Fedweek

An early marker has been set for the January 2023 (not 2022) federal employee pay raise, as the Labor Department has reported the employment cost index measure used under federal pay law.

Under federal pay law, the ECI figure—a 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 in the White House’s subsequent budget proposal for the next fiscal year. That proposal typically is made in early February for decisions including the raise for the following January.

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A half percentage point is to be shaved off the indicated amount and locality pay is supposed to be paid in addition, varying by locality. The unreduced figure for the measuring period toward January 2023 was 4.6 percent.

That formula has not been followed in practice, though, due to the potential cost of the indicated locality raises and disagreements over the calculations underlying those figures. In some years the ECI number has played little to no role in a determination of a raise while in others the full or reduced ECI number alone has become the total raise, with locality pay sometimes carved out of it.

For 2022, the comparable figure was 2.7 percent, which is the amount that President Biden recommended and which is on track to be paid by default since Congress has effectively accepted that figure so far by remaining silent on the issue.

A raise of 4.6 percent would be the largest since the same amount—split as 3.6 percent across the board and 1 percent as locality pay—was paid in 2002.

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