Who Does Not Receive the Annual General Pay Increase?

By on March 10, 2015 in Current Events, Pay & Benefits with 9 Comments

A FedSmith reader recently asked some interesting questions regarding the annual general increase in Federal pay.  Responding to these questions provides a good opportunity to explore the basis on which alternate annual general increases are made, and to explore who does and who does not get these increases.

Executive Order 13686, signed by the President on 19 December 2014, provides across the board increases for many groups of Federal employees.  The largest of these groups are those covered by certain statutory pay systems like those paid under the General Schedule, Foreign Service Schedule (for Department of State employees), Special Rate Schedules for Law Enforcement Officers, Veterans Health Administration at the Department of Veterans Affairs, and under the Senior Executive Service.

The President’s authority to implement these alternate annual general increases derives from Federal Statutes.  The statutory provisions provide for alternate adjustments, such as the 1 percent provided this year, when a national emergency or serious economic conditions affecting the general welfare exist.

The provision most often cited in the past for providing an alternate annual general increase is serious economic conditions that make it unfeasible to implement the increase derived from the regular statutory process.  The authority, therefore, for proposing annual adjustments and for proposing alternates to these annual adjustments is derived from Federal Statute.

Now let’s look at the first issue raised by the reader who submitted the questions: are federal agencies required to give employees the annual general increase?  Generally, the answer to that question is that most covered employees will get the annual general increase.  This is required not only by the Order itself, but by the regulations that tell agencies they must set the General Schedule employee’s pay at the new rate of the adjusted schedule corresponding to the employee’s grade and step.

There are, however, some exceptions to this general rule.  The guidance issued by the U.S. Office of Personnel Management that accompanied the Order identifies one exception.  It applies to the Vice President and certain senior political employees being paid under the Executive Schedule and others whose pay is set in line with the Executive Schedule.  This exception is based not on the Executive Order, but on legislation passed by Congress: the Consolidated and Further Continuing Appropriations Act of 2015.  The regulations also establish at least two exceptions under which some employees may not get the full annual general increase.  The exceptions pertain to those who are on retained pay, and those who continue to be identified as GM employees.  There are separate procedures in the regulation to guide agencies in adjusting the basic pay for these two groups of employees that may result in receiving less than the full annual general increase.

There are a few more exceptions to receipt of the annual general increase for agencies not bound by the Title 5 provisions.  For example, the FAA provides the annual general increase to some of its employees only when performance ratings are at least at the satisfactory or equivalent level; and the Federal banking agencies typically provide salary adjustments based employees’ performance ratings.  A few other Federal organizations provide annual increases as a result of the terms of negotiated agreements.   In summary, the answer to the reader’s question is that most agencies are required to provide the annual general increase to covered employees, but there are some exceptions.

The next question asked by the reader: are any federal agencies not paying employees the annual general increase in 2015 or previous year(s)?

Based on the regulations, the Order and past practice it is unlikely that an agency would not provide the mandated annual general increase to its employees unless it was covered by the exceptions in the Executive Order or the regulations that were mentioned in the preceding paragraphs.  To date no agency-wide non-payments have been noted in the media.

Finally the reader asked: what if a Federal agency does not give its employees the annual general increase? 

Because it seems unlikely that a covered agency would not provide the annual general increase to its employees, let me respond by saying: if an employee believes that she or he has not received compensation due under law or regulation, I always recommend that the employee informally raise the issue with the supervisor and with the agency’s human resources and payroll staffs to determine whether or not an error has occurred.  If an employee is not satisfied with the response, she or he may utilize the formal procedure for settling pay claims against the Government.  This procedure is described in Part 178 of Title 5, Code of Federal Regulations.

I hope this material answers the questions our reader recently asked about the annual general increase in Federal pay.  Responding to these questions gave me the opportunity to explore the basis on which alternate annual general increases are made, and to explore who gets these increases and who does not get them.

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’s career at various Federal agencies spanned about 32 years.  Since his retirement he has consulted on, written about, and provided training on overtime and premium pay, on the principles of FLSA coverage and exemption, and on related federal compensation issues.  He can be reached at wayneslyhouse@comcast.net.

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