Executive Order increases Federal Employee Wages by 1.3% for 2016

If you were looking for a pay raise in 2016 as a federal employee, you will be happy to know that it has been approved by President Obama in an executive order.

Same 1% Target from the start

At the beginning of 2015, Obama committed to a 1% raise in the 2015 budget for federal employees. This was countermanding a 3 year pay raise freeze that was put in place by Congress. With this executive order the President put in place a raise for the second year in a row, displacing the congressional mandate of no raises for federal employees.

The President sent a letter to congressional leaders this past August outlining the increases across the board and for locality adjustments as state below:

“Specifically, I have determined that for 2016, across-the-board pay increases will be 1.0 percent… Also, I will make a decision by November 30, 2015, regarding an alternative plan for locality payments under 5 U.S.C. 5304a. This decision is consistent with my fiscal year 2016 Budget and it will not materially affect the Federal Government’s ability to attract and retain well-qualified members for the uniformed services.”

If you are in the executive branch of the government however, this raise will not include you. The raise was passed in an omnibus $1.1 trillion spending bill that would continue the freeze on the Vice President’s salary and other political appointees. This 1% raise will take effect 1 January 2016 and most employees can expect their raise on their first biweekly pay on the 10th January.

0.3% for Locality bumps

Although all employees will receive the 1% pay hike, those living in urban areas will receive differing levels of an increase as determined by tables set out in the legislation, mostly tied to the cost of living according to the Labor Department data in those cities. The average pay hike will not exceed 1.3% the President said, but certain locales might see higher than 1.3% dependent upon their location.

An example of one of the top locations pay increases includes the Washington-Baltimore and San Francisco and San Diego areas which will see a 1.46% increase. The pay council advisory board however states that federal pay rates still lag behind private sector jobs by 35% on average.

Employee Unions still advocate 3.8% increases

This pay increase is nowhere near where employee unions advocate for pay increases. For the past two years, pay increases have been 1 percent and pay rates were frozen for 3 years prior, making the last 5 year increases only a paltry 2%. This two percent does not even come close to the rise in the cost of living, increased health care costs and the rising cost of groceries and medicine. The American Federation of Government Employees National President J. David Cox Sr. and National Treasury Employees Union President Tony Reardon both contend these raise are ‘simply not enough’.

Federal and Military Retirees kept out of raises

Furthermore, these raises do not increase the payments to Federal or Military retirees that are currently on a fixed income. These retirees usually receive a cost-of-living adjustment every January and will have to go without for 2016. This means making the same fixed income stretch farther in order to deal with increases in the cost of living. Many other benefit systems in the US will also forgo these raises as well.

The executive order was issued after Congress decided to support the recommendation for pay raises.