In each year of the Biden administration, Congress has been silent on the raise, allowing Biden’s recommendations to take effect by default. It is on track to do the same this year for 2025. Image: Jason Raff/Shutterstock.com
By: FEDweek StaffAn early marker has been set for the January 2026 — not 2025 — federal employee raise, with an increase in the employment cost index of 3.8 percent over the 12 months ending in September, under a Labor Department calculation released at the Federal Salary Council meeting this week.
Under federal pay law, the ECI measure of growth in wages—not living costs—for the 12 months through each September is supposed to be used in setting the across the board portion of the proposed raise in the White House’s subsequent budget proposal for the next fiscal year. A half percentage point is to be shaved off the indicated amount and separate locality pay is supposed to be paid in addition, varying by locality.
That formula often has not been followed in practice, though. In some years the full or reduced ECI number alone has become the total raise, with locality pay sometimes carved out of it. That was the pattern of the first three years of raise set by the Biden administration, in which the White House proposed the ECI figure for the total raise with a locality raise carve-out, yielding raises ranging from a few tenths of a percentage point above the average to a few tenths below.
However, in other years the ECI number has played little to no role in a determination of a raise. That was the case earlier this year when Biden recommended a 2 percent raise for January 2025, even though the ECI figure was 4.5 percent.
In each year of the Biden administration, Congress has been silent on the raise, allowing Biden’s recommendations to take effect by default. It is on track to do the same this year for 2025.
The recommendation for 2026 will be in the hands of the incoming Trump administration.
In September, President Biden reaffirmed his intent for a 2 percent federal employee pay raise in January 2025, while also saying he would split the raise, with 1.7 percent paid across the board and the funds for the other 0.3 percentage points used for variable locality pay.
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