Stuck under the dreaded federal pay ceiling? Here’s what to look for

Last week’s column on the federal pay raise wasn’t quite as satisfying for GS-15s, who wanted to know what their prospects are under the infamous pay ceiling in 2022.

You asked, we heard you.

To remind those who are blissfully unaware, some long-time GS-15s, depending on where they work and their spot on the federal career ladder, have experienced this phenomenon for several years now.

According to federal statute, salaries for career employees on the General Schedule can’t exceed the pay rates for political appointees and others at level IV on the Executive Schedule.

As either Congress or the president raises federal employee salaries each year but keeps this arbitrary pay cap in place, it means a growing number of long-time career feds bump up against a pay ceiling that’s either fixed in one place or raised slowly when Congress remembers to adjust it.

This highly-nuanced detail of the federal pay and personnel system impacts long-serving and top-ranked GS-15s, whose salaries are technically growing with annual federal pay raises but can’t realize their “full” raises due to a cap on their pay.

Unfortunately, it’s a little too early to start making assumptions about what we might see in this area in 2022. That’s because Congress usually resolves those details through the annual appropriations process, and surprise, surprise, they’re really nowhere close!

We expect Congress will tackle a short-term continuing resolution to kick the can down the road and keep the government open past Sept. 30. If previous years are any indication, Congress may put together an omnibus spending bill before Christmas.

We expect whatever budget measure Congress does pass will endorse the president’s planned 2.7% raise for most feds.

For those GS-15s and 14s impacted by federal pay compression, here’s what to look for.

One, Congress could raise the federal pay ceiling. That’s different than lifting or eliminating the pay cap on GS-15s altogether, but it’s probably the best case scenario in today’s world. It means feds impacted by the pay cap, yes, get a raise, even though they’re not technically realizing their “full” salaries.

It also slows down or pauses the salary compression phenomenon, depending on the size of the raises.

The good news is that Congress has some practice with this in recent years. It’s raised the federal pay ceiling for each of the last three years, $172,500 for 2021, $170,800 in 2020 and $166, 500 for 2019.

It would make some logical sense for Congress to do so again.

The other option, of course, is that Congress doesn’t raise the federal pay ceiling; it stays exactly where it is at $172,500. That’s also happened in recent memory, and it’s bad news for many GS-15s. As feds on the lower rungs of the General Schedule earn their raises, the gap shrinks between them and the GS-15s maxed out by a mostly immovable pay ceiling.

If most feds get a 2.7% raise but the pay cap doesn’t budge, more GS-15s will likely fall under that federal pay ceiling.

Federal pay compression already affects employees in a total of 25 separate locality pay areas. That total would likely increase if the pay ceiling doesn’t budge next year.

As my colleague Mike Causey described last week, many GS-15s in the Washington, D.C., San Francisco and New York locality areas have experienced pay compression for years. Failing to raise the pay cap next year could bring more of them under this ceiling.

GS-15s in other regions were already dangerously close to reaching the federal pay ceiling this year, and likely would next year, depending on how the math works out.

A GS-15, step 10 in Columbus, Ohio, for example, was just $154 shy of the $172,500 pay cap in 2021.

Career GS-15s in Huntsville, Alabama, were $398 away from entering the pay cap club this year.

Top feds in Phoenix, Arizona, were even closer. GS-15, step 10s in the region were $10 away from joining the pay cap club this year.

There’s another option, but I wouldn’t bet money on it. Congress could reevaluate federal pay compression, choosing to break from or eliminate the pay cap for GS-15s altogether.

One reader recently asked me whether this might be possible, considering House Speaker Nancy Pelosi recently lifted the pay cap for some congressional aides. The move will allow them to earn more than their bosses, whose base salaries are set by law and haven’t changed in more than a decade.

It’s possible, but Congress would have to pay attention long enough to make change a reality. To change the status quo for Capitol Hill staffers, the House formed an entire select committee to study pay, benefits and HR and tech policies within the congressional workforce.

There are some who argue the White House and Congress need to stand up a select committee or commission to study pay in the executive branch too. But considering Congress can only pass a handful of major bills into law each year, those prospects seem rather bleak.

So, not much certainty at this point for those stuck, or near, the dreaded federal pay ceiling. Stay tuned.

Nearly Useless Factoid

By Alazar Moges

An American feminist, suffragist, suspected spy, prisoner of war and surgeon, Dr. Mary Edwards Walker remains the only women ever to receive the Medal of Honor, which she was awarded for her service during the Civil War.

Source: NPS

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