How Much Will Your Pay Increase in 2016?

President Obama has proposed a 1.3% pay raise for federal employees to become effective in January 2016. Will this be the actual figure?

The 1.3% raise is becoming increasingly likely.

The method for determining the amount of any pay raise for the federal workforce is confusing, subject to political intrigue, can be altered by different segments of our government and, of course, subject to the politics during election cycles. But, for the last two years, the amount of the pay raise proposed by the president is the amount that has ultimately gone into effect. In both 2014 and 2015, the annual pay raise was an across-the-board 1% pay increase.

If Congress does not approve a different figure, as happened in the past two years, the 1.3% proposed earlier this year will become a reality.

Congress could approve a different amount for 2016.  The current version of the fiscal 2016 Financial Services and General Government bill in the House of Representatives is silent on a pay raise for federal employees in 2016. While it does not include appropriations for a 2016 raise, it also does not include language that would prohibit the raise. So far in 2016, this is similar to the scenario that has played out in the past two years which resulted in a 1% pay raise for most of the federal workforce when the president’s recommendation was ultimately implemented.

A president can (and usually does) wait until the end of August to formally announce the pay raise proposal for federal employees. In 2015, the president’s plan was announced at the end of August (See Obama Calls on Feds to Do Their “Fair Share” With 1% Pay Raise for 2015). At that time, President Obama issued a letter stating that 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 adjustments “that would otherwise take effect” that was referenced would have been a raise under the Federal Employees Pay Comparability Act (FEPCA). That Act would raise federal pay by a greater amount but presidents have generally intervened with a different recommendation, and there is no indication 2016 will be any different.

Raise for Military Personnel

The House of Representatives passed the Defense Appropriations bill this week that includes a 2.3 percent pay raise for troops in 2016. As noted in the bill, “The Committee recommendation provides funding to increase basic pay for all military personnel by 2.3 percent, as authorized by current law, effective January 1, 2016.”

The 2.3% increase in military pay is not necessarily the final amount of any pay raise for military personnel in 2016. The Senate fiscal 2016 Defense spending bill provides for the same 1.3 percent raise for troops as President Obama has proposed for federal civilian employees.

“We cannot risk having an underfunded military during these uncertain times, and our troops deserve unfailing support as they lay their lives on the line,” Rep. Hal Rogers, R-Ky., chairman of the House Appropriations Committee, wrote in a press release on his website.

Raise for Federal Retirees

In anticipation of a question that always arises when writing on this subject, the annual pay raise would not be applicable to federal retirees. Federal retirees may receive an annual cost of living adjustment (COLA) which may be more or less than the raise given to federal employees. In 2015, this amounted to a retiree increase of about 1.7% for many federal retirees. (See COLA Announced for 2015: It’s 1.7%) Early indications are that there may not be a COLA increase next year but the final figures for this will not be available until mid-October.

© 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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