President Biden confirmed his intention today to give Federal civilian employees a 4.6 percent pay raise next year – making it the largest Federal pay raise in 20 years.

In a letter sent to House Speaker Nancy Pelosi, D-Calif., President Biden said the across-the-board base pay raise will be 4.1 percent and locality pay raises will average 0.5 percent, resulting in an overall average increase of 4.6 percent – consistent with his fiscal year (FY) 2023 budget.

“Federal agencies have witnessed growing recruitment and retention challenges with Federal positions experiencing eroded compensation. Multiple years of lower pay raises for Federal civilian employees than called for under regular law have resulted in a substantial pay gap for Federal employees compared to the private sector,” President Biden wrote.

“The American people rely on Federal agencies being managed and staffed by skilled, talented, and engaged employees, including those possessing critical skills sets, which requires keeping Federal pay competitive,” he added. “This alternative pay plan decision will allow the Federal government to better compete in the labor market to attract and retain a well?qualified Federal workforce.”

The pay adjustment will take effect on January 1, 2023, or the first day of the first applicable pay period, President Biden said.

The 4.6 percent pay raise would be the biggest since 2002, when President George W. Bush’s administration granted the same increase. President Biden granted a 2.7 percent pay increase for 2022.

While significant, the 4.6 percent increase is slightly less than some might have hoped for, including Rep. Gerry Connolly, D-Va., and Sen. Brian Schatz, D-Hawaii, who introduced a 5.1 percent pay raise earlier this year.

The National Treasury Employees Union (NTEU) has also endorsed the 5.1 percent pay increase.

“Our argument for a 5.1 percent increase next year just keeps getting stronger,” said NTEU National President Tony Reardon, a member of the Federal Salary Council. “With the latest inflation figures, rising private sector wages, and the new pay gap calculation, it is even more clear that Federal employees need help keeping up with rising costs and the government needs help in recruiting and retaining skilled employees.”

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Grace Dille
Grace Dille
Grace Dille is MeriTalk's Assistant Managing Editor covering the intersection of government and technology.