WASHINGTON -- Federal employees will receive annual pay increases of about 5 percent between 1992 and 1994, along with extra pay in the following years to close any gaps between government employees and their private counterparts, as part of a sweeping $4 billion pay agreement reached yesterday between Congress and the Bush administration.
Federal employees in high-cost areas -- such as New York, Los Angeles and Washington -- where there are problems of retaining and recruiting workers would also receive "locality" pay increases in addition to the across-the-board salary increases.
"By bringing the pay system into line with the private sector, I am hopeful we can [stem] the erosion of morale and the loss of some of our best people from federal employment," said Representative Steny H. Hoyer, D-Md.-5th, whose Prince George's County district includes many federal workers and who was the lead negotiator of the plan.
"For too many years, federal government employees have been paid an average of 30 percent less than competitive positions are paid in many areas," he said.
The agreement approved yesterday between House and Senate conferees -- with the blessing of the Bush administration -- includes a 4.1 percent increase for federal employees that will go into effect Jan. 1. The administration initially sought a 3.5 percent raise for next year.
The agreement still faces final House and Senate votes, as well as the president's signature, which could come as early as next week, said Mr. Hoyer.
"This is the biggest change in how federal employees have been paid in over 20 years," said one congressional aide who took part in the discussions. The package is guaranteed to boost the paychecks of the estimated 300,000 government employees in the Baltimore-Washington area.
"This pay reform deal is an exciting opportunity to rebuild worker morale," said John N. Sturdivant, president of the American Federation of Government Employees, which represents 700,000 federal workers.
Under the measure, federal employees in 1992 and 1993 will be guaranteed an increase that would reflect the Employment Cost Index (ECI) set by the Bureau of Labor Statistics. The most recent figure is 5.4 percent. For 1994, federal employees would receive an annual adjustment equal to the ECI minus .5 percent.
The president would have the discretion to alter these adjustments down to 5 percent only in the event of war or severe economic conditions, defined as two consecutive quarters of negative GNP growth. Even if the ECI is less than 5 percent, workers would receive that percentage increase.
The Bureau of Labor Statistics would also conduct annual pay surveys throughout the country to determine whether a pay adjustment is needed to keep pace with private enterprise in areas that have a pay disparity of greater than 5 percent.
Those areas would receive an initial locality adjustment of at least 20 percent of the local pay disparity in 1994.
In subsequent years, the president would be required to close the local pay gap by an additional 10 percent each year until the pay disparity in each area would have been closed by 95 percent.