This amendment adds a one-time cash payment called a 'longevity bonus' for certain retired state workers and their beneficiaries, calculated based on how many years they worked.
Alabama2026Enacted
SB154
State Employee Pay Raise and Retiree Bonus for Fiscal Year Beginning October 1, 2026
Last scannedAug 24, 2026, 9:06 AM
In one sentence
This law gives eligible state workers a 2% pay raise starting in October 2026 and provides a one-time bonus to certain retirees based on their years of service.
What it does
- Gives eligible state employees a two percent salary increase beginning with the first payday on or after October 1, 2026.
- Provides a one-time lump-sum longevity bonus equal to $1 per month for each year of service to qualifying retirees and beneficiaries.
- Requires specific department directors to update pay schedules and send them to the State Comptroller so payments can be issued.
- Allows certain local employers, such as cities or counties, to choose whether they will fund this bonus for their own retired workers by passing an official resolution.
- States that money needed for these changes must come from annual budget acts rather than creating new immediate funding.
Who it affects
- State employees in classified and unclassified services, including judicial and legislative staff.
- Employees of county health departments whose pay is funded by the state under State Board of Health direction.
- Retirees who left work before October 1, 2025, and are receiving monthly benefits from the Employees' Retirement System on September 30, 2026.
- Beneficiaries of deceased members or retirees who meet specific retirement date requirements.
Limits and unknowns
- This law does not apply to employees whose pay is covered by a labor agreement or contract.
- Local salary supplements paid to judges are excluded from the two percent increase.
- Retirees who receive Medicaid benefits may lose eligibility for those benefits if they take this bonus.
Plain language
Terms to know
- Cost-of-living increase
- A raise in salary intended to help workers keep up with rising prices for goods and services.
- Longevity bonus
- A one-time payment given to retirees based on the number of years they worked before retiring, calculated as $1 per month for each year of service.
- Employees' Retirement System
- The state organization that manages retirement benefits and monthly allowances for eligible workers.
Official record
Sources
Official summary
This act: (1) provides a 2 percent cost-of-living increase for state employees beginning with the first pay day on or after October 1, 2026; and (2) provides a one-time lump-sum longevity bonus to certain retirees and beneficiaries of the Employees' Retirement System in the amount of $1 per month for each year of service.
Official activity
Bill history
- EnactedSenate
- Albritton Motion to Concur In and Adopt House Amendment - Adopted Roll Call 1227 (Yeas 23, Nays 0)Senate
- Delivered to GovernorSenate
- Signature RequestedHouse
- EnrolledSenate
- Ready to EnrollSenate
- Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 1144 (Yeas 97, Nays 0)House
- Motion to Adopt - Adopted Roll Call 1143 (Yeas 101, Nays 0)House
- Third Reading in Second House (Yeas 102, Nays 0)House
- Givens 1st Amendment OfferedHouse
- Read for the Second Time and placed on the CalendarHouse
- Reported Out of Committee Second HouseHouse
- Pending Committee Action in Second HouseHouse
- Read for the first time and referred to the House Committee on Ways and Means General FundHouse
- Motion to Read a Third Time and Pass - Adopted Roll Call 830 (Yeas 35, Nays 0)Senate
- Third Reading in House of Origin (Yeas 35, Nays 0)Senate
- Read for the Second Time and placed on the CalendarSenate
- Reported Out of Committee House of OriginSenate
- Pending Committee Action in House of OriginSenate
- Read for the first time and referred to the Senate Committee on Finance and Taxation General FundSenate
Changes
Amendments
1 stored