End of the Federal Pay Freeze Announced

A new executive order announces the end of the federal pay freeze. The new pay rates will not take effect until after March 27, 2013.

As most readers know, President Obama proposed a pay freeze on civilian employee pay that was applicable all federal civilian employees. This was way back in 2010. It did not impact pay raises as a result of promotions or within-grade increases but it was good political theater and the move was supposed to save the government money which it has probably done.

The White House said at the time that the pay freeze would save $2 billion for the remainder of fiscal year 2011, $28 billion over the next five years, and more than $60 billion over the next 10 years. We do not know if that much has or will be saved or if it was political rhetoric in lieu of actual facts. The president noted that  action had to be taken because of “the massive deficits we inherited and the unsustainable fiscal course that we are on. Doing so will take some very tough choices.”

But, as readers know, the pay freeze is still in effect today and the deficits in the past four years have swamped previous yearly deficits by adding as much as $1.4 trillion in new debt in one year alone. The other three years of Mr. Obama’s presidency have also exceeded more than $1 trillion each year (despite the federal employee pay freeze) due primarily to increased government spending in the past several years.

But, the good news is that the pay freeze will end in late March.

The reason: A new executive order has been issued providing for a new pay schedule beginning “on the first day of the first applicable pay period beginning after March 27, 2013.” The pay raise will generally be about 1/2 of 1%.

The legal authority for the new executive order is in the continuing resolution that is currently in effect. It reads, in part:

Notwithstanding any other provision of law, any statutory  pay adjustment (as defined in section 147(b)(2) of the Continuing  Appropriations Act, 2011 (Public Law 111–242)) otherwise scheduled to take effect during fiscal year 2013 but prior to the date  specified in section 106(3) of this joint resolution may take effect  on the first day of the first applicable pay period beginning after  the date specified in section 106(3).

No doubt, there will be many questions from federal employees in a variety of different situations in the various pay systems used by the federal government. These questions will, in most cases, be answered by the Office of Personnel Management as we get closer to implementation of the new pay rates.

For those who may also be wondering if Congress could change the pay rates or completely eliminate the pay raise, the answer is that it could be done. However, the change would have to pass both the House and the Senate and, as a practical matter, the Senate has not displayed any independence from the desires of the White House. So any change is unlikely (although not impossible) prior to the effective date.

After most readers had an extra holiday on Christmas Eve, and with the announcement of a pay raise—even a small one—many of our readers may be looking at the new year with a more positive outlook.

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