President Biden has signed an executive order for a 5.2 percent federal employee pay raise in January, with 4.7 percent paid across the board and the funds for the other 0.5 percentage points used for locality pay.
In a routine letter to Congress in September, Biden set an “alternative” raise to be paid by default should no raise figure be enacted into law by year’s end, which just happened as Congress adjourned for the year. The raise is “alternative” to a much larger increase that otherwise would take effect under a 1990 federal pay law of about 24 percent, tallied by the Federal Salary Council.
“I view the increases that would otherwise take effect as inappropriate,” Biden’s letter said. Still, the 5.2 percent figure would be the largest federal pay raise since the 9.1 percent paid in 1980. “This alternative pay plan decision will continue to allow the federal government to employ a well‑qualified federal workforce on behalf of the American people, keeping pace with prior wage growth in the labor market.”
Raises are effective with the first full pay period of the new year, which for most employees will begin January 14. Employees see the impact of the raise with the pay distribution covering that pay period, which they typically receive about a week to 10 days later, meaning early February, in this case.
The order sets the exact figures by locality, based on findings of pay gaps in more than four dozen areas with their own rates. The Federal Salary Council recently reported that the gaps remain the largest in some areas where the locality pay component already is the highest, including the San Francisco, New York, Seattle, Washington, D.C. and Los Angeles areas.
Four new localities are to be created effective in 2024, in the Fresno, Calif.; Reno, Nev.; Rochester, N.Y.; and Spokane, Wash., areas, and the boundaries of most current localities are to be expanded. In both cases, that will provide an additional pay boost to affected employees, about 16,200 in the new localities and about 17,100 in areas to be added to existing localities.