President Issues Alternative Pay Plan for Calendar Year 2018

Today, the President sent Congress a letter transmitting an alternative pay plan for the calendar year 2018 pay raise for federal workers.

President Donald J. Trump
President Donald J. Trump

Today, the President sent Congressional leaders a formal letter transmitting an alternative pay plan for the calendar year 2018 pay raise for federal workers in the General Schedule. Under current law, absent congressional action to establish a pay raise, the annual, across-the-board pay raise for most federal employee pay systems is set automatically using a formula tied to the Department of Labor’s Employment Cost Index (ECI), which measures the rise in private-sector pay. However, the law also provides the President with the ability to set a different pay raise amount, which is required to be transmitted to Congress by September 1 of the preceding calendar year. The White House has now formally set the across-the-board raise for 2018 at 1.4%, and is designating 0.5% for locality pay rates (which will vary by specific locality pay area) for a cumulative 1.9% pay raise on average as originally proposed in the administration’s budget. Under the formula prescribed in the Federal Employees Pay Comparability Act, the federal pay raise should be the ECI figure minus a half percent. However, the administration’s alternative pay plan is offering ECI minus one percent for the across-the-board portion of the raise.

A dark contrast photo of the US Capitol against cloudy gray skies.It is still possible that Congress could act on a different pay raise amount — which could include blocking a pay increase entirely. However, as of now, with FY18 congressional appropriations work incomplete as we near the start of the new FY on October 1st, Congress has remained silent on a pay raise, and should Congress remain silent through the end of December, today’s Alternative Pay Plan would become law. Language has been included in the pending appropriations bills to ensure that wage grade employees receive the same pay raise that is ultimately provided to employees covered by the General Schedule.

Pay cut - bill cut with scissorsNTEU recognizes that the last few years have been challenging ones for federal employees – particularly in the pay area which has included a three-year pay freeze followed by several years of small raises that have left federal pay raises trailing average increases to private sector wage raises. Additionally, Congress is considering administration-proposed cuts to retirement, which could negatively further impact take-home pay for federal employees. NTEU supports legislation (S.255 and H.R.757) that would provide a 3.8% pay increase in January.

To find out more, and see what you can do, please visit the NTEU Legislative Action Center.

I will keep you updated on all administration and congressional developments through the end of the year that impact federal employee pay. And we will continue to press for a higher pay raise to be included in a final FY18 funding bill.