As the year draws to a close, the federal workforce is set to enjoy a seasonal break and a modest pay boost heading into 2026, both developments officials say are intended to support millions of civilian employees after a challenging 2025.
In a late-December executive order, President Donald Trump granted most federal employees two additional paid days off around the Christmas holiday by declaring Wednesday, December 24 (Christmas Eve) and Friday, December 26, as excused days. With Christmas Day already on the calendar, this creates a five-day holiday break for many federal workers, spanning December 24–28 when combined with the weekend. Agencies will be closed, and employees excused from duty on those additional days, though agency leaders retain authority to require certain “mission-critical” staff to work if national security, defense, or urgent public needs demand it.
The extended holiday is a rare presidential action intended to give federal workers a reprieve during the busy travel and family season. While such closures do not create permanent federal holidays, they are treated like holidays for pay and leave purposes for this year. Federal offices, including some benefit and administrative services, may remain closed from Dec. 24 through Dec. 26, potentially affecting in-person access to programs like Social Security, although most benefit payments will continue on their regular schedules.
Just as employees are winding down for the holidays, another noteworthy update took effect for the year ahead: President Trump also issued an executive order finalizing a 1% across-the-board pay raise for most civilian federal employees in 2026. This raise applies to basic pay and does not include increases to locality pay, meaning locality rates remain at their 2025 levels. The 1% increase becomes effective with the first pay period, offering a very modest bump after a year marked by budget pressures and workforce adjustments.
While a 1% raise is smaller than many in the private sector typically see, it reflects the administration’s alternative pay plan approach and is consistent with expectations following earlier budget guidance. Certain categories of law enforcement personnel may be eligible for higher raises tied to military increases, though agencies and the Office of Personnel Management will determine eligibility in consultation with stakeholders.
All of us here at The DailyFed wish our hard-working civil servants in the federal workforce a very restful, extended holiday well-spent with loved ones.
