White House Confirms Intent to Propose 1.9% Pay Raise in 2018

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By on April 12, 2017 in Pay & Benefits with 0 Comments

Group of gold dollar signs tilted at different angles against a green background

The big news coming out of Washington this week with respect to the federal workforce is that the hiring freeze has been lifted, but that doesn’t mean federal agencies and their employees should not expect the possibility of future budget cuts.

While some federal employees may find this news disheartening, Office of Management and Budget Director Mick Mulvaney confirmed that the White House has proposed a 1.9% pay raise for federal employees in 2018.

Here are some things to note about the proposed pay raise for next year.

A proposed raise is just that; Congress will have a chance to intervene with a different amount for a pay raise. That has not happened in recent years but with a possible budget battle coming up, that could change for the next pay raise.

Locality Pay

Mulvaney also did not offer any specifics as to how the raise would be split between an overall increase in base pay and locality pay.

At this point, we assume that the 1.9% pay raise is likely to be an average with a higher amount in some locality pay areas and less in others. The base pay rate increase for 2018 will be less than the overall average. The average 2018 federal employee pay raise figure is likely to be reached by taking into account locality pay rates. To see the pay for each grade, step in each locality pay area for 2017, check out our GS Pay Calculator.

Rewarding High Performers

Part of the overall message from Mulvaney in his press conference as well as in the memo released by OMB today was that federal workers should be upbeat about the Trump administration’s proposed changes. Mulvaney noted that the intent of some of the proposals is to reward high performing federal employees and not reward those who are not doing their jobs.

OMB Director Mick Mulvaney speaks at a press conference

White House Office of Management and Budget Director Mick Mulvaney

One reporter asked in the press conference if the administration was worried about making federal employees depressed with these changes. Mulvaney responded:

They [federal employees] shouldn’t be.  And it’s an excellent question.  And here’s one of the things we’ve found so far, which is that one of the frustrations that government workers have is that we don’t reward those who do a really good job, and we don’t punish those who do a lousy job.

Imagine, would you like working in an organization where you do a really nice job and you don’t get rewarded for it?  You don’t even get acknowledged for that?  What kind of morale would that create within that particular organization?

That is one of the things we’ve asked the agencies to look at:  How do you restructure your personnel policies in order to point out people who are doing a great job and figuring out a way to get folks who are not delivering money for the taxpayer, get them on board with whatever it is — whatever policy you’re trying to achieve.  So that is a big part of what we’re doing because we recognize exactly what you said.

I think it’s wrong to sort of paint with a broad brush and say, because we are going to be reducing the overall size of government as part of this, as consistent with our budget, that that means that everybody should just focus on who is getting fired.  That’s the wrong message to take from this.  The right message is we’re trying to figure out a way to make the government more responsive and more accountable, and that means taking care of the people who are doing a good job.

The President wants to reward good employees.  He’s famous for doing that.  Go down to the Trump Hotel and ask the people who used to work for him when he was in the private sector.  He’s a great boss to work for, and he wants to reward people who do a good job.  And you will see that reflected in this document.

Possibility of a Higher Raise?

Legislation has been introduced in both the House and the Senate to give federal employees a 3.2% pay raise next year. This is not expected to pass in Congress.

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About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.