Obama Calls on Feds to Do Their ‘Fair Share’ With 1% Pay Raise for 2015

By on August 30, 2014 in Pay & Benefits with 255 Comments

President Obama says in a new letter that “Civilian Federal employees have already made significant sacrifices as a result of a three-year pay freeze that ended in January 2014 with the implementation of a 1.0 percent pay increase…” But he also noted that “as the country’s economic recovery continues, we must maintain efforts to keep our Nation on a sustainable fiscal course. This is an effort that continues to require tough choices and each of us to do our fair share.” (President’s letter is reprinted in full at the end of this article.)

In this case, the “fair share” of the sacrifice for federal employees has been determined to be an across the board pay raise of 1% for 2015. The president notes that “This decision will not materially affect our ability to attract and retain a well-qualified Federal workforce.” In January 2014, federal employees received their first across-the-board pay raise in three years. The pay freeze on across-the-board pay raises ended with a one percent increase that Obama implemented late in December 2013. (See Pay Freeze Ends: Federal Employees to Get 1% Raise in 2014)

Obama said he was able to hike pay through a law authorizing him to increase wages because of “national emergency or serious economic conditions affecting the general welfare.” He went on to note that “I view the adjustments that would otherwise take effect as inappropriate.”

The pay raise will also apply to military workers, the president said in a separate letter to Speaker John Bohner (R-Ohio).

The president’s letter states that “across-the-board pay increases will be 1.0 percent, and the current locality pay percentages shown in Schedule 9 of Executive Order 13655 of December 23, 2013, will remain at their 2014 levels.”

Earlier this year, legislation was introduced to provide federal employees with a pay raise of 3.3%.  (See Bill Would Give Federal Employees a 3.3% Raise) Very few people thought that this bill had a serious chance of implementation and it did not pass in Congress. In May, a Senator from Hawaii also proposed a 3.3% pay raise but did so without issuing a press release or a statement in support of the proposal—an indication that this is an election year and the bill was good politics and playing to the economic interests of a large voting bloc.

Federal pay rates automatically rise each year by a certain percentage under a formula established by the Federal Employees Pay Comparability Act, unless Congress or the president take action to implement an alternative plan. The deadline for the White House to propose a different rate increase is August 31 which is apparently why his letter this year was sent out just before the weekend of August 31.

In some years, appropriations bills in Congress have precluded the president from granting federal workers a pay increase and effectively freezing federal employee salaries. This is an election year and Congress will apparently leave the decision on a pay raise up to President Obama—just as was done in 2014—although Congress could still take action if it decides to do so.

To see the impact of a 1% pay raise  on your salary next year, check out FedSmith’s GS pay calculator. For those who enjoy engaging in wishful thinking, you can also see what your income might have been if an across-the-board increase of 3% (or more) would have provided in your paycheck.

Below is a copy of the president’s letter on the 2015 pay raise for the federal workforce.

__________________

 THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release August 29, 2014

TEXT OF A LETTER FROM THE PRESIDENT

TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES

AND THE PRESIDENT OF THE SENATE

August 29, 2014

Dear Mr. Speaker: (Dear Mr. President:)

I am transmitting an alternative plan for pay increases for civilian Federal employees covered by the General Schedule (GS) and certain other pay systems in January 2015.

Title 5, United States Code, authorizes me to implement alternative pay plans for pay increases for civilian Federal employees covered by the General Schedule and certain other pay systems if, because of “national emergency or serious economic conditions affecting the general welfare,” I view the adjustments that would otherwise take effect as inappropriate.

Civilian Federal employees have already made significant sacrifices as a result of a three-year pay freeze that ended in January 2014 with the implementation of a 1.0 percent pay increase — an amount lower than the private sector pay increases and statutory formula for adjustments to the base General Schedule. However, as the country’s economic recovery continues, we must maintain efforts to keep our Nation on a sustainable fiscal course. This is an effort that continues to require tough choices and each of us to do our fair share.

Accordingly, I have determined that it is appropriate to exercise my statutory alternative plan authority under 5 U.S.C. 5303(b) and 5304a to set alternative January 2015 across-the-board and locality pay adjustments. Specifically, I have determined that for 2015, across-the-board pay increases will be 1.0 percent, and the current locality pay percentages shown in Schedule 9 of Executive Order 13655 of December 23, 2013, will remain at their 2014 levels. This decision will not materially affect our ability to attract and retain a well-qualified Federal workforce.

The adjustments described above shall take effect on the first applicable pay period beginning on or after January 1, 2015.

Sincerely,
BARACK OBAMA

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

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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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