Pay Freeze Likely to be Ending in January

By on December 16, 2013 in Current Events, Pay & Benefits with 120 Comments

Federal employees last received an overall pay increase in 2010.  Add to that the furloughs that have impacted the pay of many federal employees and there are a lot of people working for Uncle Sam who are not happy with their pay situation.

While the pay freeze has been in effect for several years, the freeze was not a total one as federal employees have been eligible to receive within-grade increases or promotions and, in fact, there has been an increase in the annual federal employee salary despite the pay freeze. (See Average Federal Salary Goes Up Despite Pay Freeze and President Obama Proposes Freeze on Federal Civilian Employee Pay))

With this background, will federal employees get a raise in January? A 1% pay raise is now likely.

How Much Difference Does a Small or Large Percentage Make in Your Annual Salary?

To see the difference the pay raise may have on your paycheck, check out the General Schedule Pay Calculator which allows you to see an estimate what your pay is likely to be with a 1% pay raise for every grade and step and geographic location.  

We will be updating the pay calculator with any increase for 2014 when OPM issues the finalized pay figures. In the meantime, you can also see what your pay would have been had the pay raise come in at 2% (or more) for those who like to engage in a mental flight of fantasy. For example, using this pay calculator, if you enter a GS-12, Step 7 working in the Huntsville, Alabama area, a federal employee would now be making $81,584. With a 1% pay increase, this will increase to approximately $82,400. However, had the raise been 3%, the annual pay would be $84,032. Enter your geographic area, GS grade and step to see how much a difference a small (or even a larger percentage) would make in your pay.

The Long, Strange Road to a Pay Raise

President Obama proposed a 1% pay raise back in August. (See Obama Proposes Plan for 1% Pay Increase) The 1% raise he proposed at that time is that same amount requested in his fiscal 2014 budget proposal.

When the government shutdown ended, Congress did not include any language to deny the pay increase. (See Agreement to End Shutdown Allows for 1% Pay Raise)

The bipartisan budget agreement reached last week also could have derailed a pay raise for federal employees in 2014 but it did not do so. No doubt, there were a number of items in the budget agreement that federal employees, particularly future federal employees, may not like. The budget deal requires new federal workers and military retirees to contribute $12 billion in savings overall in order to partially repeal the sequester cuts that would have occurred in fiscal 2014 and 2015. The $12 billion is part of a proposed $63 billion in savings from other programs. (See Budget Agreement To Increase Pension Contributions for New Employees)

And, on another positive note for many readers, the agreement would allow the Office of Personnel Management to create a “self-plus-one option” in the Federal Employees Health Benefits Program. Many readers have commented that the existing system of requiring a couple to purchase a health benefits plan at the same rate as an entire family is not reasonable. Under the “self-plus-one option,” this would not be required.

In separate legislation, the House of Representatives also voted for the 2014 National Defense Authorization Act.  This legislation would effectively set a pay raise for military personnel in 2014 at 1 percent next year.

The Senate is scheduled to vote on the budget bill on Tuesday and it appears likely to pass.

The House has adjourned and not scheduled to return until 2014. So, if nothing happens to change the most likely scenario, a raise for federal employees will be effective on January 1st for General Schedule employees.

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources.

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