August 31, 2021

President Biden has reaffirmed his intent for a 2.7 percent federal employee pay raise in January, meanwhile stating an intent to split the raise with 2.2 percent paid across the board and funds for the other 0.5 percentage points split off and divided up as locality pay.

Biden stated that intent in a letter to Congress that is a routine but needed step when Congress has not enacted a raise figure into law by the end of August. In almost all cases, as in this one, the late-August letter has repeated the raise proposal presidents originally made in their early-year budget message to Congress.

The letter sets an “alternative” raise to be paid by default should no raise figure be enacted into law by year’s end—alternative to the increase that otherwise would take effect automatically. That would be 23 percent, based on Federal Salary Council data on the private/federal sector pay gap.

In language similar to that of his predecessors, Biden wrote cited federal pay law as “if, because of “national emergency or serious economic conditions affecting the general welfare,” I view the increases that would otherwise take effect as inappropriate.”

Breaking off 0.5 percentage points of the raise for the locality component would result in raises varying among the GS localities from slightly above to slightly below 2.7 percent. Unless Congress enacts a different figure by year’s end, the raises would be finalized by a late-year executive order and effective with the start of the first full pay period of 2022—January 2, in most cases.

Federal employee organizations praised Biden for the raise but also indicated their intent to keep pushing for a 3.2 percent total. However, by remaining silent on the raise in a spending bill it recently passed, the House effectively endorsed the 2.7 percent figure as a default. The Senate has not acted on a counterpart bill.

Congress meanwhile is moving to set 2.7 percent as the 2022 raise for uniformed military personnel; by long-standing practice, the federal raise does not exceed the military raise although there have been years in which the former was brought up to the level of the latter in the name of “pay parity.”

Also under long-standing practice, the GS raise figure is paid to wage grade employees locally even though they are under a separate locality-based system. Raises for federal senior executives and certain other career employees at senior levels are based on performance ratings, with the GS raise lifting the caps on their salaries.