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Key developments in the world of federal employee benefits: health, pay, and much more.

A Pay Freeze in Doubt, and Back Pay for Fired VA Employees

As Congress last week prepared to negotiate whether to provide federal civilian employees with a 1.9 percent pay increase next year, President Trump introduced additional uncertainty to the conversation.

Just one day after following up on his fiscal 2019 budget plan with a formal proposal to freeze federal workers’ pay, the president suggested he would “study” the issue.

“I’m going to be studying, you know, the federal workers in Washington that you’ve been reading so much about,” Trump said at a ceremony marking the signing of an executive order on retirement savings. “People don’t want to give them any increase. They haven’t had one in a long time. I said, 'I’m going to study that over the weekend.' It’s a good time to study it—Labor Day. Let’s see how they do next week. But a lot of people were against it.”

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The “lot of people” who have been against a pay raise are primarily employees of the White House and the Office of Management and Budget. And Trump last Saturday retweeted Corey Stewart, the conservative Republican...

OPM Concedes Defeat on Retirement Cuts, and CFPB Encourages Credit Monitoring for Military

Office of Personnel Management Director Jeff Pon appears to believe that a controversial proposal to cut federal employees’ retirement benefits stands little chance of becoming law, according to news reports.

According to Federal Times, Pon said a proposal he sent to House Speaker Paul Ryan earlier this year to significantly cut several federal retirement programs was “highly unlikely to happen.” The director spoke at the annual conference of the National Active and Retired Federal Employees Association in Florida on Monday.

In May, Pon sent a letter to Ryan proposing legislation to make a number of cuts to federal employee retirement programs. Initially proposed last year as part of President Trump’s fiscal 2018 budget, the plan included eliminating Federal Employees’ Retirement System supplements for federal workers who retire before Social Security kicks in at age 62; changing the basis of a retiree’s defined benefit annuity payments from their highest three years of salary to their highest five years; and increasing the amount feds contribute to FERS by 1 percentage point per year until their share matches the government’s contribution.

Pon had also suggested eliminating cost-of-living adjustments for FERS retirees—both current and future—and reducing Civil Service Retirement...

Guaranteed Paid Sick Leave for Contractors, and Changes to the Annual Charitable Giving Drive

Three federal agencies on Wednesday published a rule finalizing implementation of an Obama-era executive order requiring federal contractors to provide employees with seven or more days of paid sick leave, including leave for family care.

The rule has been in effect on an interim basis since December 2016. In 2015, President Obama issued an executive order requiring the paid leave for contractors, which was projected at the time to affect around 300,000 full- and part-time workers. Under the rule, an employee would earn one hour of sick leave for every 30 hours worked, up to seven days per year.

According to the agencies’ filing with the Federal Register, since the proposed rule was first published in September 2016, six of the seven comments from the public were supportive of the requirement. The other comment sought clarification on how it would impact a specific scenario.

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Meanwhile the Office of Personnel Management last week announced the federal government’s annual charity fundraising drive, which is set to begin next month.

In a memo to agency heads, OPM Director Jeff Pon said the 2018 Combined Federal Campaign...

A Rollback of Military Financial Protections, a Per Diem Increase for Feds, and More

The White House reportedly soon will propose to roll back enforcement of a law intended to protect members of the military from predatory loans.

According to NPR, the Trump administration recently sent documents to the Defense Department outlining a proposal to change rules that effectively block auto lenders from tacking products like overpriced gap insurance—a policy that protects vehicles’ value after they leave a dealer lot—onto a car loan.

Acting Consumer Financial Protection Bureau Director Mick Mulvaney is also working on changes to weaken overall enforcement of the Military Lending Act. Mulvaney’s plan would cease CFPB’s proactive monitoring of payday lenders to ensure companies do not violate the law.

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In a statement to NPR, the Defense Department described the auto loan plan as merely a proposal, and said changes would only be implemented “if necessary” and in a way that “does not reduce MLA protections.”

Center for Responsible Lending Federal Advocacy Director Scott Astrada blasted the proposals to reduce service members’ protections under the Military Lending Act.

“Auto dealers should not be allowed to rip off military servicemembers with exorbitantly priced...

Commuting Troubles for Many Feds, and What’s Next for a Pay Raise

A group of seven Democratic lawmakers from the Washington, D.C., area demanded Wednesday that House leadership add reforms and funding for the city’s public transit service to a pending infrastructure bill to improve federal employees’ commute to work.

In a letter to House Transportation Committee Chairman Bill Shuster, R-Penn., and ranking member Peter DeFazio, D-Ore., a group of Democrats representing a large number of federal workers in the D.C. region highlighted agencies’ reliance on the Washington Metropolitan Area Transit Authority, which runs Washington’s Metro system.

“The federal government and WMATA have a symbiotic relationship and the operations of the two entities are inextricably linked,” wrote the lawmakers, led by Rep. Gerry Connolly, D-Va. “As part of a governing structure unique among national transit systems, the federal government appoints two of the eight members of the WMATA Board of Directors. Federal employees in the National Capital Region use Metrorail to get to and from work, comprising 42 percent of Metrorail’s peak period customers, and more than one-third of Metrorail stations are located on or near federal property, directly serving federal facilities.”

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