Your pay raise is coming

Federal workers will get an average 3.5 percent pay increase in 2005. But congressional leaders are still trying to keep their promise to provide other benefits to enhance the federal workplace and keep up with the private sector.

The raise was higher than President Bush's request for an average 1.5 percent raise for civilians and 3.5 percent for military service members. A bipartisan coalition of lawmakers successfully backed the higher increase for civilian workers.

"Members of Congress have come to understand that a high-quality civilian workforce in federal agencies means high-quality service to the American people," said Colleen Kelley, president of the 150,000-member National Treasury Employees Union. "They also have come to understand that federal agencies are in a serious and continuing competition with the private sector for talented, dedicated employees."

Other changes could affect how and when federal workers get pay increases in the future. In the next few months, Defense Department officials will come up with a plan for paying 600,000 civilian employees based on performance, not seniority. Homeland Security Department officials are working on a similar system known as pay banding for more than 100,000 workers.

Under the plan mandated by lawmakers, federal workers would not automatically get a yearly pay raise based on seniority as is required now, and across-the-board raises would likely disappear. The details are still being worked out, and union officials representing federal workers are still trying to soften the impact of the changes on paychecks.

But lawmakers have plenty of other things to do to modernize federal benefits. They ran into a snag while trying to make it easier for federal workers to change their contribution rate to the Thrift Savings Plan (TSP). The plan handles retirement funds for more than 3 million federal workers. Until now, federal workers could change their contribution rates only twice a year during specific time periods, but lawmakers wanted to give government employees the same ability private-sector workers have to change their contributions to the 401(k)-style fund anytime they want.

At the last minute, however, the proposal was delayed until later this month. Rep. Tom Davis (R-Va.), its sponsor, promised to get it through Congress as soon as possible.

In addition, Davis said he intends to make sure federal workers can receive matching government funds for their contributions.

Currently, employees must wait until the second open season following the start of their federal service to receive matching contributions of up to 5 percent of their salaries. That means some employees receive agency matching funds after seven months, and others have to wait nearly a year. Davis said he would introduce legislation next year to address this inequity.

"Our work is not finished," he said. "I look forward to working with my colleagues to make additional improvements to the TSP program in the near future."

Davis said he also hopes to expand health care benefits for federal workers by including dental and vision care as potential benefits. Although workers would pay the full premiums under the proposal, they would be able to band together and negotiate for the best deal from health insurance companies.

In a move that does not directly affect federal workers but still affects the workplace, lawmakers also expanded the number of visas available for skilled foreign workers coming to the United States. The number of visas for skilled workers, mostly in scientific and technology fields, will increase from 65,000 to 85,000 a year.

Lawmakers gave federal workers other benefits, too. For the first time, workers will get compensatory time off for business travel outside their normal workdays. Lawmakers also raised the overtime cap for employees of DHS' Customs and Border Protection, allowing them to make up to $35,000 in overtime in fiscal 2005.