President Obama has issued a decision boosting the average federal pay raise in January to 2.1 percent from the 1.6 percent that had been in progress all year—and that he had set in a similar decision just a week ago. He cited as the reason the desire to achieve parity with the raise for military personnel, which was set at 2.1 percent under the defense authorization bill that emerged from a House-Senate conference recently–conferees were debating between 1.6 and 2.1 percent for the military–and that now has been passed by both the House and Senate.
The federal raise is being paid by default because Congress has not legislated a specific figure. The President’s new action reaffirms that 1 percentage point of the raise will be paid across the board, but the locality component being paid in addition will be equal to 1.1 percentage point of the payroll, rather than 0.6 of a percentage point. A 1.6 percent raise would have produced raises ranging by GS locality from 1.34 percent in the “rest of the U.S.” to 2.02 percent in the Washington-Baltimore area. Adding another half percentage point will result in raises ranging from about 1.8 to 2.5 percent, but exact figures will now have to be recalculated.
Exact rates presumably will be announced soon, possibly with another order still to come that will set detailed pay tables. The raise is effective with the first full pay period of the new year. Raises for wage grade employees are supposed to be set by a separate locality pay system but in practice for many years their raises have been capped at the amount going to GS employees in the same area. The increase also will boost executive schedule rates. One of those rates acts as the pay caps for the SES and other career employees at senior levels—who do not receive automatic annual raises but rather performance-based increases–and another, lower, rate acts as the cap for GS employees, hitting in the upper levels of grade 15 in some localities.