Step Increases vs. COLAs: Two Different State Raises
When a state worker’s pay goes up, it is usually one of two mechanisms — a step increase or a cost-of-living adjustment (COLA). They are different things, and in a given year an employee may get one, both, or neither.
Knowing which is which explains a lot: why some raises are automatic and others are not, why a strong budget year can lift everyone at once, and why reaching the top of a grade changes what future raises look like.
Step increases
A step increase moves an employee one step up within their existing pay grade. It is a fixed jump built into the schedule — the same grade × step grid described in how state pay scales work. Steps typically come annually until an employee reaches the top step of their grade, after which step increases stop.
Because steps are baked into the schedule, you can see the exact size of each one: on any grid plan page, the step-progression calculator shows the dollar and percent gain between steps. The number of steps and the interval between them vary by state, and some states gate a step on a satisfactory performance review.
Cost-of-living adjustments (COLAs)
A COLA is an across-the-board raise applied to the entire schedule — every grade and step shifts up by the same percentage (or a flat amount). A hypothetical 3% COLA lifts the whole grid by 3%. COLAs are usually set by the legislature through the budget or by a collective-bargaining agreement, and they take effect on a fixed date.
A COLA changes the schedule itself, which is why a new effective-dated version appears when one lands. Unlike a step, it does not depend on where an employee sits within their grade — it moves the floor and ceiling for everyone the adjustment covers.
How they combine
The two stack: an employee can receive a step increase (moving up within the grade) in the same year the whole schedule gets a COLA (shifting the grid up). That is why year-over-year pay can rise faster than either mechanism alone, and why a year with neither can feel flat.
They also run on different clocks. A step often follows the employee’s own anniversary or a shared review date, while a COLA is tied to a budget or contract cycle — so the two can land months apart. To estimate the effect of a hypothetical raise on any salary, use the raise-impact calculator on a plan page.
Promotions and other increases
Steps and COLAs are not the only ways pay moves. A promotion to a higher grade, or a reclassification of a job into a different grade, changes pay outside the step-and-COLA rhythm entirely — the employee lands on a new grade’s range rather than the next step of the old one. Some states also pay a longevity increment for years of service, separate from steps and COLAs.
This is also where state pay diverges from the single federal General Schedule, which applies one nationwide table; each state runs its own version of these mechanics. See state pay vs. federal pay for that contrast, and how often state employees get raises for the timing.
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