The Rumor was True: FY 2019 Budget Proposes Pay Freeze

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By on February 12, 2018 in Pay & Benefits with 0 Comments

US dollars frozen in a block of ice depicting a pay freeze

Late last year, rumors about a proposed pay freeze for federal employees in the White House’s 2019 budget proposal surfaced. The news was based on a report leaked by a whistleblower that was then published by minority staff on the Senate Homeland Security and Governmental Affairs Committee. (See Pay Freeze for Federal Employees in 2019?)

Turns out the rumor was true.

The FY 2019 budget proposal released by the Trump administration today proposes a pay freeze for federal employees next year. According to one of the budget documents:

Across the board pay increases have long-term fixed costs, yet fail to address existing pay disparities, or target mission critical recruitment and retention goals. The Administration therefore proposes a pay freeze for Federal civilian employees for 2019.

Pay for Performance

The same document also says that the Administration believes in pay for performance and says that the existing salary structure for the federal workforce “promotes longevity over performance.”

“This is most evident in the tenure-based ‘step-increase’ promotions that white-collar workers receive on a fixed, periodic schedule without regard to whether they are performing at an exceptional level or merely passable (they are granted 99.7 percent of the time). The Budget proposes to slow the frequency of these step increases, while increasing performance-based pay for workers in mission-critical areas,” reads the document.

Making it Easier to Fire Federal Employees for Cause

Without directly stating “it should be easier to fire federal employees for cause,” the budget document suggests that reforms to make removing non-performing federal workers easier are a priority for the administration.

This excerpt outlines the philosophy:

One of the Administration’s first priorities was to address poor performers and conduct violators. The Administration recognizes that the vast majority of employees uphold their Oath of Office and work diligently. A percentage, however, are simply unable or unwilling to perform at acceptable levels. Their peers in the Federal workforce recognize this issue. Every year, the vast majority of Federal workers surveyed disagree with the statement that, “in my work, steps are taken to deal with a poor performer who cannot or will not improve.”

Each year, fewer than one in 200 Federal employees is fired. In contrast, more than 99 percent of employees are rated as fully successful or higher in their evaluations. The failure of Federal performance management systems to adequately differentiate the performance of individuals extends up to the SES cadre, where the modal rating is “exceeds expectations,” and at many agencies it is “outstanding.” This sort of grade inflation does little to help managers reward high performers or otherwise make necessary distinctions to inform decisions concerning the workforce. This is yet another area where the Federal workforce could benefit from adopting some private sector norms.

“A System Whose Time Has Come – And Gone”

One of the key points in the budget document is that laws governing the civil service system are outdated and need reforming, hence the suggestions of proposals such as pay for performance.

The General Schedule system is referred to in the budget document as an “antiquated structure” that “hinders the Federal Government’s ability to accomplish its mission.”

This quote largely sums up the theme of the administration’s position:

The Civil Service Reform Act of 1978 turns 40 this year. It is time to reconsider where that law has succeeded and where it has failed. The private sector continually finds new ways to evolve human capital management programs to maximize the return from their most valuable asset: their people. The Federal Government should do no less.

For other details about proposed changes to federal benefits from the FY 2019 budget proposal, see Substantial Cuts to Federal Employee Benefits Proposed in FY 2019 Budget.

Budget FY 2019: Strengthening the Federal Workforce

© 2018 Ian Smith. All rights reserved. This article may not be reproduced without express written consent from Ian Smith.

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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.

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