"How Come I Didn't Get the 3.5% Pay Raise I Was Supposed to Get!"
By Ralph Smith
Thursday, January 17, 2008
The 2008 federal pay raise has been approved and implemented and we have written numerous articles about the details of the raise.
Still, the e-mail and comments we get are still often asking questions about the pay raise.
Here is an answer to the most common question which is often written along these lines: "Federal employees were supposed to get a 3.5% pay raise in 2008. I did the math and your pay tables show me getting less than 3.5% this year. Why don't your pay tables show the full amount I am supposed to receive?"
Or, another version of the same question, "I keep reading that we are getting a 3.5% pay raise but my check is only going up 2.99% instead of 3.5%. If we are supposed to get 3.5%, why isn't that the base rate and locality pay just added to that amount so that everyone gets at least 3.5%?"
Here is a third version of the question. "Congress approved a 3.5% pay raise instead of the 3% that the President wanted us to get. But my check is less than a 3% raise! How can that be possible!!!!"
In effect, most people writing or commenting about the topic want to know why others are getting more money than they are getting.
3.5% is an Average--Not a Flat Rate
The 3.5% 2008 pay raise for federal employees is just an average. Federal employees in the Washington, DC area are getting 4.49% while those that fall outside of a locality pay area are in the "Rest of the U.S." and they are getting 2.99%. In short, the pay raise you see in your check may be more or less than 3.5% depending on your locality pay area.
Congress did approve a higher pay raise than recommended by the President. If the President's plan had been adopted, the average federal pay raise would have been 3% instead of an average of 3.5% because the locality pay area computations would have been different.
Your Base Pay Rate
Some readers have inquired about the base pay rate for 2008. They want to know why everyone didn't get a 3.5% pay raise (which they believe they are entitled to get) and locality pay added on top of that.
There is a base pay rate for 2008. But that base pay rate is not 3.5%. The general schedule pay increase for 2008 is 2.5%. Locality pay is added to that amount. The result is a nationwide average of 3.5% for 2008.
The second question that is often asked in different ways is about locality pay areas. This question is usually written along these lines: "My cost of living went up more than the amount of my pay raise this year. Federal employees in the DC area are already averaging more than $90,000 per year in their checks and their pay went up more than any other federal employees. Why is that fair?"
Or, a second version of the same question: "If federal employees in Washington are already making more than $90,000 per person on average, why did their paychecks go up so much more than those in other parts of the country? Is this because the people making the decisions on our pay are all in the Washington area?"
Locality Pay
I am not going to make the mistake of telling readers that I understand the details of the locality pay system. Click here to see a list of the locality pay areas. Here is OPM's explanation of how the locality pay adjustments are determined.
There are disparities between different areas. The locality pay system was set up to try and make federal pay more accurately reflect the differences in salaries in different geographic areas. The system has resulted in federal employees in some areas making more money than in other areas. Whether that is a more fair system probably depends on if you are making more or less money. The locality pay system is not just a cost of living adjustment as it is for retired federal employees and it takes in a variety of factors.
Salaries in Washington, DC are often higher than in the rest of the country for federal employees. The grade structure is often higher than the grade structure in field offices. Having worked in Washington and also outside the beltway, there were certainly times when I felt many of the positions in Washington were unnecessary and vastly overrated. When I worked in Washington, I sometimes felt like those of us working there knew more about more narrow subjects than people in the field who often dealt with a broader range of issues.
You can reach your own conclusions about the fairness of the system. It is very complex; probably very few people have an in-depth understanding of how it works.
To see how much your check will be this year, check out the pay tables. To see how much of an increase federal employees are getting in different localities, check out the chart at the end of this article. Feel free to offer your opinion on the federal pay system in our comments section but don't expect it to change anytime soon.
© 2008 FedSmith Inc. All rights reserved. This article may not be reproduced without express written consent of FedSmith Inc.
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