An 8.7% raise for the US Federal Workforce? Speculation over next year’s pay raise has begun! Since 2016, the FAIR act has started the process for determining the pay increase for feds.
The 2017 pay raise was ultimately decided by former President Obama as he was leaving office at the end of his second term. The salary increase ended up being 2.6% – considerably less than then 5.3% first proposed in February 2016 by the Virginia Representative Gerry Connolly.
Since then, the congressional representative has continued to propose the FAIR act in every subsequent year – usually around the end of January or the beginning of February. While the actual federal raise has always ended up less than what has been stipulated in the proposed legislation- meaning the bill has never made it through the legislative branch’s approval process- it typically sets a benchmark for what can be expected.
Learn how a sizable pay raise (and more) can impact a federal employee’s financial plan at our no-cost webinar: REGISTER HERE
Last year, Connolly and other representatives pushed hard for a 5.1% raise for federal workers. Not just setting the percentage in the FAIR act, the politicians also penned a letter to the Biden White House regarding the 5.1% recommendation after the Executive Branch’s proposed budget suggested a 4.6% raise. The White House’s proposed budget’s figure is what eventually became official at the end of 2022 through an executive order, finalizing a 4.1% across-the-board raise and an average 4.6% increase when factoring in locality pay.
This year’s iteration of the FAIR act offers the largest pay increase suggestion since the first inception of the bill: 8.7%. This includes a sizable average locality boost of 4% with the across-the-board percentage being 4.7%. (The 8.7% figure comes from the 2023 COLA that federal annuitants and Social Security recipients received.)
Here is a chart showing the past pay raises suggested by the FAIR Act versus what percentage ended up actually happening the following year:
|Year of FAIR Act||Pay Raise Year||Proposed||Actual|
Until Next Time,
**Written by Benjamin Derge, Financial Planner, ChFEBC℠. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.