Biden promises feds a 2.7% pay rise next year

By on 01/09/2021 | Updated on 02/09/2021
Unless Congress passes legislation requiring a different pay increase before the end of the year, the 2.7% rise will be implemented in early 2022. Image via piqsels.com

Plans to increase the pay of US federal civilian employees by an average of 2.7% in 2022 have been formally presented to Congress by President Joe Biden.

In a letter to Nancy Pelosi, speaker of the House of Representatives, and Senate president Kamala Harris, Biden has released details of the nationwide and locality-based elements of the pay hike: an average of 2.2% and 0.5% respectively. Locality pay is a system by which federal employees in more expensive areas are compensated for higher living costs.     

The move is a key stage in the complex and highly politicised process by which federal public sector pay is set in the US.

The Federal Employees Pay Comparability Act 1990 (FEPCA), which was intended to bring federal civilian pay into line with private sector salaries, introduced an automatic formula for setting an annual pay increase for federal employees.

However, the formula has not been implemented once in the following 31 years, due to the high costs involved. According to the Federal Salary Council, which provides non-binding advice to the president, federal employees were paid 23.11% less than their private sector counterparts in 2020.

Instead, successive presidents have used their authority under the act to submit an “alternative” pay plan mandating a smaller rise than the formula provides for, on grounds of “national emergency or serious economic conditions affecting the general welfare”.

In the letter sent on 27 August, Biden followed in this tradition, referring to the authorisation granted to him by the act. “I view the increases that would otherwise take effect as inappropriate,” he wrote. “Accordingly, I have determined that it is appropriate to exercise my authority to set out alternative pay adjustments for 2022.”

Unless Congress passes legislation requiring a different pay increase before the end of the year, the 2.7% rise will be implemented through an executive order and take effect from the start of the first full pay period of 2022, which is normally 2 January.

In January this year, two Democrat lawmakers introduced a bill calling for a 3.2% average pay rise for federal civilian employees in 2022, with 2.2% applicable nationwide and 1% locality-based. It is the seventh consecutive year that a Federal Adjustment of Income Rates (FAIR) bill has been introduced but none has been passed so far.

Public service unions have welcomed Biden’s pay plan for 2022, which gives the same increase to federal civilian employees as to military personnel.

Everett Kelley, national president of the American Federation of Government Employees, said: “Pay parity recognises the essential contributions that civil service and uniformed personnel make to our country, and we are pleased that the Biden administration has honoured this principle.”

The National Treasury Employees Union said in a statement: “We appreciate President Biden’s desire to give federal employees a pay raise in 2022, especially one that includes an increase in locality pay rates. 

“This is a vast improvement over the previous administration’s attempts to freeze federal pay. However, federal employee pay increases have lagged for years and there is still a very real gap between federal pay and comparable positions in the private sector.

“NTEU believes that a 3.2% average raise is merited in 2022, as called for in the FAIR Act legislation introduced earlier this year. We will continue to urge Congress to implement an average 2.2% increase across the board, plus a 1% boost toward locality pay.” 

This year, federal civilian employees received a 1% pay rise across the board, with no additional locality-based element, after President Trump signed an executive order on 31 December. Military personnel were given a 3% pay hike.

About Liz Heron

Liz Heron is a journalist based in London. She worked on daily newspapers for more than 16 years as an education correspondent, section editor and general news reporter. She was Education Editor of the South China Morning Post in Hong Kong and has contributed to a wide range of British media including The Independent, The Guardian and the BBC.

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