NTEU Chapter 296
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  • Employees on Track for 1 Percent Pay Raise, Extended Window for Repaying Deferred Taxes
    Dec 22, 2020

    Employees on Track for 1 Percent Pay Raise,
    Extended Window for Repaying Deferred Taxes

    Earlier today, congressional leadership unveiled the giant omnibus spending bill and attached coronavirus relief package. Congress is poised to vote on the bill today, and the president is expected to sign it. Current funding runs out at midnight tonight.  

    Federal employees are on track to receive a 1 percent across-the-board pay raise in 2021. By deferring to the president's initial proposal, Congress rejected last-minute attempts from Senate Republicans and the president to freeze employee pay next year. However, 1 percent does little to close the 23 percent gap between federal employee salaries and their higher-paid private sector counterparts. NTEU will work with the incoming Congress and administration to secure a 2022 pay raise that recognizes the contributions of federal employees.

    The bill includes a provision giving federal employees subject to the four-month payroll tax deferral 12 full months to pay back the deferred taxes. The amount of deferred taxes will now be withheld over 26 pay periods instead of eight. NTEU voiced concern that requiring employees to pay the deferred taxes in just four months was too short and would present them with a financial burden in 2021. NTEU commends Sen. Chris Van Hollen (Md.) and other congressional allies who fought to give federal employees more time.

    As for timing, the House will take up the legislation first with votes likely early this evening. Senate action will happen after that potentially taking us up to the midnight funding deadline.

    As we continue to carefully review the 5,593-page bill for provisions impacting federal employees, including agency funding levels, NTEU will share this information and updates in your inbox, on our dedicated web page and on Facebook.

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