President Biden has issued the letter outlining his alternative pay plan for the 2025 federal pay raise. President Biden has issued the alternative pay plan letter to bring the 2025 federal pay raise one step closer to reality.

This is a required step in the annual pay raise process for federal employees in any given year unless there is an intent to implement the Federal Employee Pay Comparability Act of 1990 (FEPCA). That has never happened since the bill was passed.

This year’s alternative pay plan letter states:

Title 5, United States Code, authorizes me to implement alternative plans for pay adjustments for civilian Federal employees covered by the General Schedule and certain other pay systems if, because of “national emergency or serious economic conditions affecting the general welfare,” I view the increases that would otherwise take effect as inappropriate.

Congress could also pass legislation to determine the amount of the pay raise. As that has not been done so far this year, and there were several opportunities where Congress could have done so in legislation that was under consideration, that is unlikely to happen for the 2025 federal pay raise. As expected, the annual pay plan letter proposes the same pay raise for federal employees next year initially put forth in the White House’s 2025 budget proposal. The 2025 federal pay raise will be an across-the-board base pay increase of 1.7%, and locality pay increases averaging 0.3%. This will put the overall average pay increase at 2% for civilian Federal employees, consistent with the assumption in the president’s 2025 budget proposal.

This means that federal employees in some areas will get a larger raise than others. Locality pay areas such as the Washington, DC metropolitan area and San Francisco pay areas get a larger pay raise because of the locality pay rate applied to their area. In 2024, federal employees in Seattle-Tacoma came out ahead of all the others with a raise of 5.7%. With a pay raise of 4.89%, Houston was at the bottom of the list in 2024.