When Do Wage Grade Employees Get A Pay Increase?

By on July 13, 2014 in Current Events, Pay & Benefits with 0 Comments

Many prevailing rate employees working under the WG or associated prevailing rate pay schedules have asked when pay increases will be effective in 2014. Will it be effective on 1 January 2014 or will it be effective on another date? This article explores how the Wage Grade (WG) pay system is designed to work, and what is actually happening in this era of pay freezes and limited pay increases.

How It’s Designed to Work

The existing statute provides that pay rates for prevailing rate or WG employees are to be maintained in line with prevailing pay levels for comparable levels of work in the private sector within a local wage area.[1] This is accomplished through conducting annual wage surveys to collect wage data from private sector establishments in the local wage area. The lead agency in each wage area is responsible for performing the annual survey, for crunching the data, for developing the new pay table, for distributing the revised table to Federal agencies with covered employees in the wage area, and for establishing the effective date for the revised pay table.[2] By law, the effective date of a revised WG pay table is 45 days after the date that the wage survey is ordered to be made.[3]

For General Schedule (GS) employees, revised pay charts become effective across the United States on the same day. Usually this date is the beginning of the first pay period that begins on or after 1 January. As a result of the salary survey process and because not all local wage surveys are carried out at the same time, local wage area pay charts for WG employees are not effective on the same day. Thus, pay adjustments based on revised local wage area pay charts occur throughout the year as the wage surveys are completed and the revised charts are established. However, the revised wage chart for a particular wage area is effective on or about the same date each year.

How It’s Worked Recently

As a result of various pieces of legislation passed by Congress and signed by the President during the last several years, Federal civilian employees have not received annual adjustments as the result of revised pay charts because the pay rates have been frozen during 2011, 2012 and 2013. This freeze applied both to WG and to GS employees. Although a new pay chart was issued for every local wage area for each of these years, the rates did not change because of the freeze, and WG employees have not received annual adjustments during these years.

The Consolidated Appropriations Act of 2014, which establishes budgets for most Federal organizations, provides an across the board adjustment of 1 percent for most civilian employees. Effective in January 2014, all GS employees received this annual adjustment. While the Act provides the same increase for most WG employees, the timing of these increases varies. Each wage area will see the 1 percent increase in pay effective at about the same time that the revised wage chart has gone into effect in that wage area in past years. For example, in the Norfolk VA wage area the annual wage adjustment typically goes into effect during the first half of July. This year, the effective date for the 1 percent increase mandated by Congress goes into effect on 13 July 2014. This means that for some wage areas, the 1 percent increase already is effective, while in others the effective date will occur between now and the end of the calendar year. These effective dates should be the same as or very close to the dates on which annual wage adjustments have been effective in past years.

In summary, the answer to the question from WG employees about when their pay increase will occur is that the date will vary depending on the wage area in which they work. Some wage areas should have had the 1 percent annual wage adjustment already; the increase in the Norfolk wage area is effective on 13 July; and for those wage areas where the increase is not yet in force, the effective dates will occur between now and the end of the calendar at about the same time that they have occurred in past years.[4]

What Will the Future Bring?

The good news for WG employees, the lead agencies have continued the wage survey process even though the data was not used to adjust wage schedules since 2010. That means that once there is a return to the statutory wage fixing process, the data is ready and available to bring local wage schedules in line with prevailing pay levels for comparable work in the private sector within a local wage area. And because this data is available and current, the adjusted wage schedules should go into effect on or close to the date that wage adjustments have been made in each wage area in the past. The return to the statutorily designed wage fixing process, of course, is dependent on Congress passing authorizing legislation.

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[1] See a history of the Federal Wage System at the Defense Civilian Personnel Advisory Service (DCPAS) website: http://www.cpms.osd.mil/Subpage/Wage/HistoryOfWage/.

[2] The wage areas are defined in appendices C and D to Subpart B of Part 532 of Title 5 of the Code of Federal Regulations. Department of Defense (DOD) is the lead agency in many local wage areas. The requirements for the survey are established at Title 5 United States Code (U.S.C.), Section 5343.

[3] See 5 U.S.C. § 5344.

[4] Current/past wage charts are on the DCPAS website at: http://www.cpms.osd.mil/Subpage/AFWageSchedules/.

Wayne Coleman is a federal pay expert available to help your agency avoid premium pay claims through on-site training. Contact him for more information.

© 2016 Wayne Coleman. All rights reserved. This article may not be reproduced without express written consent from Wayne Coleman.

About the Author

Wayne Coleman is a senior consultant who has written about and provided training on overtime and premium pay, on the principles of FLSA coverage and exemption, and on related federal compensation issues at many different Federal agencies for almost 40 years. He can be reached at wayneslyhouse@comcast.net.

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