With the Senate set to consider extending the federal pay freeze by another year, we address some common questions regarding how federal pay is set.
When did federal employees last receive a raise?
The last general raise, of 2 percent, was paid in January 2010. A law passed late that year froze pay for two years, meaning there were no increases in January 2011 or 2012. Congress is considering paying no raise through 2013, meaning the earliest employees would receive a raise, if an extension is passed, would be January 2014.
Didn’t Congress already vote to extend the freeze?
Only the House has voted on that issue, approving a one-year extension of the freeze as part of a separate bill in February.
If employees do get a raise in 2013, how big will it be?
The White House has recommended a 0.5 percent increase for next January.
Federal pay law indicates a 1.7 percent raise for January, which is the same amount the White House has recommended for military personnel. In many past years, the two raises were set in tandem, in what was called “pay parity.” However, that hasn’t been the case since the 2009 raise.
Typically, raises for the following January are determined annually during the congressional budget process, using a private sector wage growth measure as the starting point. The 2010 law was an exception that determined pay for two years.
How are some federal employees continuing to get raises despite the freeze?
The largest federal salary system is the General Schedule, which covers most white-collar workers below the most senior levels. That system consists of 15 grades, each of which has 10 steps. Generally, employees advance to the next higher step every one, two or three years, varying by the step they are on.
These “within-grade” or “step increases” have remained allowed despite the freeze. So have raises on promotion. In that sense, the freeze is more accurately a pay rate freeze or a salary schedule freeze, rather than a pay freeze.
Pay for some federal employees, including senior executives, is set within broad pay bands. Within-grade raises aren’t paid in those salary systems. However, those employee can get raises based on promotions or performance.
Do all federal employees get the same increase when a general raise is paid?
No. The raise is broken into two components: part is paid as an across-the-board increase, and the money available for the rest is divided up as locality pay. Under locality pay, increases vary somewhat according labor market conditions in various metropolitan and other areas.
How much are federal employees losing due to the freeze?
That depends on what you assume they would have been paid. Before the two-year freeze was enacted, political leaders mainly were considering a 1.4 percent increase for January 2011 (1.9 percent also was on the table); military personnel ended up receiving 1.4 percent. For 2012, the indicated federal raise number was 1.6 percent; military personnel received that amount in January.
If federal raises had been paid in 2011 and 2012, they might have matched the amounts that actually were paid to the military. They also might have been lower. It’s almost certain that the federal raises would not have been higher than the military raises; that hasn’t happened in decades.
As noted above, the number indicated for 2013 is 1.7 percent, but the White House’s recommendation for 0.5 percent for federal workers could effectively set a cap for that increase, if any raise is paid.
Why don’t members of Congress share the pain of pay freezes?
They do. Raises for Congress are supposed to be automatic, set by a separate formula, but the law caps any annual raise for legislators at the base pay raise for General Schedule federal workers. So, when federal workers get no raise, Congress gets no raise.
In addition, Congress in some years rejects a raise for itself even though an increase is paid to federal workers. Since 1994, Congress has gone without a raise nine times, including four of the last six years.