What is pay parity and how could it potentially impact your 2025 pay raise as a federal employee
We're going to be discussing that today. Stay tuned. You won't want to miss this
Hello everyone. I'm Ian Smith with fedsmith.com. And today we're going to be talking about pay parity, what it is and how it has the potential to impact your 2025 pay raise as a federal employee
To start off, what is pay parity? Pay parity is the notion of paying federal employees the same in a given year as members of the military. In other words, giving each group the same pay raise. And it's come up this year because there's a group of lawmakers who have been pushing President Biden to issue a new pay raise that's equal to that of the military. The military is on tap to get a four and a half percent pay rate
raise next year, whereas President Biden, in August, authorized a 2% pay raise for federal employees
So this would more than double the pay raise for federal employees if it were to go through
And it tends to come up in years like this when there's a discrepancy between the two groups
And it's usually brought up as a way to argue for a higher raise for one group or the other
by somebody who's got a vested interest in it. Typically, that would be federal employee unions
or in this case, it's a group of lawmakers, many of whom are in districts that have a large
number of federal employees living in those districts. They're pushing for it in order to
argue in favor or to help their constituents. The question is, how likely is it to succeed
I'm here to talk to you today about that with my fellow author, Ralph Smith, who also writes for
fedsmith.com. Ralph, thanks for joining us today. Okay, thank you, Ian. And thank you to everybody who's viewing this
appreciate you taking the time to look at a Fitzsmith video As Ian said this year pay parity has come up because in the proposals that have come out we don have parity In August President Biden issued an alternative
pay letter, and it confirmed a 2% average pay raise for GS civilian employees. On the other hand
that's quite a bit lower, and it's certainly lower than what's been proposed for the military for next
year. There was a 5.2% pay raise in 2024 for federal civilians, 4.6% in 2020, and 2.7% in 2022
For next year, right now, the National Defense Authorization Act has contained in it 4.5% for
military service members. 2% has been proposed for the GS civilian workforce. So obviously
that right now there's roughly 2.5% difference between the two. So there's not parity
As Ian said, some lawmakers have been pushing President Biden to go ahead and improve or increase
the amount of the pay raise for next year. As Ian said, the real question is, can he do it? Well, he can
The president has changed the pay raise this late in the year previously. Back in 2016
President Obama changed the pay raise amount he was proposing mid-December, roughly the same time of year as we're in now
He had originally proposed 1.6% in November. He changed that to 2.1%
And the change was approved because Congress had approved 2.1% for military service members
On December 27, 2016, President Obama issued an executive order giving employees
the higher pay raise So it can be done It has been done And the circumstances this year are a little bit similar to what they were when President Obama was going through the process back in 2016 That a good point and that interesting that it has happened before I sure that will encourage some people to know that it is at least possible
I'm glad you brought up also the average pay raise part. I should have clarified that in discussing it
2%, if that's what the final amount is, would be an average raise, including locality pay
If I remember correctly, it was a 1.7% pay increase with another 0.3%
authorized for locality pay. And obviously, depending on which locality you live in, it could be
higher or lower than that once locality pay is factored in. Could the incoming Congress override this
assuming Biden does end up doing this? I think the answer to that question would be yes
because I know in, I think it was 2019, we were in a similar situation. The federal government was
operating on a continuing resolution. President Trump had proposed a pay freeze that year
whereas the House and Senate had both proposed different pay raise amounts for federal employees for
the coming year. Once the new Congress came in, they ended up overriding the pay freeze in a
spending bill they authorized. And I assume that could happen here, regardless of what the pay raise
ends up being coming out of the White House. Is that your understanding? Yeah, that's right. Congress can
override it, especially in the time where we've got a continuing resolution and a new administration
from a different party coming in. So there's always some inherent differences in philosophy
between the Republicans and Democrats. If we've got a continuing resolution, it's an ideal time
if Congress wanted to. It could change the amount. They could raise it. It could lower it
I think there's a good chance President Biden will go along with the increased amount that's being
asked for by some in Congress, that's a guess. He didn't have to give federal employees the day off
Christmas Eve but he did And I did an article on this a month or so ago predicting that he wouldn do it because it very rarely done when it falls in the middle of the week like it does this year But he did it So perhaps he feeling generous
Maybe he's feeling like Santa Claus in the last few weeks of his administration. We don't know
He has approved something like $1.2 billion in extra funding for the Ukraine. He's also approved
another payment to Ecuador, around another billion dollars. So it's certainly, possible he'd raise the amount up to the four and a half percent that's been suggested
recommended by legislators in Congress. We'll have to see what happens. Congress could override
anything he does, giving federal employees a greater raise or a lesser raise. We'll have to wait
and see what happens. Yeah, it's anyone's guess. I'm sure our viewers and our Fed Smith readers would
love a straight answer on this. There's just not one. But what we can tell you for sure is
that we'll know before the end of December, because regardless of what the pay raise is
it has to be finalized before the start of the year. Although, as we were discussing, it's possible that Congress could come along and change it
after the first of the year, for whatever reason, if they don't like whatever President Biden
ends up doing, and once you start factoring in the spending bills for the coming year
We will keep you informed either way. And we do have several articles about this
I'll be sure to include links to those in the description. So please check those out
As soon as a pay raise is issued and any other important news that comes out regarding next year's pay raise or any changes to it, whatever those may be, we will let you know
Thanks to all the people who may be watching this video. We appreciate you taking the time
And we hope you'll check out the Fed's Fifth website to keep up with the latest on this and other HR
are issues that are affecting the federal workforce as we enter the new year. Thank you
Thanks for out for joining