2020 Pay Raise Update: Still 2.6%?

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By on November 23, 2019 in Pay & Benefits with 0 Comments
4 vertical stacks of coins growing in height from left to right with wooden blocks in front that read '2020' depicting a 2020 pay raise

As many readers know, President Trump has recommended a 2.6% pay raise for the federal government’s General Schedule employees to become effective in January 2020.

Under his proposal, locality pay rates would remain the same. If his proposal ultimately comes to pass, the lack of a locality pay raise would be a change and a disappointment to a large number of federal employees in locality pay areas.

The lack of an increase in locality pay would have a bigger impact on federal workers in places such as the Washington, DC metropolitan area and San Francisco, California where the locality pay raises are often the highest in the country for federal workers.

New CR and a Federal Pay Raise

On November 21, 2019, President Trump signed a continuing resolution (CR) sent to him by Congress. This temporary extension of funding will fund the federal government until December 20th.

The latest CR contains a 3.1% pay raise for active-duty military members, extends expiring health care programs and includes additional funding for the Census Bureau to continue preparing for the 2020 census. The pay raise for military personnel will be the largest increase for service members in nine years.

What Will Happen Next?

The pay raise for federal employees, unlike for retirees and Social Security recipients, is a decision based on politics and through the political process. Predicting what will eventually happen is speculative as anything can happen.

Last year, federal employees learned in February what the 2019 raise would be and it was paid retroactively. The 2019 raise also included locality pay. The average pay raise last year ended up at 1.9%.

One likely possibility for the raise is that Congress will, in effect, accept the president’s proposal for the 2020 pay raise. That frequently happens in the final negotiations.

Another possibility is that Congress will decide to give federal civilian employees under the GS pay schedule the same raise as military personnel. 3.1% is obviously considerably better for the finances of federal workers than the 2.6% which is now on the table.

What is Pay Parity?

Pay parity is the idea that federal employees should receive the same annual pay raise as military personnel. There is no legal requirement that pay parity be implemented in a given year. The argument is frequently raised by federal employee unions when a higher raise for military personnel is proposed. It is also raised by legislators, particularly from the Washington, DC metropolitan area, seeking a higher raise for many of their constituents that work for the federal government.

While pay parity was an accepted practice for a number of years, the argument is no longer as effective.

In seven of the last 13 years, federal civilians have received a smaller pay raise than military personnel. There have not been any years when federal civilians received a higher pay raise than the military. In 2019, military personnel received a 2.6% raise.

This chart shows how the average military and civilian pay raises have come out in recent years:

YearMilitary RaiseFederal Civilian Raise
20121.6%0%
20131.7%0%
20141%1%
20151%1%
20161.3%1.3%
20172.1%2.1%
20182.4%1.9%

Most Likely Outcome

The reality is that until President Trump issues an Executive Order on the pay raise, which usually happens in late December, the amount of any raise for 2020 is up in the air.

Congress could introduce and pass a bill with a different percentage increase when a final spending bill is passed. Congress could also pass a bill that includes funding for a locality pay increase which could, at the same time, reduce the amount of the increase for many other federal employees.

As of now, with the caveat that anything can happen in Congress, especially with an election year in 2020, it seems the most likely scenario is a raise of 2.6% without a locality pay increase.

© 2019 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

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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

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