Larger Than Expected Pay Raise for Federal Employees

Dec 9, 2016

raiseA previous blog mentioned a 1.6 percent pay raise for federal employees was coming in 2017. However, there is an update to that. In a surprise move, President Obama issued a “revised” alternative 2017 pay raise plan for federal employees. Instead of the average increase of 1.6 percent, the pay raise will now be 2.1 percent.

Taking effect in January 2017, this new plan will still be an across-the-board pay increase of one percent. However, instead of adding locality pay to bring the average to 1.6 percent, there are additional payments totaling 2.1 percent.

Per President Obama, this plan new plan is a response to Congress approving a military personnel pay increase of 2.1 percent for 2017. Also, improving economic considerations and the pay freeze that lasted three years and ended in 2014 helped this decision.

In his message, Obama stated, “Considering the decision of Congress to provide a 2.1 percent pay increase for military personnel in 2017 and reconsideration of current and projected economic conditions, I have concluded it would be appropriate to revise my original alternative plan for locality payments so that the total combined cost of the one percent across-the-board pay increase and varying locality payments will be 2.1 percent of basic payroll.”

The president of the NTEU, Tony Reardon, believed the President’s first proposal of a 1.6 percent pay raise could be improved. He said, “Civilian federal employees made significant sacrifices because of the three-year pay freeze that ended in January 2014. Since the pay freeze ended, annual adjustments for civilian federal employees have also been lower than private sector pay increases. Federal pay raises over the last several years have been seriously inadequate. This impacts morale and the government’s ability to attract and retain highly trained workers. While we still believe that the 2.1 percent average increase that will become effective in January should be much bigger, we believe parity with the military is an important recognition of how much our federal workforce contributes to our nation’s well-being.”

To read President Obama’s letter in its entirety, click here.

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