The Federal Salary Council (FSC) said that federal employees on average earn 22.47% less than their private sector counterparts.
So does this mean that federal employees should expect a pay raise of over 20% in the near future? Don’t count on it.
How the Federal Salary Council Recommendations Work
The President appoints the members of the Federal Salary Council. It includes three experts in labor relations and pay policy and six representatives of federal employee unions and other employee organizations.
The FSC submits recommendations on the locality pay program to the President’s Pay Agent. The FSC’s recommendations cover the establishment or modification of pay localities, the coverage of salary surveys (conducted by the Bureau of Labor Statistics) used to set locality pay, the process for making pay comparisons, and the level of comparability payments that should be made.
The FSC’s recommendations are advisory. The President’s Pay Agent makes the final determination on locality pay areas and also makes the final recommendation to the President regarding locality pay percentages that go into effect the following year.
One of the last recommendations of the FSC found that the federal employee pay disparity was over 26%.
In reality, the pay disparity figures do not lead to raises anywhere close to what the union members on the FSC would like to see.
As FedSmith readers know, the pay raises over the last few decades have not been anywhere close to 20%.
However, the recommendations have led to new locality pay areas and adding more cities or regions to existing locality pay areas which has the net effect of boosting the pay for many federal employees, so while federal employees probably will not see any 20%+ raises anytime soon, they can reasonably expect expansion of locality pay areas based on recommendations from the FSC and actions from the President’s Pay Agent.
Impact on the 2023 Federal Pay Raise
So will the latest Federal Salary Council recommendations on pay disparity have any impact on the 2023 pay raise? The short answer is no.
Since the FSC recommendations could ultimately expand locality pay in some way, that could be what is at least an indirect impact on future pay raises. Any federal employees who might wind up inside of a new locality pay area might see a pay boost as a result. However, that does not happen until OPM issues a proposed regulation and it is finalized so the additions would probably not occur until 2024 at the earliest.
Status of the 2023 Federal Pay Raise
Now that we are in August, the 2023 federal pay raise process is now well underway. At last check, it looks very likely that the 2023 federal pay raise will end up being what the White House originally proposed: 4.6%. The House and Senate have both signed off on the 4.6% raise by taking no direct action on it.
August is normally the month when the president submits the alternative pay plan letter which is part of the annual process. President Biden will most likely do this late this month and we will provide an update at that time.
The 2023 federal pay raise will most likely become finalized late in the year when an executive order is issued and the Office of Personnel Management publishes the finalized 2023 federal pay tables.
