Here’s What Needs to Happen for the 2023 Federal Employee Pay Raise

President Biden and House appropriators seem thus far to be in agreement that federal employees should receive an average 4.6% pay raise next year, but there are still several steps officials must take before it can be implemented at the end of the year.

In March, Biden released his fiscal 2023 budget proposal, which included the pay plan. Although the document did not specify how the figure would be split between an across-the-board basic pay hike and an average increase in locality pay, traditionally 0.5% of an overall raise figure has been set aside for locality pay.

And last month, the House Appropriations Committee advanced the spending bill that serves as the vehicle for provisions related to federal worker compensation, without any mention of a pay raise, effectively endorsing the White House plan.

On Capitol Hill, there are still a few opportunities for federal employee groups and some lawmakers to try to increase the raise to the average 5.1% figure they have been advocating for.

The House appropriations bill is still subject to debate and amendment on the floor before lawmakers pass the legislation, although it is unclear when they will take the measure up. And Senate appropriators likely will write and advance their own version of the bill in their chamber. And while some Senate Democrats may also support a larger pay raise, Senate Republicans could use their increased leverage, due to spending bills needing 60 votes to advance, to try to reduce the size of the raise.

But even if Congress doesn’t take any further action to alter Biden’s pay raise proposal, the White House must take multiple additional steps to ensure it is implemented in January.

First, Biden must formally issue an alternative pay plan by the end of August. The step is a largely perfunctory declaration of an economic emergency preventing the federal government from instituting automatic pay increases as outlined in the Federal Employee Pay Comparability Act. For decades, presidents have used this tool to prevent sizeable automatic increases in federal employees’ locality pay from taking effect.

The formal alternative pay plan also would spell out how much of Biden’s proposed 4.6% pay raise would go toward an average increase in locality pay.

Then, Biden must issue an executive order before the end of the year to finalize the pay plan so that it can be implementing for the first pay period in January. That executive order confirms the increase in basic pay, 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.