The federal pay freeze has officially been signed into law. So, what happens next?
Many questions remain about the implementation of the pay freeze. More guidance from the Office of Personnel Management is expected in the next few weeks.
You’ve been emailing Federal News Radio with your questions about the pay freeze. We’ve put together a list of your most commonly asked questions and the answers to them.
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We will continue to answer your questions in this space, so check back often to see what’s new.
For complete coverage from Federal News Radio on the proposed federal pay freeze and pay debate in general, click here.
Federal News Radio continues to work on answers to the following questions.
January 4, 2011 Update:
Q: What impact will the pay freeze have on raises negotiated under collective bargaining agreements?
A: The pay freeze will not affect any pay raises required by current collective bargaining agreements. The OPM memo states, “The pay freeze policy in the Presidential memorandum may not, as a matter of Federal sector labor law, apply to any increase that is required by a collective bargaining agreement that has already been executed and is in effect as of the date of the Presidential memorandum.”
Q: Are performance awards/bonuses affected by the pay freeze?
A: No. According to the OPM memo: “[e]mployees may continue to receive additional payments such as performance awards/bonuses; recruitment, relocation, and retention incentives; and premium payments (e.g., overtime pay).”
December 23, 2010 Update:
Q: Are performance-based pay systems affected by the pay freeze?
A: Yes. According to the memo released by the White House, the Act “generally prohibits executive departments and agencies from providing any base salary increases at all to senior executives or senior level employees, including performance-based increases.” It goes on to say, “To the extent that an agency pay system provides performance-based increases in lieu of general increases, funds allocated for those performance-based increases should be correspondingly reduced to reflect the freezing of the employees’ base pay schedule.”
Q: Will federal employees still be eligible for within-grade step increases?
A: Yes. The Office of Management and Budget tells Federal News Radio that feds will still be eligible for step increases and the increase in pay that comes with those step increases. (See Pay Rate chart.)
December 22, 2010 Update:
See how the pay freeze is worded in the continuing resolution by clicking here (Pages 1-2, SECTION 1, SUBSECTION 147).
December 20, 2010 Update:
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Q: How will the pay freeze affect contractors?
A: Some contractors are starting to feel the pain of the proposed pay freeze as well. Energy Secretary Steven Chu announced that his department will also freeze salaries and bonus pool increases of contractors who operate Energy’s facilities. The freeze will cover 28 locations and 75,000 contractor workers. They perform maintenance, operations and research. The freeze for contractors would begin January 1, 2011.
December 17, 2010 Update:
December 15, 2010 Update:
Questions from December 6, 2010:
Q: Are lawmakers trying for an omnibus before the calendar year ends? Also on the CR: why December 18 vs. funding gov’t at least beyond the holidays? (Updated – See Above)
A: The answer comes to us from a few places. First from a Democratic aide in the House,”Q 1: a year-long vehicle is being sought,” and “Q2: because we are trying to get a year-long vehicle.” Then congressional watchers Chuck Marr, the director of federal tax policy at the Center for Budget and Policy Priorities, and Ian Swanson, news editor at The Hill newspaper, told Federal News Radio the December 18th target date was to give Democrats (currently in control of Congress) more time to try to pass an omnibus package before handing over the reins.
Questions from December 3, 2010:
Q: When will Congress vote on the pay freeze? (Updated – See Above)
A: To be determined. It is unclear if the pay freeze will be voted on in the lame-duck session of Congress or if it will be passed off to the 112th Congress. It is also uncertain how the pay freeze proposal will make its way through Congress (attached to an existing bill or introduced as a separate measure.)
Q: Will there be a job freeze as well?
A: The President’s proposal does not include anything about a job/hiring freeze.
Questions from December 2, 2010:
Q: Will pay increases negotiated by the National Treasury Employees Union still be awarded if the pay freeze is passed?
A: NTEU National President Colleen Kelley tells Federal News Radio, “The answer to that is unclear. NTEU has not yet seen the pay freeze legislation.” NTEU plans to update Federal News Radio as soon as more information is available.
Q: What are the locality pay rates for Hawaii and Alaska in 2011 and 2012?
A: The locality pay rate for federal employees in Hawaii has been set at 11.01 percent in 2011 while feds in Alaska will see a 16.46 percent locality pay rate. In 2012, the locality pay rate for federal employees in Hawaii will be 16.51 percent and feds in Alaska will get a 24.69 percent locality pay rate. Feds in Alaska and Hawaii are on a phased in locality pay scale. Under the Non-Foreign Area Retirement Equity Assurance Act of 2009, feds in Alaska and Hawaii were granted a locality pay increase in phases starting in 2010 with a 33 percent increase each year through 2012. Check out the full list of locality pay rates and read the President’s letter about alternative pay plans.
Questions from December 1, 2010:
Q: Does the pay freeze affect cost-of-living adjustments?
A: No. Cost-of-living adjustments are a separate issue from the pay freeze. COLAs are applied to retirement pay and are based on inflation statistics. It had already been announced that there will be no COLA in 2011.
Q: Does the pay freeze affect civil service retirees?
A: No (see above.)
Q: If Congress does pass the pay freeze, will health insurance rates still go up?
A: Yes. Federal News Radio Senior Correspondent Mike Causey says this is the perfect time to take a look at your health insurance and decide if your current plan gives you the best bang for your buck. Federal employees have until Dec. 13, 2010 to make changes to their health plans during open season.
Questions from November 30, 2010:
Q: What does the pay freeze mean for my locality pay?
A: If the pay freeze is passed, locality pay will remain at 2010 levels while the pay freeze is in effect. So, if a fed’s base pay includes an extra 15 percent for locality pay, they will continue to get that same 15 percent during the pay freeze.
Q: What does the pay freeze mean for step or within grade (WGI) increases? Will they be affected by the pay freeze?
A: An Office of Management and Budget official tells Federal News Radio, “employees will still be eligible for step increases.”
Q: What does the pay freeze mean for promotions?
A: The pay freeze would not affect an employee’s ability to receive more money through a promotion.
Q: What does the pay freeze mean for bonuses?
A: According to an OMB official, “OMB and OPM are evaluating the system of performance awards and in no case will the total amount of bonuses for 2011 exceed the 2010 level.”
Q: Which federal employees are affected by the pay freeze?
A: The pay freeze would apply to all civilian federal (non-postal) employees, including those in various alternative pay plans and those working at the Department of Defense – but not military personnel.
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