FEDERAL PROPOSAL: Bill to Increase Federal Employee Raise to 7.4% Introduced in Congress

WASHINGTON D.C. – Members of Congress have put forth the first official proposal for a 7.4 percent raise for federal employees in January 2025. The Federal Adjustment of Income Rates Act (FAIR Act) aims to address the disparity between federal wages and the rising costs of living and labor.

According to House sponsor Rep. Gerald Connolly, D-Va., the last two years saw federal employees receiving raises of 4.6 and 5.2 percent, which were the largest in decades. However, the raises have still not been enough to keep up with the increasing expenses of living and labor. This has resulted in a pay gap of 27.5 percent when compared to private sector jobs.

Typically, the White House submits its budget proposal for the next year in early February. However, due to the delay in the completion of last year’s congressional budget cycle, the proposal is expected to be delayed this year. Congress has only approved temporary funding for agencies, with some funding expiring as early as March 1.

Every year, President Biden proposes a figure for the federal employee raise based on a federal pay law, which is linked to the employment cost index measure of private sector wage growth. For 2025, the proposed figure is 4.5 percent. In past years, Congress has remained silent on the raise, allowing President Biden’s recommendation to take effect by default.

The FAIR Act has drawn support from Congressional Democrats and federal employee organizations, signaling a potential debate on the raise. With the ongoing discussion on the federal employee raise, it remains to be seen how Congress will respond to the proposal in the coming months.