President Issues Alternative Pay Plan for Calendar Year 2016


Last week President Obama sent Congressional leaders a formal letter transmitting an alternative pay plan for the calendar year 2016 pay raise for federal workers, providing for an average pay raise of 1.3%  (SEC employees receive the annual pay raise in January pursuant to the Compensation Agreement negotiated by NTEU in 2014).

Under current law, absent congressional action to establish a pay raise, the annual, across-the-board pay raise for most 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 1st of the preceding calendar year. The White House has set the across-the-board raise for 2016 at 1.0% and plans to provide 0.3% for increases to locality pay rates for a total average pay increase of 1.3%. The White House announced late last week that the specific plan for locality pay increases will be released to Congress, as is required by law, prior to December 1st. Earlier this year, the President’s Fiscal Year (FY) 2016 budget proposal to Congress included a total 1.3% pay raise for federal employees for 2016.        

Congress has not finished its work on the various FY 16 appropriations bills needed to fund federal agencies starting on October 1st. It is possible that Congress could still act on a different pay raise amount through the remaining appropriations process—which could include blocking a pay raise entirely. So far this year, Congress has remained silent on a pay raise, which would allow the President’s Alternative Pay Plan announced today to become law. Congress has again included needed language in its appropriations bills to ensure that wage grade employees receive the same pay raise that is ultimately provided to employees covered by the General Schedule. 

NTEU recognizes that overall federal employee pay has risen only 2% in the last five years, compared to an increase of 8.3% in average private sector wages. It is a positive step to restart increases to locality pay after five years, however, the amounts are far too low. You not only deserve a higher across-the-board adjustment and locality pay raises, but economic data also reveals increases in private sector wages and bonuses, meaning agencies will struggle even more to recruit and retain skilled workers as our economic recovery continues. The union will continue to press Congress to act on the NTEU-supported FAIR legislation that would provide a 3.8% raise. We will keep you updated on all administration and congressional actions through the end of the year that affect your pay.