Happy New Year from FedSmith!
2024 was an eventful year, and many events impacted federal employees. I picked some that I felt were the most noteworthy for the federal workforce which I discuss below, but first, I wanted to thank all of you who take the time to read the FedSmith website each day. The service we provide would not be possible without our readers, so thanks to all of you for continuing to allow us to provide this service.
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Highlights of 2024
2025 Federal Pay Raise
The annual pay raise process is always an important topic and one of great anticipation throughout the year. The process typically kicks off in the spring when the White House publishes its budget proposal which usually includes a proposed pay raise for federal employees. Then it’s watch and wait to see if Congress enacts legislation to set a pay raise for the following year, but this usually does not happen.
In August, the president will release the Alternative Pay Plan letter formalizing a proposed pay raise.
2024 was unique in that the normal pay raise process had a last minute plot twist: a group of lawmakers sent President Biden a letter urging him to more than double his proposed 2% pay raise in order to achieve pay parity with the military. Most military members were getting a 4.5% pay increase, so some lawmakers and federal employee unions were rallying around this argument as a way to give the federal workforce a larger pay raise. This heightened the anticipation: would the pay raise be 2% or 4.5%?
We got the answer to that question on December 23 when the president’s Executive Order was released providing an average raise of 2%.
Extra Christmas Holiday
2024 also saw another unusual Christmas gift for federal employees: President Biden gave them an extra day off on Christmas Eve when he announced that federal government offices and agencies would close on December 24, 2024.
It is unusual for federal employees to get an extra Christmas holiday when Christmas falls in the middle of the week based on historical precedent, so the additional holiday was probably a welcome surprise for many federal employees.
2024 TSP Returns
The stock market has risen significantly in 2024, so federal employees who are investing for the long term in the stock funds in the Thrift Savings Plan (TSP) should be happy with the returns they have gotten this year. 2023 was a year with excellent returns as well, so two years of solid gains in the TSP stock funds is good news after the lackluster returns in 2022.
The bull market in 2024 has pushed the number of TSP millionaires to a record level as well.
Repeal of the WEP and GPO
Retired federal employees welcomed the passage of the Social Security Fairness Act, legislation that repeals the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). As of the time of this writing, it has not been signed into law by President Biden, but expectations are that it will be.
2025 FEHB Premiums
Not all of the most significant occurrences in 2024 were good news for federal employees. In September, the Office of Personnel Management (OPM) announced that the average increase in the enrollees’ share of the premiums would be 13.5% next year, the largest increase by far in at least the last decade. As health insurance providers are required to cover more and more conditions and procedures, the costs continue to rise.
The Election
2024 was an election year, and this always will have implications for the federal workforce, particularly when it results in a new administration heading to Washington. Turnover frequently means changes to policies and procedures.
DOGE
The Trump administration has promised to shake things up for federal employees, and one of the most notable examples was the announcement after the election of the Department of Government Efficiency (DOGE) being led by entrepreneurs Elon Musk and Vivek Ramaswamy.
DOGE is not a federal agency and therefore does not have authority to make any laws, regulations or cuts on its own. Instead, it will study areas where it believes cuts need to be made to unnecessary regulations and to help get the federal government’s spending under control and present the recommendations to President Trump.
Nobody knows at this point how successful DOGE is likely to be in achieving its goals, but people are lining up to support the effort, and some lawmakers in Congress are offering their support as well. Some federal employees, however, are concerned about what it could mean for them.
Telework
Remote work and telework for federal employees became a hotly debated topic in 2024, even more so after the election. The Trump administration and DOGE have promised to reduce or eliminate telework and remote work for federal employees, and some lawmakers in Congress have already started introducing reports and legislation with their proposals on how to sharply reduce or eliminate them altogether.
Although the bills that have been introduced late in 2024 have no chance of becoming law under the current session of Congress, they do paint a picture of what may be on the agenda in Congress starting in 2025.
Federal employee unions are laying the foundation of a legal battle with the Trump administration by working to codify telework and remote work in the collective bargaining agreements with federal agencies. AFGE’s agreement with the Social Security Administration was one of the most high-profile cases. The union represents 42,000 SSA employees and reached an agreement with the agency that lasts until 2029 to cover the duration of President-elect Trump’s second term.
With the battle lines clearly drawn, 2025 will certainly be an interesting year for telework.
Conclusion
2024 was an eventful year for federal employees, and 2025 is likely to be also with the change in administrations after the election. We will continue to keep you informed along the way.
These are the events I felt were among the biggest for federal employees in 2024. Are there others that you think should be on the list? Please share them in the comments below.
