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DOE freezes contractor employees' pay

Freeze to affect approximately 75,000 workers

The Energy Department has announced a two-year freeze on salary increases and bonuses for department contractors who manage day-to-day operations at certain agency sites, including national laboratories. 

The contractor employee pay freeze follows the Obama administration’s recent proposal of a two-year pay freeze for all civilian federal employees.

“As our nation continues to recover from these challenging economic times, households and small businesses across the country are making sacrifices,” Energy Secretary Steven Chu said Dec. 17. “In this spirit, we are asking our contractor employees, who are doing important research, operations and environmental cleanup work, to join the federal workforce in playing a part.”


Related coverage:

After the spending bill: What now?

Spending bill withdrawn


Senate leaders withdrew an omnibus spending package Dec. 16 that included the administration’s federal employee pay freeze proposal, and it is unclear how and when the governmentwide freeze would be implemented.

DOE's freeze will affect approximately 75,000 workers at 28 agency sites and will go into effect Jan. 1. For salary increases that have already been approved and implemented, the freeze will begin at the start of the next salary increase cycle and also last two years, according to the department.

About the Author

Alyah Khan is a staff writer covering IT policy.

Reader comments

Fri, Feb 4, 2011 Burnt out paying for govt

Depending on the Govt agency; 15-20 yrs ago, typical contractors were generally paid more. But then as now, the Feds gets job security, better retirement, more leave, medical/drugs after retirement, more time and money for training, etc. Then many feds retire early using their past privileges as a customer to become a contractor thus pushing down job/income opportunities for existing life-long contractors. Today, Feds get the same and more benefits, Contractors have been cut pensions, forced to reset their benefits with each contract that is increasing given to another low cost contractor, etc. Evidence shows that experienced contractors who become Feds get thousands in payraise upon hiring. (see Govt personnel office for salary info). The few that don't get their immediate reward at hiring get the higher pay after just 1-3 years of grade, step, bonus & annual increases. For every 100 contractors trying to make a living by jumping to become feds, there is only 1 (nonretiree) who leaves for contractor servitude (and in every case I saw that because their working Fed wife gets the fed family retirement/pre-medicare medical coverage benefits for them). Then as a contractor not using the medical plan, they get a no-medical benefit bonus. Get the picture... Govt Feds are treating the rest of us as 2nd class citizens and rigging the rules for themselves.

Thu, Dec 23, 2010

How does this work? Do they "make-up" for the pay freeze after 2 years? So, would it be a cumulative % raise for all 3 years, at the end of the 3rd year..? I am a fed, and am under-paid. Our pension plan sucks, no 401(k). I could probably "more than" make up for all the benefits, even if I worked in the private sector for a short time, and got laid-off. The last that I checked, my peers benefits in the private sector are much higher. And they have had their jobs, for as long as I have. Worth re-considering if it is time to move on to the private sector...I know I am thinking seriously.

Thu, Dec 23, 2010

Absolutely contractor pay should be frozen. I've been on both sides. The up side of being a fed is job security. The up side of being a contractor is higher pay. If the feds are going to be frozen so should we on the contractor side.

Thu, Dec 23, 2010 Jewlz VA

I believe the contractors in question are ORISE contractors who are completing fellowships with the govt. As such, even though they are classified as contractors, they are performing work as though they are govt employees. Not sure how contract law is applied to them, but I don't believe it's the same as contract law for govt contracting companies. It will be interesting to see how this plays out, though.

Thu, Dec 23, 2010 Mike

'Fair' would be to share the burden amongst those who have income. Again, I'll mention the 'Federal Income Tax' system. Those who make less, contribute less. At least it would be sharing the burden across the nation (rather than demotivating and punishing a small group of employees). I don't mind paying a slightly higher percentage on income tax if I know that all of us are contributing accordingly. However, I'm not sure if this is the real solution. It's more like an action...until things get better, right?...then what?

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