Biden has announced that he plans to increase the pay raise to 5.2% for 2024. The 5.2% raise would be the highest salary increase since the 1980 pay raise of 9.1% under Carter. This figure includes an “across-the-board” percentage for all feds at 4.7% and 0.5% for locality pay.
As of now, the alternative pay plan falls short of the FAIR Act, a bicameral bill that Rep. Gerry Connolly (D-Va.) and Sen. Brian Schatz (D-Hawaii) introduced in January. The FAIR Act would give the civilian federal workforce an 8.7% average pay raise in 2024, divided between a 4.7% across-the-board base pay raise and a 4% average locality pay increase. Although lawmakers have introduced the FAIR Act in some form every year for the last nine years, Congress has never passed any version of the bill.
The Federal Employees Pay Comparability Act of 1990 (FEPCA) addresses the need for pay reform as Federal employees’ salaries have been lagging private sector salaries. As of 2023, the pay gap between Federal employees and the private sector grew to 24.1% in 2022. This pay gap leads to challenges in recruitment and retention within the civil service.
The pay increase will take effect unless Congress decides to enact a change on the 2024 budget. Usually, when the House and Senate are silent on the pay increase within the spending package, it indicates an endorsement of the President’s suggestion.
Typically, in late December, the President will issue an Executive Order setting the amount of the Federal employee pay increase. This would increase the across-the-board pay raise as well as each locality’s individual increase. The Office of Personnel Management (OPM) will calculate the amount of each employee’s pay increase based on every pay locality, then the pay tables are published soon after the Executive Order is issued.
For more information on how Federal pay raises are determined, check out our most recent article How are Federal Pay Raises Determined? Step-by-Step Process
Reach Out to Us!
If you have additional federal benefit questions, contact our team of CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Federal Employee Benefits Consultants (ChFEBC℠). At PlanWell, we focus on retirement planning for federal employees. Learn more about our process designed for the career federal employee.
Preparing for federal retirement? Check out our scheduled federal retirement workshops. Sign up for our no-cost federal retirement webinars here! Make sure to plan ahead and reserve your seat for our FERS webinar, held every three weeks. Want to have PlanWell host a federal retirement seminar for your agency? Reach out, and we’ll collaborate with HR to arrange an on-site FERS seminar.
Want to fast-track your federal retirement plan? Skip the FERS webinar and start a one-on-one conversation with a ChFEBC today. You can schedule a one-on-one meeting here.
