Federal Employees Remain on Track for Two Percent Pay Bump

The two percent pay raise for federal employees in 2025 is another step closer.

As required by the end of August, President Biden sent a letter to congressional leaders stating that he will implement an alternative pay plan for federal employees.

In the letter, the president once again endorsed the two percent pay increase, which the White House has been pushing since it released its FY 2025 budget proposal.

Federal employees will receive an average boost of 1.7 percent to basic pay and an average 0.3 percent boost to locality pay.

“We must attract, recruit, and retain a skilled workforce with fair compensation in order to keep our Government running, deliver services, and meet our Nation's challenges today and tomorrow.  This alternative pay plan decision will continue to allow the Federal Government to employ a well qualified Federal workforce on behalf of the American people, acknowledging wage growth in the labor market and fiscal constraints,” President Biden wrote in the letter.

The 2025 raise is significantly less than the 5.2 percent raise federal employees received in 2024 and the 4.7 percent raise they received in 2023.

It also ends the tradition of keeping military and civilian raises comparable, as military members are on track for a 4.5 percent raise.

The numbers greatly irritated federal worker groups and some Democrats in Congress who say federal workers should be earning more, particularly with inflation still hanging around the cost of housing skyrocketing in many markets.

For instance, Representative Gerry Connolly (D-VA) and Senator Brian Schatz (D-HI) are sponsoring legislation in both houses that aim to give federal employees a 7.4 percent raise next year. That legislation, the Federal Adjustment of Income Rates (FAIR) Act, is seen as unlikely to gain traction.

All this means the two percent pay raise is on track to become reality unless Congress enacts a different raise. That’s highly unlikely as lawmakers have remained silent on the numbers during the appropriations process.