As I wrote a couple of years ago, the goal of the statute that created the current pay structures for Federal trade, craft, and laboring employees is to provide the same rate of pay for those at the same grade level within a local wage area, and to accomplish this by annual surveys of local non-Federal organizations with similar kinds of jobs to determine the prevailing rate in the local area for the surveyed jobs. However, Federal Wage System (FWS) wage adjustments have been limited to the same increase as granted to GS employees at least since 1989.
And it looks like those limitations will impact the FWS, Nonappropriated Fund (NAF) and crews of vessels again this year. However, as in years past, this guidance will not apply to employees who negotiate their pay under Section 9(b) of P.L. 92-392, 19 August 1972, e.g., certain employees of the Bureau of Reclamation.
2018 Pay Raise
So what is the current guidance for Fiscal Year 2018 (FY 2018, which began on 1 October 2017)?
This year the process is affected by two statutes: Division E of the Consolidated Appropriations Act, 2017; and the Further Additional Continuing Appropriations Act, 2018, which extends into FY 2018 two provisions of the FY 2017 Act. The two statutes establish two guidelines for agencies adjusting wages for prevailing rate employees.
First, wage increases in FY 2018 for prevailing rate employees may not exceed 2.13 percent; this is the overall average pay increase given to all GS employees nationwide.
Second, the wage increases in FY 2018 for prevailing rate employees in a particular wage area may not be less than the increase received by GS employees in that area.
This creates an interesting dilemma in a few cases because GS locality pay areas and FWS wage areas are not identical in the geographic areas that they cover. Thus, FWS employees in one wage area may be paid at different rates depending on where their official duty stations are located.
When Will the Raise Take Effect?
The guidelines established by the two statutes tell us that prevailing rate employees will get a wage adjustment. The next issue is when will that adjustment occur?
FWS and other prevailing rate employees know that not all annual wage adjustments occur at one time. While GS employees all get their annual adjustment in the first pay period that begins on or after 1 January, FWS employees in the various wage areas spread across the United States get their annual adjustments once each year but on a variety of dates. In addition, the DCPAS website reminds us that FY 2018 FWS wage adjustments will be delayed until the FY 2018 pay limitation is released, but that when issued, wage adjustments will be retroactive to their normal effective date. Now that the pay limitation guidance has been issued, the wage adjustments and, in some cases, the retroactive adjustments should begin to appear in employee’s take home pay.
For example, the latest wage schedule for the Baltimore, Maryland, wage area was effective on 28 December 2016, while the latest wage schedule for the Reno, Nevada, wage area was effective on 9 May 2017. As a result the date of the annual adjustment for an FWS employee will vary depending on the wage area in which she or he works, but the effective date will be about one year after the effective date of the last annual adjustment to the wage schedule in each wage area. Employees in wage areas where FY 2017 wage schedules were established prior to the publication of this guidance may receive pay adjustments back to the effective date of the wage schedule once this guidance has been applied to each schedule.
In summary, prevailing rate employees including FWS employees will see an adjustment to their wage schedules in Fiscal 2018, and that adjustment should become effective about 12 months after the date the last annual adjustment was made. Based on the budget passed recently by Congress, the increase may not exceed 2.13 percent.