Obama To Propose 1.6% Pay Raise For Federal Employees

Date: February 04, 2016

FY 2017 Budget To Also Propose Six Weeks Of Paid Parental Leave

According to comments during a conference call between the White House and union officials, President Obama’s FY 2017 budget, to be unveiled next week, will contain a pay raise for federal employees averaging 1.6 percent. This would be an increase from the average raise for FY 2016 of 1.3 percent. In a statement from the Office of Management and Budget, “an unidentified administration official” said, “The President’s 2017 Budget will propose a 1.6 percent pay increase for military and civilian Federal personnel. The specific proposals for base and locality pay will be made in August and November, as is done every year and required by statute, through the exercise of the President’s alternative pay plans,” the Washington Post reported. The Post also said that “two people on the call also said that the president will propose six weeks of paid parental leave for federal employees.” Current federal policy allows workers to take up to 12 weeks of unpaid leave as part of the Family and Medical Leave Act. The proposal is not without controversy, as Federal News Radio (DC) reported, with the planning receiving “cool reactions from unions” representing federal workers. National Treasury Employees Union National President Tony Reardon, for example, said the proposed pay hike “is too low and does little to overcome several years of pay freezes and below-market increases.”

What This Means For Small Businesses

While union representatives have their own complaints about this proposed pay hike, small business owners struggle with rising labor costs. Increases for the pay of federal workers could negatively affect small businesses because it may place increased pressure on them to also boost wages in order to attract and retain the best workers.

Additional Reading

Reuters also reported on the proposal.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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