President Biden has issued the alternative pay plan letter to bring the 2024 federal pay raise one step closer to reality. This is a required step in the procedure for the pay raise for federal employees in any given year unless there is an intent to implement the Federal Employee Pay Comparability Act of 1990 (FEPCA). That has never happened since the bill was passed.
This year’s alternative pay plan letter states:
Title 5, United States Code, authorizes me to implement alternative plans for pay adjustments for civilian Federal employees covered by the General Schedule and certain other pay systems if, because of “national emergency or serious economic conditions affecting the general welfare,” I view the increases that would otherwise take effect as inappropriate.
Congress could also pass legislation to determine the amount of the pay raise. As that has not been done earlier this year, and there were several opportunities where Congress could have done so in legislation that was under consideration, that is unlikely to happen for the 2024 federal pay raise.
Biden Proposes 4.7% 2024 Federal Pay Raise With 0.5% for Locality Pay
As expected, the annual pay plan letter proposes the same pay raise for federal employees next year that was initially put forth in the White House’s 2024 budget proposal.
The 2024 federal pay raise will be an across-the-board base pay increase of 4.7% and locality pay increases averaging 0.5%. This will put the overall average pay increase at 5.2% for civilian Federal employees, consistent with the assumption in the president’s 2024 budget proposal.
We have created an estimated 2024 GS pay scale of the General Schedule (GS) base pay rates to give readers a general idea of how the 2024 federal pay raise will impact their base pay.
In effect, this means that federal employees in some areas will get a larger raise than others. Locality pay areas such as the Washington, DC metropolitan area and San Francisco pay areas get a larger pay raise because of the locality pay rate applied to their area.
In 2023, federal employees in Seattle-Tacoma came out ahead of all the others with a raise of 5.15%. With a pay raise of 4.35%, Corpus Christi was at the bottom of the list in 2023.
What Is an Alternative Pay Plan?
About 40 years ago, Congress passed the Federal Employees Pay Comparability Act (FEPCA). This law intended to change the way pay is set each year for the General Schedule and to maintain pay comparability by locality. It also called for establishing several special pay plans.
In short, FEPCA created a two-part annual pay adjustment for General Schedule federal employees. Each year, there is to be an across-the-board pay adjustment and a locality pay adjustment that varies by various locality pay areas.
The annual pay adjustment was to be an automatic adjustment based on a formula. Time has rendered this automatic adjustment irrelevant. No president has followed this formula since the law was enacted. As the formula would result in a large pay raise for the federal workforce again this year, that will not happen.
Instead, FEPCA gives the president this alternative.
If, because of national emergency or serious economic conditions affecting the general welfare, the President should consider the pay adjustment which would otherwise be required…to be inappropriate, the President shall—
Public Law 101-509
“(A) prepare and transmit to Congress before September 1 of the preceding calendar year a plan for such alternative pay adjustments as he considers appropriate, together with the reasons therefor; and
“(B) adjust the rates of pay of each statutory pay system, in accordance with such plan, effective on the same day as the increase under subsection (a) would otherwise take effect.
In some years, the president will issue an alternative pay plan that only includes an across-the-board pay raise. In other years, the alternative plan includes a separate percentage for locality pay. Each locality pay area learns of the specific plan for that pay area when the Office of Personnel Management (OPM) posts the information.
Letter to the Speaker of the House and the President of the Senate on the Alternative Plan for Pay Adjustments for Civilian Federal Employees
Dear Mr. Speaker: (Dear Madam President:)
I am transmitting an alternative plan for pay adjustments for civilian Federal employees covered by the General Schedule and certain other pay systems in January 2024.
Title 5, United States Code, authorizes me to implement alternative plans for pay adjustments for civilian Federal employees covered by the General Schedule and certain other pay systems if, because of “national emergency or serious economic conditions affecting the general welfare,” I view the increases that would otherwise take effect as inappropriate.
Accordingly, I have determined that it is appropriate to exercise my authority to set alternative pay adjustments for 2024 pursuant to 5 U.S.C. 5303(b) and 5 U.S.C. 5304a.
Specifically, I have determined that for 2024, the across-the-board base pay increase will be 4.7 percent and locality pay increases will average 0.5 percent, resulting in an overall average increase of 5.2 percent for civilian Federal employees, consistent with the assumption in my 2024 Budget.
We must attract, recruit, and retain a skilled workforce with fair compensation in order to keep our Government running, deliver services, and meet our Nation’s challenges today and tomorrow. This alternative pay plan decision will continue to allow the Federal Government to employ a well‑qualified Federal workforce on behalf of the American people, keeping pace with prior wage growth in the labor market.
The adjustment described above shall take effect on the first day of the first applicable pay period beginning on or after January 1, 2024.
Sincerely,
JOSEPH R. BIDEN JR.
