President Trump has signed an executive order for a 2018 pay raise, showing that the average 1.9 percent raise that had been in progress all year will result in GS increases ranging by locality from 1.67 percent to 2.29 percent.
The lower figure will apply to the largest number of employees, those in the “rest of the U.S.” locality apart from city areas with their own locality rates. The highest will be Washington-Baltimore, with the San Francisco area close behind at 2.21 percent. Raises are to be paid effective with the first full biweekly period of the new year, which starts January 7 in most cases.
That’s the result of parceling out the default 1.9 percent raise as earlier indicated–1.4 percent across the board and the funds for the rest as locality pay. A default raise is paid when Congress does not enact a figure, a pattern that has repeated itself for five straight years.
Wage grade employees will receive the same increase as GS employees locally, up to a cap of 2.13 percent; they are paid at differing times of the year depending on location. The order also sets a 2.4 percent raise for members of the uniformed services, as called for the 2018 defense-spending bill; calls for parity with that larger raise didn’t get anywhere.
The GS pay cap will increase from $161,900 to $164,200 and the SES cap from $187,000 to $189,600.
2019 Pay Raise in Doubt, Performance-Pay on the Table
Meanwhile, prospects for a raise the following January seem increasingly unlikely, with wider action on pay possible next year.
Senate Democrats have cited budget planning documents indicating the White House will seek to freeze federal pay rates in its budget proposal for fiscal year 2019 that is to be sent to Congress in February, and the latest annual locality pay report hints at another attempt at establishing performance pay features.
The report from the President’s Pay Agent, the Secretary of Labor and the Directors of OMB and OPM and with input from the Federal Salary Council, argues that federal employee pay is overly generous because comparisons with non-federal pay, which are used to set rates, fail to account for the value of employee benefits.
That value is “completely excluded from the pay comparisons, which take into account only wages and salaries. Also, the comparisons of federal vs. non-federal wages and salaries fail to reflect the reality of labor market shortages and excesses,” the report states.
The report also foreshadows another go at pay-for-performance: “We believe it is imperative to develop performance-sensitive compensation systems that will contribute to a government that is more citizen-centered, results-oriented, and market-based,” further arguing that federal agencies need greater autonomy to manage, develop and reward employees.
The locality pay report agrees with a proposal from the Salary Council to create two new localities, in Birmingham, Ala., and San Antonio, Texas, areas. However, rule-making will be required and those localities will be effective no sooner than 2019.