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Plans for a 2023 Pay Raise, and More

A weekly roundup of pay and benefits news.

When President Biden unveils his fiscal 2023 budget proposal, slated for some time after the March 1 State of the Union speech, he is expected to recommend federal employees receive their largest pay raise in 20 years.

The Office of Management and Budget reportedly has instructed agencies to prepare final budget proposals to account for an average pay raise of 4.6% in 2023, a figure that would be the largest pay increase for federal employees since 2003. In 2022, federal workers received a 2.7% pay increase, while in 2021, they only saw a 1.0% raise that include no change to locality pay rates.

Although there are no details regarding how the raise might be divvied up between an across-the-board increase to basic pay and an average boost to locality pay, traditionally presidents have proposed 0.5% of the overall figure be devoted to locality pay increases.

In Congress, some lawmakers have already endorsed legislation that would provide federal employees with a 5.1% pay increase next year, split between a 4.1% across-the-board raise and a 1.0% increase to locality pay. The proposals for higher wages than feds have seen in recent years comes amid turmoil about the rate of inflation in the U.S., which is at its highest level in decades.

Gender and Racial Pay Disparities Persist Among Older Feds

The Equal Employment Opportunity Commission on Monday issued a report analyzing the state of age discrimination in the federal workforce, and found that while the federal government has better representation of employees aged 40 and older, a number of pay disparities continue to exist across gender and racial lines.

The report, which is based on data from fiscal 2017, found that while people at least 40 years old make up 57% of the federal workforce, compared to only 45% in the private sector, women in this age group make around $7,400 less per year than men.

White and Asian employees who are 40 or older also consistently make more than federal workers of other ethnicities. White employees in that age group make an average of $91,795 on average; Asians, $98,607; Latinos, $79,945; Black employees, $77,580; and American Indians and Alaska natives, $69,202. The disparities still exist even when accounting for educational attainment, EEOC wrote.

On the bright side, the agency found that the federal government is far better at resolving allegations of age discrimination than private sector employers, despite the fact that age discrimination complaints make up a larger proportion of EEOC complaints at federal agencies than in the private sector. The federal government settled 20% of age-based EEO complaints in fiscal 2017, compared to only 7% for private sector employers, while 2.64% of private sector age complaints resulted in EEOC issuing findings, compared to only 0.52% of complaints from federal employees.