Federal Employees News Digest

President orders 0.6 percent locality pay hike

President Obama last week transmitted an “alternative pay plan” to Congress that includes an average 0.6 percent across-the-board increase in locality pay effective Jan. 1.

Together with the 1 percent basic pay increase, civilian federal employees covered by the General Schedule and certain other pay systems will get an average 1.6 percent pay increase at the beginning of 2017, the amount specified in the alternative pay plan he submitted to Congress Aug. 31.

The president is authorized to implement an alternative pay plan when budgets are under fiscal pressure.

“Since the pay freeze ended, annual adjustments for civilian federal employees have also been lower than private sector pay increases and statutory formulas for adjustments to the General Schedule for 2014 through 2016,” the president wrote in his message to Congress. “However, we must maintain efforts to keep our nation on a sustainable fiscal course. This is an effort that continues to require tough choices under current economic conditions. Under current law, locality pay increases averaging 28.49 percent and costing $26 billion would go into effect in January 2017. Federal agency budgets cannot sustain such increases.”

The 2017 locality payment table is located at: https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/locality-payments-under-presidents-alternative-plan-january-2017.pdf.

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Edward A. Zurndorfer Certified Financial Planner
Mike Causey Columnist
Tom Fox VP for Leadership and Innovation, Partnership for Public Service
Mathew B. Tully Legal Analyst

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