federal employee pay raise 2025, Feds to receive 7.4% raise this year

The Federal Adjustment of Income Rates (FAIR) Act for 2025 has proposed a significant pay raise of 7.4% for federal employees.

This proposed increase is part of ongoing efforts to address compensation disparities between the public and private sectors and to enhance the federal government’s ability to recruit and retain a skilled workforce.

Federal Employees Pay Raise 2025 Announced

The Federal Employees Pay Raise proposal for 2025 under the FAIR Act represents a proactive approach to addressing compensation challenges within the federal workforce.

By proposing a 7.4% increase, the Act aims to mitigate the public-private salary gap, counter inflationary pressures, and enhance the government’s capacity to attract and retain skilled employees.

The proposal underscores the importance of competitive compensation in maintaining a high-quality federal workforce, essential for effective governance and public service.

What is FAIR Act and Why it Matters?

The Federal Adjustment of Income Rates (FAIR) Act is a legislative proposal that seeks to adjust the salaries of federal employees in response to inflation, the cost of living, and the private-public pay gap.

Introduced annually since 2016, the FAIR Act aims to ensure that federal workers receive fair compensation that reflects the evolving economic landscape and maintains the competitiveness of federal employment.


The primary goal of the FAIR Act is to address and reduce the pay disparity between federal employees and their counterparts in the private sector. By proposing annual pay raises, the act seeks to improve the federal government’s ability to recruit and retain a skilled workforce, crucial for efficient and effective public service.


Annual Pay Raise Proposals: The FAIR Act includes specific recommendations for annual percentage increases in federal employee salaries, aiming to align federal compensation with private sector wages and the cost of living.

Focus on Competitive Compensation: By advocating for regular salary adjustments, the FAIR Act attempts to ensure that federal careers remain attractive and competitive for talented individuals.

Historical Trends and Legislative Efforts

Since its introduction, the FAIR Act has consistently proposed higher pay raises than eventually implemented, reflecting ongoing negotiations and budgetary considerations within Congress.

Yearly Proposals vs. Actual Increases

The FAIR Act’s history demonstrates a pattern of ambitious proposals that often exceed the actual pay raises approved by Congress and implemented by the administration. For example:

  • 2017: Proposed 5.3%, Actual 2.6%
  • 2018: Proposed 3.2%, Actual 1.6%
  • 2019: Proposed 3.0%, Actual 1.9%
  • 2020: Proposed 3.6%, Actual 3.1%
  • 2021: Proposed 3.5%, Actual 1.0%
  • 2022: Proposed 3.2%, Actual 2.7%
  • 2023: Proposed 5.1%, Actual 4.6%
  • 2024: Proposed 8.7%, Actual 5.2%

These figures highlight the gap between the FAIR Act’s ambitions and the reality of federal pay adjustments influenced by fiscal constraints and political dynamics.


What is the purpose of the FAIR Act?

The FAIR Act aims to reduce the pay disparity between federal employees and their private sector counterparts, ensuring fair compensation and maintaining a competitive federal workforce.

How are federal pay raises determined?

Federal pay raises are determined through a multifaceted process involving legislative proposals, executive recommendations, and statutory frameworks, balancing economic indicators, budgetary constraints, and policy objectives.

Why do the proposed pay raises often exceed the actual increases implemented?

The gap between proposed and actual pay raises is influenced by fiscal constraints and political dynamics within Congress, leading to negotiations and adjustments in the final pay raise figures.

What factors influence the determination of federal pay raises?

Economic indicators, legislative proposals, and executive recommendations influence the determination of federal pay raises, emphasizing the commitment to ensuring fair compensation for federal employees.

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