Federal Pay Raise 2025: Will Feds Get Their Biggest Raise of 7.4%

The federal pay raise for 2025 is shaping up to be a hotly debated issue in Congress. Some lawmakers are pushing for a substantial salary bump for the over 2 million federal civilian employees nationwide.

Proposed 7.4% Pay Raise in FAIR Act

In January 2024, House Democrat Gerry Connolly (VA) and Senator Brian Schatz (HI) introduced the Federal Adjustment of Income Rates (FAIR) Act, calling for a 7.4% federal pay raise in 2025. This would include:

  • A 4% across-the-board raise
  • A 3.4% locality pay adjustment

The bill argues years of pay freezes, hiring pauses, furloughs, and federal salary lagging the private sector warrants a raise this high. Sponsors say it will help recruit and retain talent.

Why Supporters Say a Big Raise is Needed

Supporters of the 7.4% pay raise point to several factors:

  • Federal pay lag: Federal Salary Council says government workers earn 27.5% less than private sector counterparts on average.
  • Eroded paychecks: Shutdowns, freezes, sequestration cuts, and hiring pauses chopped pay over time, advocates say.
  • Recruitment/retention: Agencies are struggling to recruit cybersecurity experts, IT specialists, and other critical roles.
  • High inflation: Rising costs of living make boosting wages more urgent.
  • Low satisfaction: Federal Viewpoint Survey shows declining pay satisfaction among government employees.

Biden Administration Pay Raises

While the 7.4% proposal faces long odds in Congress, the Biden Administration has already provided substantial pay raises:

  • 2023: 4.6% average raise
  • 2024: 5.2% average raise

These have been the biggest bumps in decades, showing White House commitment to compensating federal personnel.

Will Congress Approve a 7.4% Raise?

Despite support from federal employee unions, a raise this large faces an uphill battle in Congress.

Here are some of the challenges the FAIR Act faces:

  • Republican opposition: House Republicans introduced a bill to halt automatic pay raises altogether.
  • Precedent: Congress has rarely passed its own raises. The President typically sets pay.
  • Cost: A 7.4% raise would have a high cost at a time of large federal deficits.
  • COVID spending cuts: Some in Congress want to cut pandemic relief funds and may oppose big raises.

Given these headwinds, many expect a raise between 4-5% in 2025 – smaller than the proposed 7.4% bump.

President Trump’s Pay Freezes

Federal pay raises stalled under President Trump, who froze salaries in 2019 and 2021.

Trump argued raises were unaffordable, though critics saw it as part of a broader anti-civil servant agenda:

  • 2018: Trump proposed pay freeze, but Congress passed 1.4% raise
  • 2019: Trump froze pay despite 1.9% scheduled raise
  • 2020: Trump proposed freeze, but Congress passed 3.1% raise
  • 2021: Trump froze pay despite scheduled 1% raise

These freezes amplified pay disparities between government and private roles.

How Are Federal Pay Raises Determined?

Federal pay raises are determined using the Employment Cost Index (ECI), which measures private sector salary growth.

Under the 1990 Federal Employees Pay Comparability Act, raises are dictated by the ECI. But Congress or the President can override the ECI formula.

Outlook for Locality Pay Adjustments

Locality pay adjustments are also proposed annually based on pay disparities between federal and non-federal salaries in a region.

The 2025 locality adjustments haven’t been finalized yet. For 2024, adjustments range from 14.16% (San Francisco) to 15.95% (San Jose).

Higher costs of living locations receive bigger bumps.

FAQs on 2025 Federal Pay Raise

How much was the federal pay raise for 2024?

For 2024, federal employees received an average raise of 5.2% – a 4.1% across-the-board raise plus an average locality pay increase of 1.1%.

When will federal employees know the 2025 pay raise amount?

The President’s Budget request, typically published in February, gives the first indication. But the final figure isn’t usually announced until August or September.

Are federal pay raises automatic?

No. The 1990 Federal Employees Pay Comparability Act would dictate automatic raises based on the ECI. But in practice, the President can override this formula.

Do Congress members get the federal pay raise too?

No. Congress votes separately on raises to their pay. They can choose to accept or decline any increases.

Do federal retirees get the annual pay raise?

Yes. Annual cost-of-living adjustments for federal retirees are tied to the pay raises for active federal employees. So retiree COLAs rise when federal salaries go up.

The Bottom Line

While the proposed 7.4% pay raise for 2025 could help reduce the federal-private sector pay gap and boost recruitment, a more modest 3-4% raise may be more realistic given fiscal constraints.

Most expect official word on 2025 federal pay to come between February and September 2024. Federal employee groups will continue pushing Congress for bigger raises to equitably compensate public servants.

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