2023 in Review: Historic Pay Raise, End of the Vaccine Mandate, and More

A historic pay raise and the end of the vaccine mandate are among the top stories for federal employees in 2023.

Happy New Year from FedSmith!

As we head into 2024, we first must say goodbye to 2023, a year that had some noteworthy events for federal employees.

I’ve highlighted what I considered to be the biggest events of the year for the federal workforce below, but first, I wanted to say thank you to all of you who take the time to read the FedSmith website each day. As much as I enjoy bringing news to the federal community, it would not be possible without our readers, so thanks to all of you for continuing to allow us to provide this service.

The variety of content published on FedSmith.com is made possible by our authors who take the time to share their knowledge and expertise with the federal community. Thanks to them, you can read a variety of articles on important topics to help you with your federal career or in planning for retirement. If you ever come across an article that you find particularly useful, please consider taking a moment to let the author know that it was helpful to you.

Highlights of 2023 for Federal Employees

These are what I consider to be some of the biggest events for the federal workforce in 2023.

I want to hear from our audience also – what do you think were some of the most important events this year for federal employees or retirees? You can share them in the comments below.

A Historic 2024 Federal Pay Raise

President Biden finalized the 2024 federal pay raise last week when he issued his annual Executive Order setting it in stone. Current federal employees will get an average 4.7% raise next year with an additional 0.5% for locality for a total of 5.2%.

This is the largest pay raise for the federal workforce in 44 years. 1980 was the last time federal employees got a pay increase of this size. It was 9.1% that year under President Carter.

New Locality Pay Areas Added

Speaking of pay raises, the Office of Personnel Management approved the addition of four new General Schedule locality pay areas for 2024 and added a number of federal employees into existing locality pay areas. These actions added about 33,000 federal employees who are not currently under a GS locality pay area to one starting next year. Over time, being in a locality pay area can have a dramatic impact on a federal employee’s salary.

The new locality pay areas are:

  • Fresno-Madera-Hanford, California
  • Reno-Fernley, Nevada
  • Rochester-Batavia-Seneca Falls, New York
  • Spokane-Spokane Valley-Coeur d’Alene, Washington-Idaho

There are now 57 locality pay areas under the General Schedule (58 counting the “rest of U.S.” locality).

As far as the 2024 federal pay raise goes, some locality pay areas got a higher pay raise than others with the inclusion of the base pay raise and the final locality percentage that is applied.

End of the Vaccine Mandate

2023 was the year that saw the formal end of President Biden’s COVID-19 vaccine mandate for federal employees. He created the mandate via an Executive Order in 2021. Its terms were straightforward: get the COVID shot or put your job on the line. Federal employees were given 75 days to get the vaccine before disciplinary action was to begin.

There was a religious exemption that federal employees could exercise, and many did, however, it was revealed not long after the vaccine mandate was put in place that federal agencies were compiling databases of the federal employees and their religious information who exempted themselves from the mandate on religious grounds. This served to add more controversy to an already contentious situation.

To put it mildly, the president’s vaccine mandate was controversial from the start. FedSmith readers both for and against the vaccine shared hundreds of comments on the many articles we posted covering the vaccine mandate and the legal battles that ensued. Lawsuits were filed against the government over the vaccine mandate, and lawmakers in Congress also fought against it by introducing legislation. An injunction was eventually issued against it, but ultimately, it became a moot point after the vaccine mandate was withdrawn.

President Biden formally terminated the vaccine mandate via another Executive Order on May 9, 2023.

The Biden administration announced the end of the COVID vaccine mandate for federal employees as of the end of the day on May 11, 2023

TSP’s I Fund is Changing

The I Fund in the Thrift Savings Plan (TSP) is getting a new look in 2024 thanks to a change the Federal Retirement Thrift Investment Board (FRTIB), the agency that oversees the TSP, approved in November of this year. The I Fund will track a new benchmark index that will include greater diversity in international companies in which the fund invests.

The I Fund currently tracks the MSCI EAFE. The new benchmark index is the MSCI ACWI IMI ex USA ex China ex Hong Kong Index. The current MSCI EAFE index invests in 798 large and mid-cap stocks in 21 developed countries. The new index invests in 5,621 large, mid, and small-cap stocks in 21 developed and 23 emerging markets.

The new index is a collection of large, mid, and small-cap stocks in developed and emerging markets countries, but it excludes investments from China, Hong Kong, and the United States. That last point is key given the controversy of the last proposed change to the I Fund index.

Several lawmakers objected to the change, but Senator Marco Rubio (R-FL) was perhaps the most strenuous objector to the past plans to change the underlying I Fund index. This excerpt from a letter sent by lawmakers to the FRTIB in 2022 captures the essence of their objections against the proposal:

We are deeply concerned by the Federal Retirement Thrift Investment Board’s (FRTIB) history of voting to invest federal employees’ retirement savings into China-based companies, including firms involved in the Chinese government’s military, espionage, human rights abuses, and aggressive industrial policy designed to undermine U.S. industry. The FRTIB’s previous actions have demonstrated a willingness to invest American retirement savings into Chinese companies working to undermine U.S. interests and national security, as well as exposing federal employees’ retirement savings to considerable risk. This cannot be allowed in the future.

The FRTIB ultimately delayed implementing the change to the I Fund, although it was not scrapped completely. This new solution may alleviate the concerns in Congress regarding investing in Chinese companies.

About the Author

Ian Smith is one of the co-founders of FedSmith.com. He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.