Spending Bill Deal Seals 2016 Federal Pay Raise

By on December 16, 2015 in Pay & Benefits with 750 Comments

Image of road sign with words 'pay raise just ahead'

On Tuesday night, Congressional leaders reached agreement on a year-end spending and tax bill. The bill will prevent a government shutdown. It also has an impact on federal employee pay raises next year (2016).

The legislation is expected to pass in Congress by the end of this week.  Congress passed a bill funding the government for five days last week. The current temporary spending bill expires on Wednesday. Presumably, another short term spending bill will quickly pass that will give Congress until December 22nd to clear the year-end spending bill upon which agreement appears to have been reached.

The obvious question is, “What does the budget deal have to do with next year’s pay raise for federal employees?”

Here is what it means.

The budget deal does not address next year’s pay raise for federal employees. Since Congress has not taken action on the federal employee pay raise, by default, there will be an average 1.3% raise for federal employees in 2016. President Obama had issued a letter on August 28, 2015 directing a 1% pay raise with an additional amount for locality pay. That amounted to what will be an average of 1.3% for federal employees.

Congress could have taken action on the pay raise. It did not do so in the budget agreement. This is the third year in a row in which this scenario has played out. In effect, Congress deferred to the president of determining what the federal pay raise will be in 2016.

The pay increase will be effective with the first full pay period of the new year. That means, for most federal employees, that starting January 10th, there will be a 1% increase for General Schedule workers. The additional 0.3 percentage will be allotted to locality pay. The actual amount will vary among different pay localities.

Check out our GS Pay Calculator to see what your annual salary will be next year for your grade, step and locality.

13 new locality pay areas have been created in 2016. Some other federal employees are also being moved into locality pay areas that already existed. These other employees are being moved from the “Rest of the U.S.” category which is at least a little bit lower on the pay scale than the locality pay areas.

President Obama is expected to issue an executive order for the 2016 pay raise. At that time, the official pay raise figures for 2016 will also be available. We will provide additional information on the finalized pay figures when they become available.

© 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.