Obama Has Until Aug. 31 to Offer Alternate Pay Raise Plan

Feds likely will receive a 1.6 percent pay increase in fiscal 2017, unless Congress intervenes.

Federal employees will find out officially in a few weeks what their 2017 pay raise amounts to.

The president has until Aug. 31 to formally announce his 2017 pay raise proposal for federal employees. He is expected to propose a 1.6 percent across-the-board pay hike for civilian federal employees – the recommendation he outlined in his fiscal 2017 budget and the amount he has supported so far throughout the year. He also has recommended a 1.6 percent bump for military service members for fiscal 2017.

If the president doesn’t inform Congress of his alternative pay plan for feds by Aug. 31, then the increase mandated by the 1990 Federal Employees Pay Comparability Act kicks in. Under FEPCA, the raise would be determined by the change in the Employment Cost Index minus 0.5 percent. For 2017, that is around 2.1 percent.

Presidents, however, largely have ignored the FEPCA formula in their federal pay raise proposals, preferring to offer their own figure, which they are allowed to do under law. Congress created FEPCA, which provides an annual across-the-board salary boost and a locality pay adjustment for General Schedule employees, to close the public and private sector pay gap.

Feds received a 1.3 percent pay boost for 2016, which included locality pay adjustments. Obama has received criticism from federal employee advocates for giving historically low across-the-board raises to base pay in recent years -- following three years of no raises at all during the pay freeze -- and the locality pay areas and definitions announced at the end of last year provided the administration with a different avenue for increasing feds’ compensation.

Of course, Congress has the final say on any pay raise. Lawmakers could upend the president’s 1.6 percent recommendation and the FEPCA formula this fall by coming up with their own pay raise proposals for federal civilian employees, but it’s not likely at this point.

Earlier this month, the House passed the fiscal 2017 Financial Services and General Government Appropriations Act, allowing for a pay raise for federal workers next year. For the last several years, federal workers have ended up with the pay raise the president recommended.

Lawmakers in both chambers have introduced legislation that would give federal employees a 5.3 percent pay hike across-the-board in 2017, but those bills are not likely to gain any traction when Congress returns to a busy fall after summer recess. The fiscal year ends on Sept. 30, and Congress has yet to agree on any fiscal 2017 spending bills.

Last summer, Obama released his official pay proposal for federal workers on Aug. 28.