President Biden has signed an executive order providing federal civilian personnel an average pay raise of 4.6 percent in January. That includes an across-the-board boost of 4.1 percent and an average 0.5 percentage point locality pay adjustment.
This pay increase will help close the gap in pay between federal and private sector workers, which has been rising for years. It also will help attract and retain the best federal employees to serve America.
What is a pay raise?
A pay raise is an increase in pay that federal employees receive each year. It’s a way for agencies to keep their workers competitive with private-sector employees and attract new hires.
The President typically provides a pay increase for the civilian workforce by December of each year. This year, President Biden announced an average 4.6% pay raise for federal employees in an alternative pay plan letter issued on August 29th of this year.
This is a larger pay raise than the 2.7% that feds received last year. But it isn’t as much as some federal employee groups have hoped for.
The pay raise is split between an across-the-board increase in basic pay and a locality pay adjustment, a figure that depends on where an employee works. The locality pay adjustment factors are based on information from the United States Bureau of Labor Statistics Annual National Compensation Survey. The resulting adjustments vary from city to city, and they are calculated annually by the Office of Personnel Management (OPM).
How much is a pay raise?
For most civilian federal employees, a pay raise consists of an across-the-board increase in basic pay and a locality pay boost. The average total raise for General Schedule (GS) workers will be 4.6% in 2023, President Biden announced late last month.
But, even with a pay raise, federal employees still earn a lot less than their private-sector counterparts. According to the latest Labor Department statistics, base salaries for federal workers are 52 percent lower than comparable jobs in the private sector.
However, locality payments, which vary by location, have helped shrink the gap somewhat in recent years. But, they don’t go far enough to close the 22.5 percent wage gap that has plagued many federal agencies for decades.
For this reason, federal employee unions have long sought a larger average pay increase for 2023. But Congress has remained quiet on this issue. It didn’t endorse Biden’s pay raise proposal in the omnibus spending bill for fiscal 2023, and it has yet to act on an alternative measure proposed by Rep. Gerry Connolly, D-VA.
What happens if I don’t get a pay raise?
If you don’t get a pay raise, you can still receive other compensation like retirement and disability benefits, which are usually linked to your job. Also, you can apply for promotions within your agency.
You may receive a retention allowance if you have unusually high or unique qualifications or your agency has a special need for your skills and experiences. These are paid in addition to your base pay and can be up to 25 percent of your basic pay.
Your salary may also include Locality Pay – the amount that is set for each specific federal locality that you work in. These pay adjustments are based on the cost of living in your area.
General Schedule (GS) employees receive an annual pay raise that is part across-the-board and part locality. These raises are implemented by the Office of Personnel Management (OPM).
What happens if I get a pay raise?
If you work in the civilian Federal government, you may be eligible to receive a pay raise. The pay rate for General Schedule employees is typically adjusted each January based on nationwide changes in private-sector wages and salaries.
The GS pay scale covers civilian white-collar positions in professional, technical, and administrative jobs. The pay rates for GS employees are set by the Office of Personnel Management (OPM).
Most GS employees also receive locality pay, which is a geographic-based percentage rate that reflects the salaries and pay levels of non-Federal workers in certain areas. This was the first step in making GS pay more competitive with the private sector.
The White House announced that General Schedule employees will get an across-the-board pay increase of 4.1% in 2023, plus a 0.5% locality pay adjustment. This totals to an average 4.6% pay increase, according to OPM.