“Specifically, I have determined that for 2023, the general base salary increase will be 4.1% and local salary increases will average 0.5%, resulting in an overall average increase of 4 .6% for civilian federal employees,” Biden wrote.
He cited recruitment and retention challenges for federal positions among the reasons for the proposed increases. The new compensation plan, he added, would allow the federal government to better compete with the private sector.
“Several years of lower pay increases for federal civilian employees compared to ordinary law have resulted in a substantial pay gap for federal employees versus the private sector,” Biden wrote. “The American people rely on federal agencies being managed and staffed with qualified, talented, and committed employees, including those with critical skills, which necessitates keeping federal compensation competitive.”
The increase would apply to some 2.1 million executive branch employees, but not the more than 600,000 U.S. Postal Service employees, whose raises are set through collective bargaining. Cost of living increases for federal retirees are also determined separately, reflecting the same measure of inflation used for Social Security benefits.
The salary increases announced by the president are not set in stone. If Congress passes different salary increase rates for 2023, those numbers would prevail over Biden’s. If Congress doesn’t specify a tariff, Biden’s numbers take effect automatically. The Democratic-controlled Congress is unlikely to push for lower rates than Biden.
Tony Reardon, president of the National Union of Treasury Employees, said the increase would “go a long way to recruiting and retaining the public servants our government needs”. However, he said his union would continue to lobby Congress for the 5.1% average increase proposed by some Democrats.
Splitting the total into two parts would result in varying increases among some four dozen urban areas with their own rates; a catch-all rate applies elsewhere.
The Washington region, where about 15% of federal employees work, would be in line for one of the largest increases, according to a recent report by a federal compensation advisory committee. The exact figures would be fixed towards the end of the year.
An average increase of 4.6% would be the largest since an increase of the same percentage was paid in 2002. Two years earlier, employees had received an average increase of 4.8%.
Last year, Biden announced that civilian federal employees in 2022 would receive a general base pay increase of 2.2% and local pay increases of 0.5% on average. Congress did not change these numbers.
Eric Yoder contributed to this report.