Federal Employee Locality Accountability in Retirement Act, seeks to exclude locality pay from the calculation of retirement benefits under the Federal Employees Retirement System. Currently, locality pay, which can comprise as much as 30 percent of an employee's salary, is included in the computation of retirement annuities. This provision ensures that federal workers are compensated fairly in retirement, reflecting the realities of their working years.

Removing locality pay from retirement calculations would severely affect the financial security of federal employees, particularly those who have spent their careers in high-cost areas. This measure is not only unfair but also shortsighted. It will likely discourage talented professionals from joining or remaining in the federal workforce, especially in positions based in expensive regions. Over time, this could lead to a brain-drain, making it increasingly difficult for the federal government to attract and retain the skilled workers it needs to function effectively.

Beyond the immediate harm these bills could cause to federal employees, there are broader implications for government efficiency and taxpayer costs. Although proponents of the bills argue that they are acting in the interest of taxpayers by cutting costs, the long-term consequences could be far more costly. As the federal government becomes less competitive in attracting top talent, the quality of public services could decline, leading to inefficiencies that ultimately burden taxpayers.

In contrast to these regressive proposals, the Telework Reform Act offers a more balanced and forward-thinking approach. Introduced by Sens. James Lankford (R-Okla.) and Kyrsten Sinema (I-Ariz.), this bipartisan legislation seeks to modernize federal work practices and codify flexible work arrangements into law.

The Telework Reform Act preserves existing flexible work arrangements and requires agencies and employees to renew telework agreements annually, ensuring that these arrangements continue to meet the evolving needs of both the agencies and the workforce. Additionally, the act mandates biannual surveys to assess the prevalence and impact of telework, along with annual reviews by the Office of Management and Budget. These measures will help to ensure that telework policies remain aligned with the goals of efficiency and effectiveness in federal operations.

The Telework Reform Act also supports military and law enforcement families by allowing federal agencies to hire military spouses into remote work positions outside of the competitive hiring process. This provision not only recognizes the unique challenges faced by these families but also taps into a highly skilled and adaptable workforce, enhancing the diversity and capability of the federal workforce.

As these bills move through the legislative process, lawmakers must consider their broader implications. The federal workforce is a vital component of our government, and its employees deserve fair compensation for the work they do, regardless of where that work is performed.

The push to penalize remote workers through reduced pay and retirement benefits is not only unjust but also counterproductive. If enacted, these measures would weaken the federal government’s ability to serve the public effectively and could result in higher costs to taxpayers in the long run.

Gleb Tsipursky, PhD, serves as the CEO of the hybrid work consultancy Disaster Avoidance Experts and authored the best-seller "Returning to the Office and Leading Hybrid and Remote Teams."