Another Step Toward a 1.6% Raise in 2017

By on June 19, 2016 in Pay & Benefits with 73 Comments

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

In what may seem like a long time ago (May 25th), we reported that another step had been taken in the approval of a 1.6% pay raise for federal employees in January 2017 (See 1.6% Pay Raise for 2017 Advancing in Congress).  At that time, the House of Representatives approved annual funding for the Treasury Department, the Judiciary, the Small Business Administration, the Securities and Exchange Commission, and other related agencies.

Those who pay attention to the annual political dance necessary for implementing the federal pay raise know that there are many steps in the process. The process can result in changing the recommended amount (either in form of a higher raise or even no raise at all) at any step along the way.

It is now the Senate’s turn at this stage of the budget process. As the House did several weeks ago, the Senate Appropriations Committee has now approved the fiscal year 2017 Financial Services and General Government Appropriations Bill. And, following the approach by the House, the approved bill does not mention a federal employee pay raise.

In practice, this means that Congress has not altered the President’s recommendation of a 1.6% federal pay raise for federal employees in 2017.

If Congress does not enact legislation to alter the president’s 1.6% recommendation, the 1.6% will carry the day. But, not surprisingly, it is not that simple as a second message to Congress will still be required by the end of August to confirm the amount of the raise.

In 2015, President Obama issued a letter on August 28, 2015 directing a 1% pay raise with an additional amount for locality pay. That amounted to an average of 1.3% for federal employees. The timing of his letter for a 2017 raise will most likely be issued at about the same time again this year.

What About Locality Pay?

We do not know if the recommendation of 1.6% will include locality pay raises. Last year, the recommendation was for an across-the-board raise of 1% but, with locality pay added, actual raises averaged about 1.3%. Some locality areas received larger amounts and others less than the 1.3%. (Check out the GS pay calculator for salaries at all grades and steps for all locality areas and the “rest of the U.S.” )

Federal employees have not fared well as far as annual pay raises go during the last eight years. There was a 1.3% pay raise in 2016 when locality pay was figured in and 13 new locality pay areas were also created. A raise of 1.6% would be the largest raise since 2010 when there was a raise of 2%.

There was also a pay freeze on annual federal employee raises for several years. Average federal salaries still increased though with within-grade increases, promotions, or reclassification actions still being processed despite the lack of an annual pay raise. The last year a federal pay raise topped 4% was under the Bush administration in 2004.

For a longer term perspective on federal pay raises, check out Federal Pay Raises Through the Years.

© 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.