2024 Federal Pay Raise

2024 Federal Pay Raise

The 2024 federal pay raise for civilian federal employees is projected to be 4.6%, the largest federal pay raise in over 20 years. This raise aims to boost federal recruitment and retention efforts by better aligning federal salaries with the private sector. However, the pay raise is not yet finalized.

Key Takeaways

  • The 2024 federal pay raise is currently projected to be 4.6% for civilian federal employees. This is the largest federal pay raise in 20 years.
  • The pay raise is based on the Employment Cost Index (ECI), which measures private sector wage growth.
  • Federal employees also receive locality pay based on where they live to offset higher costs of living. Locality pay will increase along with the base pay raise.
  • The pay raise aims to help federal recruitment and retention and bring federal salaries more in line with the private sector.
  • Congress still needs to pass the 2024 federal budget to finalize the pay raise. The president can issue an alternate pay raise recommendation.

Background on the Federal Pay Raise System

Every calendar year, civilian federal employees receive a nationwide base pay raise to account for private sector wage growth. This raise is determined by comparing the Employment Cost Index (ECI) from the third quarter of the current year to the third quarter of the prior year.

Additionally, federal employees receive locality pay, which varies by geographic location. Locality pay aims to offset higher costs of living in certain areas.

Details of the 2024 Federal Pay Raise

Based on the most recent ECI data, the base nationwide raise for 2024 is projected to be 4.6%. This is the largest federal pay raise since 2002.

For example, a GS-9 federal employee in 2023 would have a base salary range of $43,881 – $57,049. With a 4.6% raise, that range would increase to $45,865 – $59,646 in 2024.

Locality pay raises are also expected to increase by an average of 4.6% next year. So federal employees will see the combined benefit of base and locality raises.

Reasons for the Large Pay Raise

There are several reasons driving the larger 2024 federal pay raise:

  • Private sector wage growth – The ECI shows private sector wages increased by 4.6% from Sept 2021 to Sept 2022, spurring an equivalent base federal raise.
  • High inflation – Rising inflation is eroding the buying power of federal wages. The pay raise aims to offset higher living costs.
  • Recruitment and retention – Many federal agencies are struggling with worsening staffing shortages. Higher pay aims to attract and retain talent.
  • Comparison to private sector – Federal salaries lag the private sector by around 23% on average. The larger raise works to close this pay gap.

Key Impacts

  • Helps federal agencies recruit and retain employees amid widespread staffing shortages. Nearly 80% of federal agencies report skill gaps in critical roles.
  • Boosts the standard of living for over 2 million civilian federal employees across the country.
  • Increases federal personnel costs government-wide by over $10 billion per year, adding to the national budget deficit.
  • Improves morale and job satisfaction among the federal workforce by demonstrating renewed investment.
  • Brings federal salaries closer in line with the private sector to compete for top talent.

What Comes Next

While widely expected, the 2024 federal pay raise is not yet set in stone. Here’s what to look out for:

  • Congress – The pay raise will be included in the 2024 federal budget that must pass Congress by October 2023. Congress could vote to approve, lower, or reject the raise.
  • President’s alternative plan – By November 2023, the President can issue an alternative pay raise recommendation to Congress. President’s recommendations have differed from the expected raise in the past.
  • Final rate – The final 2024 pay raise will be confirmed later this year after Congress passes the federal budget.
  • Locality pay updates – Exact locality pay changes based on geographic area will be announced separately by the Federal Salaries Council.

While not guaranteed yet, a 4.6% raise would be the largest federal pay boost in over 20 years. This reflects renewed efforts to invest in, uplift, and revitalize the skilled federal workforce serving our nation.

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