2008 Pay Raise Approved and Implemented: Median DC Federal Salary for 2008 Will Be $90,698.

It is hard to believe but the annual federal pay raise has been approved and OPM has issued various documents implementing the 2008 pay rates for federal employees. The median salary for federal employees in the DC area in 2008: $90,698.

What a long strange trip it’s been. Here is the answer that has been worked out by Congress, the President, and implemented by the Office of Personnel Management. The average federal pay increase for federal employees on the general schedule for 2008 is 3.5%.

The process was not any longer than usual and it has played out about the same as it usually does every year. Setting the annual pay rates for federal employees is a process that goes on for months, has ups and downs, usually involves the same players with the same arguments and usually gets implemented in December or January of the new year. (Astute readers will recall that in 2004 the executive order on pay was not issued until March.)

President Bush issued an executive order implementing the new pay rates on Friday afternoon, January 4th. As part of the same process, OPM had its paperwork lined up so that it issued various documents at the same time to implement the pay raise and also posted its pay tables on the OPM site. We have also gone through and made a few minor changes to the FedSmith pay tables that we originally posted in October. For those who may be wondering, our original estimates all appear to have been within a dollar or two from the the final salary figure.

The highest salary increase for 2008 will be in the Washington, DC metropolitan area with a raise of 4.49%. The lowest locality pay area is in Indianapolis with a 2.96% increase. Salaries for members of the House and Senate will go up to $169,300 from $165,200.

According to the Washington Post, the 2008 pay increase will put the median salary for federal employees in the Washington, DC area at $90,698.

Most federal employees will be in a pay range of $19,293 to $140,355. In Washington, where the largest number of federal employees are concentrated, the range will be from $20,607 for a GS 1/Step 1 to $149,000 (GS 15/Step 10 limited because of a pay cap).

OPM has also issued its annual memo on the pay adjustments. There is a limitation on pay for some federal employees. As noted above, the pay cap for some will be $149,000 as the annual pay rate is limited to the rate for level IV of the Executive Schedule. The aggregate limitation on pay for calendar year 2008 is $191,300 (equivalent to the rate for executive level I). A small number of SES members covered by a certified performance appraisal system are subject to a higher limitation on pay of the Vice President’s salary ($221,100 in 2008).

The federal pay system is complex and has been tweaked and changed over time. Some federal employees also receive premium pay. There is also a limitation on that pay in a biweekly pay period. (See the chart on biweekly caps on premium pay by locality.) This limitation is defined as not exceeding ” the greater of the biweekly rate payable for (1) GS-15, step 10 (including any applicable locality payment or special rate supplement), or (2) the rate payable for EX-V ($139,600 in 2008). ”

There are also other exceptions so check with your servicing personnel office if you think this is applicable to your situation.

So how complex is the federal pay system? OPM has written out examples of pay computations for GS employees. No doubt, even the experts within agencies have trouble figuring out this Byzantine bureaucratic system which, in all probability, provides high paying salaries for a number of people who have to work all year to figure out how to administer the federal pay rates.

It’s an election year so you can count on elected officials with large number of federal employees among their constituents issuing press releases taking credit for their role in the annual ritual–along with a strong implication that you should vote to continue that incumbent in office because he or she has ensured your paycheck has gone up this year (not as much as their check has gone up–but at least yours went up). (See 2008 Pay Raise on Track: What Arguments Will Sway Congress)

No doubt, our next article on this topic will be something like “How Much Will Your Pay Increase Be in 2009?” We will hold off on that though for another few weeks.

Congratulations to readers who are getting this pay raise!

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. Follow Ralph on Twitter: @RalphSmith47