President Obama has signed off on legislation that extends the federal pay freeze through the rest of 2013. The legislation also approves government funding through September 30, 2013.
In addition to extending the the current pay freeze for federal employees, it also contains a freeze on Congressional salaries for a third consecutive year. The legislation also redefines the outline of sequestration. While the process is not the traditional government appropriations process, it is the closest approximation of a real budget that Congress will have produced for the current fiscal year that is now almost six months old. The Senate has not passed a budget for the past several years.
As we noted in an earlier article, the legislation recently passed by Congress overturns an executive order issued by the president late last year that ended the pay freeze on the workforce by giving a 0.5% pay increase to the federal workforce beginning in late March. The signing of the bill, as expected, extends the pay freeze for at least another few months.
The pay freeze applies to the annual raise that would normally be given to most federal workers. An annual pay raise was last approved in 2010. Despite the freeze on the annual pay, however, employees are still eligible to receive within-grade increases. While the new law does not prohibit bonuses or awards, the Office of Management and Budget has directed agencies to refrain from handing out bonuses and other awards while the sequestration is still in effect.