What Still Needs to Happen for Feds to Get a Pay Raise Next Year

Democratic Lawmakers and the White House appear to be in agreement that federal civilian employees should receive an average 2.7% pay increase in 2022, but the plan is currently far from a done deal.

In May, President Biden included an average 2.7% pay raise for civilian federal workers and military service members alike as part of his fiscal 2022 budget proposal. Despite calls from federal employee groups and some Democrats to provide a more generous raise of 3.2%, the House last month approved a minibus appropriations bill that was silent on federal employee compensation, effectively endorsing Biden’s plan.

Now, Biden has until the end of the month to formally propose his alternative pay plan, the largely perfunctory declaration of an economic emergency preventing the federal government from instituting pay raises as spelled out by the Federal Employee Pay Comparability Act. For decades, presidents have used this tool to prevent sizable automatic increases in federal employees’ locality pay.

Biden’s alternative pay plan would finally spell out how the 2.7% pay raise would be split between across-the-board changes to basic pay and an average increase in locality pay. Traditionally, 0.5% of an overall pay increase has been set aside for locality pay, but in 2021, federal workers saw a 1.0% across-the-board increase in basic pay and no change to their locality pay.

With the House’s passage of its appropriations package without considering an amendment to increase the pay raise, it is unlikely federal workers will see more than a 2.7% raise next year. But the Senate, where Republicans will have a greater say due to the 60-vote threshold to limit debate on legislations, has yet to move forward on the spending bill that traditionally includes the pay increase.

Although the first deadline to pass appropriations bills for fiscal 2022 is at the end of September, lawmakers have already begun discussing the prospect of using continuing resolutions to keep the government funded until the chambers can complete spending negotiations. It remains to be seen whether Republicans would use their leverage in the Senate to reduce the raise feds are slated to receive next year.

Following the alternative pay plan and any pending changes to the 2.7% raise that could arise from congressional machinations, Biden must sign an executive order finalizing the raise, and the president’s pay agent, a body consisting of the Labor secretary and the directors of the Office of Personnel Management and Office of Management and Budget, must publish a new set of basic and locality pay tables before the end of the year.