Federal Employees Pay Raise 2025: Proposed Increases & Historical Trends

The FAIR Act, which aims to provide Federal Employees Pay Raise in 2025 a 7.4% has been suggested. Up to the White House budget, this is the first indication of the 2025 salary increase. A comparison between the real rise and the history of the FAIR Act.

Federal Employees Pay Raise 2025

Although Congress has not approved the FAIR Act, which has been reintroduced since 2016, it serves as a useful early warning system for federal workers’ annual pay increases in the following year. A higher pay increase would close the gap and aid in recruiting and retention.

Every year, the FAIR Act’s real percentage falls short of Connolly’s recommendations; this year, Congressman Schatz of Hawaii and the bill’s authors are aiming for a 7.4% Federal Employees Pay Raise in 2025. 

The increase was 5.2%, the largest in decades, instead of the 8.7% that was originally planned in last year’s legislation. The disparity between similar government employment and those in the private sector, according to the FAIR Act’s proponents, is too great and only growing. 

FAIR Act History

The FAIR Act’s first iteration, which was introduced in 2016, attempted to determine the federal pay increase for 2017. The greatest boost recommended in the FAIR legislation last year was 8.7%, while this year’s bill has the second-largest increase.

Schatz pointed out that while federal workers earned raises of 4.6% and 5.2% in 2023 and 2024, respectively, during the Biden administration, the increases fell short of the growing cost of living and employment.

Year of FAIR Act Pay Raise Year Proposed Actual
2016 2017 5.3% 2.6%
2017 2018 3.2% 1.6%
2018 2019 3.0% 1.9%
2019 2020 3.6% 3.1%
2020 2021 3.5% 1.0%
2021 2022 3.2% 2.7%
2022 2023 5.1% 4.6%
2023 2024 8.7% 5.2%
2024 2025 7.4% ????

The Government Salary Council reports that the average salary gap between government workers and their private sector colleagues was 27.54%. According to a 2023 Office of Personnel Management study, federal employees’ pay satisfaction dropped from 67% to 57%.

Federal Employees Pay Raise 2025

How is the Federal Pay Raise Determined?

A political procedure is involved in deciding how much existing government workers will be paid in raises each year. As previously said, the FAIR Act’s introduction has become a yearly occasion and is now the first step in the yearly procedure.

The White House’s publication of its proposed budget for the next year is probably the next course of action. Usually, this includes a suggested pay increase for government employees.

This implies that the procedure for determining if there will be a government pay boost (there have been years without raises) and how much will change from year to year since it is susceptible to politics. Congress will sometimes approve appropriations bills that include yearly federal pay rate changes. 

Although it often occurs, Congress is not legally required to discuss or take into account a salary increase for federal employees. Congress hasn’t approved any legislation on the topic in a long time.

Federal Financial Planning for Feds 2025

The President’s recommended budget for the next fiscal year, which will be released by the White House at some point in March, contains his opinion on how much federal workers should be paid. This figure becomes a real rise if Congress does not take any action. 

Like in the previous year, the National Federation of Federal Employees strongly supported the 8.7% in the previous year’s FAIR legislation, but the White House ultimately proposed 5.2%. 

It’s also crucial to keep in mind that, when accounting for locality compensation, these numbers are probably averages. The “across-the-board” hike that the bill proposes is probably 6.9%, with a locality-specific average of 7.4%.

Schatz proposes a 7.4% pay raise for federal workers

On Wednesday, U.S. Sen. Brian Schatz, a Democrat from Hawaii, submitted a measure that would boost the salary of government workers by 7.4% in 2025. The difference in pay rates between the public and private sectors would be lessened with the Federal Adjustment of Income Rates. 

The Government Salary Council reports that the average salary gap between government workers and their private sector colleagues was 27.54%. According to a 2023 Office of Personnel Management study, federal employees’ pay satisfaction dropped from 67% to 57%.

Schatz pointed out that while federal workers earned raises of 4.6% and 5.2% in 2023 and 2024, respectively, during the Biden administration, the increases fell short of the growing cost of living and labor.

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