The Biden White House has not recommended what would be a needed fundamental change to take occupational differences as well as geographic differences into account in the raise-setting process. Image: Linus B/Shutterstock.com
By: FEDweek StaffSenior Biden administration officials, acting in their capacity as the President’s Pay Agent, have repeated often-raised criticisms of the process the government uses for setting federal employee raises based on comparisons with private sector jobs.
The Pay Agent—the heads of Labor, OMB and OPM—said in its latest report on pay that “as has been noted in earlier Pay Agent reports and discussed in other venues, we believe there is a need to consider major legislative reforms of the white-collar federal pay system” in place since enactment of a 1992 law.
That law created a formula of across the board raises plus locality pay designed to bring federal salaries within 5 percent of the private sector average by geographic area. But that formula “has not been followed since January 1994 because of budgetary and methodological concerns,” it said.
The budget issue, it said, is that closing the indicated pay gaps according to that formula would cost and additional $19.2 billion just in the first year. “However, it is also important to emphasize that the underlying methodology for locality pay of relying on one singular locality rate covering a locality pay area has lacked credibility since the beginning of locality pay in 1994 to such a degree that the statutory formula for closing pay gaps has been overridden either by Congress or by successive Presidents each and every year since that first year.”
That “ignores the fact that non-federal pay in a local labor market may be very different between different occupational groups. As currently applied, locality payments in a local labor market may leave some mission-critical occupations significantly underpaid while overpaying others.”
In its first two years in office, the Biden White House has not recommended what would be a needed fundamental change to take occupational differences as well as geographic differences into account in the raise-setting process.
Instead, it has followed the practice of its predecessors by urging agencies to use various pay-setting flexibilities and incentive payments for occupations—such as IT and health care—where the government has the most trouble recruiting and retaining employees.
The next major opportunity for the White House to recommend a major overhaul would be in the fiscal 2024 budget proposal that is to be sent to Congress in several months.
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See also,
The Process of Retiring: Last-Minute Changes
The Process of Retiring: Check Your Agency’s Work
FERS Retirement Planning Bundle: 2022 FERS Guide & TSP Handbook
