Federal Employees Pay Raise 2025 Proposed Increases & Historical Trends

FAIR Act was proposed by President Trump’s White House budget as an attempt to provide federal employees a 7.4% salary increase by 2025, providing comparison between real salary increases and those promised through FAIR.

Federal Employee Pay Raise 2025

Though Congress has yet to pass the FAIR Act since its reintroduction in 2016, it serves as an early warning system and early pay increase indicator for federal workers’ annual pay increases over time. A larger pay increase would reduce any gaps and help with recruiting and retention efforts.

Every year, the FAIR Act’s real percentage falls short of Connolly’s recommendation; Congressman Schatz from Hawaii and its authors hope for an increase of 7.4% among Federal Employees Pay Raise by 2025.

5.2% was the largest increase since 1970 versus 8.7% originally planned by last year’s legislation, as per its supporters the FAIR Act, due to disparate government employment with those found in private industry jobs becoming too great and increasing over time.

History of FAIR Act

When introduced in 2016, the FAIR Act attempted to determine an increase in federal pay rates for 2017. Last year’s legislation provided for an 8.7% pay raise while this year’s version features second highest increases of 6.3% and 11.1% respectively.

Schatz noted that although federal employees saw pay raises of 4.6% and 5.2% during the Biden administration, these raises were insufficient to keep pace with rising living costs and employment demand.

Year of FAIR ActPay Raise YearProposedActual
201620175.3%2.6%
201720183.2%1.6%
201820193.0%1.9%
201920203.6%3.1%
202020213.5%1.0%
202120223.2%2.7%
202220235.1%4.6%
202320248.7%5.2%
202420257.4%????

According to The Government Salary Council’s research, government workers had an average salary gap with private sector colleagues of 27.54% in 2018. According to an Office of Personnel Management study from 2023, federal employees saw their pay satisfaction decrease from 67% down to 57% over time.

How Does Federal Pay Raise Determine?

Politics play a central role in deciding how much existing government employees will receive in raises each year, with FAIR Act’s introduction being the starting point of that annual process.

Next step in White House budget proposals would likely involve publishing its proposed spending plan for next year – usually including proposed pay raises for government employees.

Thus, the process for deciding if and when there will be government pay raises (there have been years without raises) can differ year to year, since its outcome can depend on politics. Congress sometimes approves appropriations bills with changes that include annual federal pay rate changes.

Though Congress often discusses or takes into consideration any salary increases for federal employees, no legislation on this topic has been passed in recent memory.

Federal Financial Planning Strategies for Federal Employees 2025.

The President will present his proposed budget for next fiscal year at some point during March, detailing his ideas about federal workers pay rates; should Congress not act, this figure can become real and cause real increases for federal employees.

Like in 2016, National Federation of Federal Employees strongly supported 8.7% in this year’s FAIR legislation; however, White House ultimately proposed 5.2% as their solution.

Keep in mind when accounting for locality compensation that these numbers represent an average. The “across-the-board” increase suggested in this bill could range between 6.9% and 7.4% depending on locality specific data.

Schatz proposes that federal employees receive a 7.4% pay raise.

U.S. Sen. Brian Schatz of Hawaii submitted legislation Wednesday that would boost government workers’ pay rates by 7.4% by 2025 through Federal Adjustment of Income Rates. With these steps taken by Schatz’s measure, pay disparity between public and private sectors may also decrease due to Federal Adjustment of Income Rates.

According to The Government Salary Council’s reports, government workers had an average salary gap with private sector colleagues of 27.54% in 2018. Furthermore, according to an Office of Personnel Management study from 2023, federal employee satisfaction with pay dropped from 67% down to 57% over time.

Schatz noted that while federal employees were given raises of 4.6% and 5.2% in 2023 and 2024 under President Biden, these increases did not keep pace with rising living and labor expenses.

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