Federal Workers to Receive Largest Raise in Two Decades
President Biden signed an executive order on Dec. 23, 2022, officially boosting pay for many civilian federal employees.
General Schedule (GS) employees will receive a raise of 4.1 percent across-the-board in 2023, and a 0.5 percent locality adjustment. The 4.6 percent raise is the largest single-year pay boost for federal employees since 2002.
Workers will receive higher paychecks starting the first pay period in January 2023.
Congress made no mention of federal civilian pay in its recent omnibus appropriations bill, giving a silent endorsement to the President’s plans for the 4.6 percent hike. Congress chose not to act on a bill from Rep. Gerry Connolly (D-VA) and Sen. Brian Schatz (D-HI), the Federal Adjustment of Income Rates (FAIR) Act, which would have provided a 5.1 percent pay riase.
Last year, workers received a 2.7 percent pay raise. However, inflation challenges (November’s Consumer Price Index was up 7 percent) and a spike in healthcare costs (premiums in the Federal Employees Health Benefits Program are growing by an average of 8.7 percent in 2023) has increased pressure to provide greater pay raises.
The raise was lauded by some federal employee groups, including the National Active and Retired Federal Employees Association (NARFE).
”This increase is on par with the pay raise given to military members, and it tracks with recent increases in private-sector pay for the second consecutive year,” said NARFE National President Ken Thomas in a statement.
President Biden unveiled plans for the raise in August writing at the time, “This alternative pay plan decision will allow the Federal Government to better compete in the labor market to attract and retain a well‑qualified Federal workforce.”
The 4.6 percent figure is an average. Some workers could see slightly higher or lower raises based on their locations. The Office of Personnel Management (OPM) posted salary tables online for workers to check their 2023 compensation numbers.
Areas with the highest locality adjustments include Seattle-Tacoma, Washington at 5.15 percent and San Jose-San Francisco-Oakland, California at 5.13 percent. Workers in the greater Washington, DC region will see a raise of 4.86 percent. Areas with lower raises include Indianapolis-Carmel-Muncie, Indiana at 4.38 percent, Atlanta-Athens-Clarke County-Sandy Springs, Georgia at 4.43 percent and Cleveland-Akron-Canton, Ohio at 4.48 percent. Employees who work outside the 53 localities will get a 4.37 percent raise.
The pay raises do not apply to senior political officials, whose pay has been frozen each year since 2014. Congress kept the freeze on those pay raises in effect in the Consolidated Appropriations Act, 2023.
OPM also released a memo on the results of its annual review of special rates. OPM conducts the review to determine special rate adjustments when General Schedule pay is adjusted.
In the memo, OPM Director Kiran Ahuja states that “no agency requested a January 2023 adjustment for special rates different from the default amount.” Director Ahuja set the special rates amount at 4.1 percent, in line with President Biden’s plan.
Agencies facing staffing challenges can submit special rate requests throughout the calendar year.