Order Code RL34463
Federal White-Collar Pay:
FY2009 Salary Adjustments
Updated October 23, 2008
Barbara L. Schwemle
Analyst in American National Government
Government and Finance Division

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Federal White-Collar Pay: FY2009 Salary Adjustments
Summary
Federal white-collar employees are intended by law to receive an annual pay
adjustment and a locality-based comparability payment, effective in January of each
year, under Section 529 of P.L. 101-509, the Federal Employees Pay Comparability
Act (FEPCA) of 1990. The law has never been implemented as originally enacted;
annual and locality payments pursuant to the statute have been reduced each year.
Although the annual adjustment and the locality payment are sometimes referred to
as cost-of-living adjustments, neither is based on changes in the cost of living.
The annual pay adjustment is based on the Employment Cost Index (ECI),
which measures changes in private-sector wages and salaries. The size of the locality
payment is determined by the President and is based on a comparison of non-federal
and General Schedule (GS) salaries in 32 pay areas nationwide. (The GS is the pay
schedule that covers white-collar employees under the Civil Service.) By law, the
disparity between non-federal and federal salaries was to be gradually reduced to 5%
during the years 1994 to 2002. Continuing in each year thereafter, FEPCA requires
that amounts payable may not be less than the full amounts necessary to reduce the
pay disparity to 5%. For the January 2009 pay adjustment, the ECI shows that the
annual across-the-board increase would be 2.9%. The Federal Salary Council and the
Pay Agent recommend that, to carry out FEPCA, the 2009 locality payments range
from 23.40% in the “Rest of the United States” (RUS) pay area to 59.65% in the San
Jose-San Francisco pay area, and be 53.94% in the Washington, DC, pay area.
Because the new locality rates replace the existing locality rates, the rate change is
derived by comparing 2008 locality payments with those recommended for 2009.
This comparison results in recommended net increases for 2009, if the ECI and
locality-based comparability payments were granted as required by law, of 12.19%
in the RUS pay area, 23.96% in the San Jose-San Francisco pay area, and 31.03% in
the Washington, DC, pay area. The nationwide average net pay increase, if the ECI
and locality-based comparability payments were granted as required by law, would
be 19.24% in 2009. The Pay Agent stated that it would be unwise for the
recommended locality payments to take effect because of the “current national
emergency.”
The President’s FY2009 budget proposed a 2.9% federal civilian pay
adjustment. This percentage is the overall average increase, including locality pay
adjustments. The House and Senate versions of the Financial Services and General
Government Appropriations Act for FY2009 (Section 737(a) of the draft House bill
and Section 738(a) of S. 3260) would provide a 3.9% pay adjustment for federal
civilian employees. Division A, Section 142(a) of P.L. 110-329, the Consolidated
Security, Disaster Assistance, and Continuing Appropriations Act, 2009 (H.R. 2638),
enacted on September 30, 2008, provides a 3.9% pay adjustment for federal civilian
employees, including employees in the Department of Homeland Security. P.L. 110-
372, the Senior Professional Performance Act of 2008 (S. 1046), enacted on October
8, 2008, raises the limitation on basic pay for senior-level (SL) and scientific or
professional (ST) positions to Executive Schedule Level II ($172,200, as of January
2008) in those agencies whose performance appraisal systems are certified by the
Office of Personnel Management. This report will be updated as events dictate.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Pay Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Annual Pay Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Locality-Based Comparability Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Methodology for Determining the Locality-Based
Comparability Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
January 2009 Pay Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Annual Pay Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Locality-Based Comparability Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The President’s Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Congressional Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Financial Services and General Government Appropriations Act . . . . 13
Continuing Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Legislation Related to Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Performance Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Basic Pay Limitation for Senior-Level (SL) and Scientific
or Professional (ST) Positions . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
List of Tables
Table 1. Annual and Locality Pay Adjustments under FEPCA, 1991 to 2008 . . 17
Table 2. January 2009 Recommended Locality Payments . . . . . . . . . . . . . . . . . 18

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Federal White-Collar Pay:
FY2009 Salary Adjustments
Introduction
Federal white-collar employees1 paid under the General Schedule (GS), Foreign
Service Schedule, and certain Veterans Health Administration Schedules are intended
by law to receive an annual pay adjustment and a locality-based comparability
payment, effective in January of each year, under Section 529 of P.L. 101-509, the
Federal Employees Pay Comparability Act (FEPCA) of 1990.2 Although the annual
adjustment and the locality payment are sometimes referred to as cost-of-living
adjustments, neither is based on measures of the cost of living.
In January 2008, federal white-collar employees received an average 3.5% pay
increase allocated as a 2.5% annual adjustment and a 1.0% locality payment. Not all
employees received the full amount of the pay adjustment because of statutory
limitations on GS pay that correspond to Executive Schedule (EX) pay rates. Basic
pay cannot exceed EX Level V ($139,600, as of January 2008); basic pay and locality
pay combined cannot exceed EX Level IV ($149,000, as of January 2008); and total
compensation cannot exceed EX Level I ($191,300, as of January 2008).3 GS-15
employees at the upper end of that pay grade in 12 areas are currently affected by the
EX Level IV cap on basic pay and locality pay combined as shown below:
! employees at step 10 in the (1) Boston-Worcester-Manchester, MA-
RI-NH, Combined Statistical Area (CSA), plus Barnstable County,
MA, and Berwick, Eliot, Kittery, South Berwick, and York towns in
York County, ME; (2) Chicago-Naperville-Michigan City, IL-IN-
WI, CSA; (3) Denver-Aurora-Boulder, CO, CSA, plus the Ft.
Collins-Loveland, CO, MSA; (4) Detroit-Warren-Flint, MI, CSA,
1 This report does not cover salary adjustments for federal executive and judicial branch
officials, federal justices and judges, Members of Congress, or the United States Postal
Service. See CRS Report RL33245, Legislative, Executive, and Judicial Officials: Process
for Adjusting Pay and Current Salaries, by Barbara L. Schwemle; CRS Report RS20388,
Salary Linkage: Members of Congress and Certain Federal Executive and Judicial
Officials, by Barbara L. Schwemle; and CRS Report RL33128, Senior Executive Service
(SES) Pay for Performance System, by L. Elaine Halchin. See also, CRS Report 97-615,
Salaries of Members of Congress: Congressional Votes, 1990-2008, by Ida A. Brudnick;
CRS Report 97-1011, Salaries of Members of Congress: A List of Payable Rates and
Effective Dates, 1789-2008, by Ida A. Brudnick; and CRS Report RL30064, Congressional
Salaries and Allowances, by Ida A. Brudnick.
2 104 Stat. 1389, at 1427.
3 5 U.S.C. §5303(f), 5 U.S.C. §5304(g)(1), and 5 U.S.C. §5307(a)(1).

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plus Lenawee County, MI; (5) Sacramento - Arden-Arcade - Yuba
City, CA-NV, CSA, plus Carson City, NV; (6) San Diego-Carlsbad-
San Marcos, CA, MSA; and (7) Washington-Baltimore-Northern
Virginia, DC-MD-VA-WV, CSA, plus the Hagerstown-Martinsburg,
MD-WV, MSA, the York-Hanover-Gettysburg, PA, CSA, and King
George County, VA.
! employees at steps 9 and 10 in the (1) Hartford-West Hartford-
Willimantic, CT, CSA, plus the Springfield, MA, MSA and New
London County, CT; (2) Los Angeles-Long Beach-Riverside, CA,
CSA, plus the Santa Barbara-Santa Maria-Goleta, CA, MSA and
Edwards Air Force Base, CA; and (3) New York-Newark-
Bridgeport, NY-NJ-CT-PA, CSA, plus Monroe County, PA, and
Warren County, NJ;
! employees at steps 8, 9, and 10 in the Houston-Baytown, Huntsville,
TX, CSA;
! employees at steps 7, 8, 9, and 10 in the San Jose-San Francisco-
Oakland, CA, CSA, plus the Salinas, CA, MSA and San Joaquin
County, CA.4
FEPCA has never been implemented as originally enacted. The annual pay
adjustment was not made in 1994; in 1995, 1996, and 1998, reduced amounts of the
annual adjustments were provided. For 1995 through 2008, reduced amounts of the
locality payments were provided. Table 1 (at the end of this report) shows the annual
and locality pay adjustments made under FEPCA for the years 1991 to 2008.5
Pay Adjustments
Annual Pay Adjustment
Federal white-collar employees, including those paid under the General
Schedule, usually receive an annual pay adjustment. The President also may annually
adjust salaries of administrative law judges. Individuals in senior-level (SL) and
scientific and professional (ST) positions may receive the annual adjustment at the
4 For an analysis of the pay cap, see CRS Report RL34380, The Executive Schedule IV Pay
Cap on General Schedule Compensation, by Curtis W. Copeland.
5 For the 2008 salary adjustments, see CRS Report RL33732, Federal White-Collar Pay:
FY2008 Salary Adjustments, by Barbara L. Schwemle.

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discretion of agency heads.6 Annual adjustments for contract appeals board members
depend on whether EX7 pay is adjusted.
FEPCA requires the annual pay adjustment for GS employees to be based on the
Employment Cost Index (ECI), which measures change in private-sector wages and
salaries. Basic pay rates are to be increased, beginning the first full pay period of a
calendar year, by an amount that is 0.5 percentage points less than the percentage by
which the ECI, for the quarter ending September 30 of the year before the preceding
calendar year, exceeds the ECI for the comparable quarter of the next preceding year
(if at all). For example, the annual adjustment for January 2008 is determined by
comparing the ECI for the quarter ending September 30, 2006, with the ECI for the
quarter ending September 30, 2005. The change in the ECI from the earlier
September 30 (3.0%) is reduced by 0.5 percentage points, thereby yielding a 2.5%
annual adjustment. Therefore, the data used to calculate the annual adjustment are
15 months old at the time of the adjustment.
In the event of a national emergency or serious economic conditions affecting
the general welfare, FEPCA authorizes the President to issue an alternative pay plan
that uses a different percentage increase from the one required by the ECI-based
formula. The alternative plan must be submitted to Congress by September 1
preceding the scheduled effective date.8 The President did not issue an alternative
plan for the January 2009 annual pay adjustment.
Locality-Based Comparability Payments9
GS employees are also intended to receive locality-based comparability
payments.10 The Pay Agent11 may also extend these payments to employees in other
6 According to 5 U.S.C. §5376, the minimum rate of basic pay for SLs and STs is equal to
120% of the minimum rate of basic pay for GS-15; the maximum rate of basic pay for SLs
and STs is equal to level IV of the Executive Schedule.
7 The EX schedule is the pay schedule for cabinet officers and other top government
officials. It has five levels of pay in 2008 as follow: EX I-$191,300, EX II-$172,200, EX
III-$158,500, EX IV-$149,000, and EX V-$139,600.
8 104 Stat. 1389, at 1429-1431; 5 U.S.C. §§5301-5303.
9 A locality rate of pay is considered as basic pay in computing danger pay allowances and
post differentials (and for purposes of calculating retirement annuities) for certain
employees who are temporarily assigned to foreign areas and for whom the Department of
State has established allowances for danger. See 5 C.F.R. 531.610 for other purposes for
which locality rates are treated as basic pay. (U.S. Office of Personnel Management,
“Locality-Based Comparability Payments,” Federal Register, vol. 69, August 5, 2004, pp.
47353-47354. U.S. Office of Personnel Management, “Changes in Pay Administration
Rules for General Schedule Employees,” Federal Register, vol. 70, May 31, 2005, pp.
31279-31280, 31305.)
10 Blue-collar workers under the Federal Wage System (FWS) receive a prevailing rate
adjustment that is generally capped at the average percentage pay adjustment received by
federal white-collar employees. For FY2008, this provision is at Section 712 of P.L. 110-
161, the Consolidated Appropriations Act for FY2008. The House and Senate versions of
(continued...)

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pay systems and has done so for employees in the Foreign Service and in senior-
level, scientific and professional, administrative law judge, administrative appeals
judge, and contract appeals board member positions.12 The Pay Agent determines the
applicable pay cap level for certain non-General Schedule employees to whom
locality pay is extended.13 The Office of Personnel Management (OPM) published
final regulations in December 2001 to clarify and redefine the limitations.14
Among other groups of employees, GS special-rate employees receive either the
special rate supplement or the locality payment, whichever is higher. Law
enforcement officers receiving special rates under Section 403 of FEPCA receive
both special rates and locality pay. White-collar federal employees in Alaska,
10 (...continued)
the Financial Services and General Government Appropriations Act for FY2009 (Section
710 of the draft House bill and S. 3260) would have continued this provision. P.L. 110-329,
enacted on September 30, 2008, which provides funds for government operations from
October 1, 2008, through March 6, 2009, does not include the provision. Notwithstanding
the cap, the blue-collar pay adjustment in most locations is no less than the increase received
by GS employees in that location. Blue-collar workers in Alaska, Hawaii, and certain other
non-foreign areas receive a pay adjustment that is no less than the increase received by GS
employees in the Rest of the United States (RUS) pay area. For FY2008, this provision is
at Section 740(b) of P.L. 110-161, the Consolidated Appropriations Act for FY2008. The
House and Senate versions of the Financial Services and General Government
Appropriations Act for FY2009 (Section 737(b) of the draft House bill and Section 738(b)
of S. 3260) would have continued this provision. P.L. 110-329 includes the provision at
Division A, Section 142(b).
11 The Pay Agent comprises the Secretary of Labor (Elaine L. Chao), the Director of the
Office of Management and Budget (Jim Nussle), and the Director of the Office of Personnel
Management (Michael W. Hager (Acting)).
12 The President, by Executive Order, delegated to the Pay Agent the authority to extend
locality-based comparability payments to certain categories of positions not otherwise
covered. U.S. President (Clinton), “Delegating a Federal Pay Administration Authority,”
Executive Order 12883, Federal Register, vol. 58, December 1, 1993, p. 63281.
13 The President, by Executive Order, delegated to the Pay Agent the authority to determine
the applicable pay cap level for certain non-General Schedule employees to whom locality
pay is extended. U.S. President (Clinton), “Adjustments of Certain Rates of Pay and
Delegation of a Federal Pay Administration Authority,” Executive Order 13106, Federal
Register, vol. 63, December 9, 1998, p. 68152.
14 The regulations stated the following: “To provide consistent treatment between General
Schedule (GS) and non-GS employees receiving locality payments, OPM proposes to
provide that (1) non-GS positions whose maximum scheduled annual rate of pay is less than
or equal to the maximum payable scheduled annual rate of pay for GS-15 will be subject to
a locality pay cap equal to the rate for level IV of the Executive Schedule, and (2) non-GS
positions whose maximum scheduled annual rate of pay exceeds the maximum payable
scheduled annual rate of pay for GS-15, but is not more than the rate for level IV of the
Executive Schedule, will be subject to a locality pay cap equal to the rate for level III of the
Executive Schedule.” U.S. Office of Personnel Management, “Locality-Based
Comparability Payments,” Federal Register, vol. 65, March 24, 2000, pp. 15875-15877.
U.S. Office of Personnel Management, “Locality-Based Comparability Payments,” Federal
Register, vol. 66, December 28, 2001, pp. 67069-67070.

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Hawaii, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin
Islands receive a non-foreign cost-of-living (COLA) allowance ranging from 10.5%
to 25%, rather than locality pay. Civilian employees of the Department of Defense
who are covered by the National Security Personnel System (non-bargaining unit
employees) receive a pay adjustment made up of a performance-based pay increase,
an adjustment to base salary, and a local market supplement that is equivalent to GS
pay.15
The locality-based comparability payments procedure established by FEPCA
provides that payments are to be made within each locality determined to have a non-
federal/federal pay disparity greater than 5%. When uniformly applied to GS
employees within a locality, the adjustment is intended to make their pay rates
substantially equal, in the aggregate, to those of non-federal workers for the same
levels of work in the same locality.
FEPCA authorizes the President to fix an alternative level of locality-based
comparability payments if, because of a national emergency or serious economic
conditions affecting the general welfare, the President considers the level that would
otherwise be payable inappropriate. At least one month before these comparability
payments would be payable (by November 30, 2008, for the 2009 payment), the
President would have to prepare and transmit to Congress a report describing the
intended alternative level of payments, including the reasons why the alternative level
would be necessary.16
Once the annual and locality pay percentage amounts are determined, the actual
pay rates are calculated in the following way. First, the basic General Schedule (GS)
is increased by the annual adjustment percentage, resulting in a new GS schedule.
These new basic GS rates are then increased by the locality payments. For 2009, the
resulting pay rates (annual + locality) are compared with the 2008 pay rates (annual
+ locality) to derive the net increases in pay. According to OPM, the net increase is
calculated using this formula: 1 plus the new local rate divided by one plus the old
local rate times the percentage for the across-the-board increase minus 1 times 100.
Methodology for Determining the Locality-Based Comparability
Payments. Under the law, the Bureau of Labor Statistics (BLS) conducts surveys
that document non-federal rates of pay in each locality pay area. (In January 2009,
there will be 32 pay areas nationwide.) Prior to October 1996, the surveys were
conducted under the Occupational Compensation Survey Program (OCSP), which
had been approved by the Federal Salary Council17 and the Pay Agent. Since then,
15 In January 2008, the average pay adjustment under the National Security Personnel
System was 7.6%, resulting from an average 5.9% salary adjustment and an average 1.7%
bonus.
16 104 Stat. 1389, at 1429-1436, as amended by 106 Stat. 1355-1356 and 1360; 5 U.S.C.
§§5301-5302 and §§5304-5304a.
17 The council includes nine members. Members generally recognized for their impartiality,
knowledge, and experience in labor relations and pay policy are Terri Lacy, chair; George
Nesterczuk, vice-chair; and Rudy J. Maestas. The other members represent the American
(continued...)

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the surveys have been conducted under the National Compensation Survey (NCS)
program. The NCS results, however, were not approved for use with the January
2000 through January 2003 locality payments. In its memorandum to the Pay Agent
on the January 2001 locality payments, the council recommended five improvements
in the NCS program.18 For the January 2004 through January 2006 locality
payments, a phase-in of NCS survey data was approved.19 The Federal Salary
Council recommended that 100% of the NCS data be used beginning with the
January 2007 locality payments.
Four of the improvements to the NCS survey have been fully implemented. The
fifth enhancement, on the use of four factors to assign the correct federal grade level
to non-federal jobs, will not be fully implemented for an estimated three years.
According to the council’s memorandum on the January 2009 locality payments,
“The average pay gap was about 6 points higher in 2007 than in 2006,” and the gaps
in all locality pay areas, except for Dayton, OH,20 increased. The Huntsville, AL, and
Washington, DC-Baltimore, MD, locality pay areas showed the largest increases in
the pay gap from 2006 to 2007; +12.33% and +9.72, respectively. The council stated
that “This likely means the new survey methods tend to match survey jobs to lower
General Schedule grades.”21
17 (...continued)
Federation of Government Employees (J. David Cox); the National Treasury Employees
Union (Colleen M. Kelley); the National Federation of Federal Employees (Richard N.
Brown); the Association of Civilian Technicians (Thomas G. Bastas); and the Fraternal
Order of Police (James Pasco).
18 These recommendations, endorsed by the Pay Agent, were that (1) four factors, rather than
nine, be used to assign the correct federal grade levels to the non-federal jobs surveyed, and
grade level guides for occupational families be provided; (2) a model be developed to
estimate missing data; (3) the matching of federal survey jobs with non-federal survey jobs
be improved, and subcategories be provided for occupations that are not elsewhere
classified; (4) for supervisory occupations, the highest level of work supervised be graded
and the grade level be adjusted based on the level of supervision, instead of grading the
supervisory job itself; and (5) criteria be developed to identify and exclude jobs that would
be classified above GS-15 in government. (Memorandum for the President’s Pay Agent
from the Federal Salary Council, Level of Comparability Payments for January 2001 and
Other Matters Pertaining to the Locality Pay Program [Washington: October 22, 1999],
p. 8.)
19 For the January 2004 locality payments, equal weights of 50% were applied to the NCS
and OCSP results. For January 2005, weights of 75% and 25% were applied to the NCS and
OCSP results, respectively. Weights of 90% NCS and 10% OCSP were applied for January
2006.
20 The council stated that the decrease in the pay gap for Dayton, OH, primarily resulted
from the conversion of civilian employees at the Department of Defense from the General
Schedule to the National Security Personnel System, thereby removing the employees from
the pay comparisons that underlie the locality-based comparability payments.
21 Memorandum for the President’s Pay Agent from the Federal Salary Council, Level of
Comparability Payments for January 2009 and Other Matters Pertaining to the Locality
Pay Program (Washington: October 25, 2007), p. 3. (Hereafter referred to as Federal
Salary Council Memorandum for January 2009.)

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As requested by the council, the BLS surveys provided pay data both by
establishments of all sizes and by establishments with fewer than 50 employees
(referred to as small establishments). The council reported that the inclusion of the
data from the small establishments “increases the number of non-Federal employees
represented by the data by more than 25 percent” and had a “modest” impact on the
pay gaps. While not ruling out the possibility that data from small establishments
could be used in the future, the council recommended that the data not be used in
calculating locality payments for 2009, and that they “be reviewed again next year
before making a decision” on its use. In making the recommendation, the council
acknowledged that “some Council members have expressed concerns about how well
jobs in small establishments match Federal jobs.”22 Since 1994, when locality pay
was implemented, the BLS surveys have included data only from establishments with
50 or more workers.
The BLS survey results are submitted to the Office of Personnel Management
(OPM), which serves as the staff to the Federal Salary Council and the Pay Agent.
OPM documents federal rates of pay in each of the pay areas and compares non-
federal and GS salaries, by grade, for each pay area. The average salaries at each
grade, both federal and non-federal, are then aggregated and compared to determine
an overall average percentage pay gap for each area. By law, the disparity between
non-federal and federal salaries is to be reduced to 5%. Therefore, the overall
average percentage pay gap for each pay area is adjusted annually to this level by
OPM. This adjusted gap, called the target gap, is used to determine the locality rates
for each pay area recommended to the President by the Pay Agent, after receiving
advice from the Federal Salary Council. The pay gaps on which the locality
payments are based are 22 months old by the effective date of the adjustment; thus,
March 2007 gaps determine the January 2009 locality payments.
FEPCA also stipulates that a certain percentage of the target gap between GS
average salaries and non-federal average salaries in each pay area is to be closed each
year. Twenty percent of the gap was closed in 1994, the first year of locality pay, as
authorized by FEPCA. An additional 10% of the gap was to be closed each year
thereafter, meaning that 30% of the gap was to be closed in 1995, 40% in 1996, 50%
in 1997, 60% in 1998, 70% in 1999, 80% in 2000, and 90% in 2001. By January
2002, and continuing each year thereafter, FEPCA specified that amounts payable
could not be less than the full amounts necessary to reduce the pay disparity of the
target gap to 5%. In each of the years since 1994, the locality pay increase has been
implemented at a much lower percentage than the law requires. As a result, the gap
is being reduced slowly; 23.5% of the gap was closed in 1995, 25.9% in 1996, 28.3%
in 1997, 29.2% in 1998, 31% in 1999, 33.5% in 2000, 38.1% in 2001, 42.3% in
2002, 44% in 2003, 53.7% in 2004, 58.8% in 2005, 62.7% in 2006, 69.8% in 2007,
and 58.3% in 2008.
22 Ibid., p. 2.

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Evaluating Areas in the Vicinity of Locality Pay Areas. To evaluate
areas currently in the “Rest of the United States” pay area for possible inclusion in
adjacent locality pay areas, the following criteria23 apply:
For adjacent Metropolitan Statistical Areas (MSAs) and Combined
Statistical Areas (CSAs): To be included in an adjacent locality pay area, an
adjacent MSA or CSA currently in the RUS locality pay area must have at least
1,500 GS employees and an employment interchange measure24 of at least 7.5%.
For adjacent counties that are not part of a multi-county MSA or CSA: To
be included in an adjacent locality pay area, an adjacent county that is currently
in the RUS locality pay area must have at least 400 GS employees and an
employment interchange measure of at least 7.5%.
For federal facilities that cross locality pay area boundaries: To be included
in an adjacent locality pay area, the whole facility must have at least 500 GS
employees, with the majority of those employees in the higher-paying locality
pay area, or that portion of a federal facility outside a higher-paying locality pay
area must have at least 750 GS employees; the duty stations of the majority of
these employees must be within 10 miles of the separate locality pay area; and
a significant number of these employees must commute to work from the higher-
paying locality pay area.25
Areas already included in a locality pay area through an application of the
criteria are not subject to further review.
Requests for Changes in Locality Pay Area Boundaries. To be
considered by the council, requests for changes in the boundaries of locality pay areas
must include the following information:
! credentials of the requesting group that establish how the group
represents GS employees in the area;
! identification of the geographic area covered by the proposal;
23 Report on Locality-Based Comparability Payments for the General Schedule, Annual
Report of the President’s Pay Agent (Washington: December 2003), p. 19.
24 The council recommended that commuting rates be calculated using the employment
interchange measure, which is defined by the Office of Management and Budget as “A
measure of the ties between two adjacent entities.” It is “the sum of the percentage of
employed residents of the smaller entity who work in the larger entity and the percentage
of the employment in the smaller entity that is accounted for by workers who reside in the
larger entity.” (Memorandum for the President’s Pay Agent from the Federal Salary Council,
Level of Comparability Payments for January 2005 and Other Matters Pertaining to the
Locality Pay Program [Washington: October 28, 2003], p. 7. [Hereafter referred to as
Federal Salary Council Memorandum for January 2005.])
25 Memorandum for the President’s Pay Agent from the Federal Salary Council, Level of
Comparability Payments for January 2007 and Other Matters Pertaining to the Locality
Pay Program [Washington: October 21, 2005], p. 5, and Report on Locality-Based
Comparability Payments for the General Schedule, Annual Report of the President’s Pay
Agent [Washington: December 2005], p. 13.

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! the number of GS employees in the area, by agency;
! a detailed explanation of why the area should be added to the
adjacent locality pay area;
! current job vacancy rates in the area for GS positions;
! documentation of recruitment or retention problems for GS
employees in the area;
! documentation that agencies have tried other pay flexibilities,
including requests for special salary rates and use of recruitment,
retention, and relocation payments, and that these flexibilities did
not solve recruitment and retention problems;
! an indication that the headquarters of affected agencies know about
and support the request;
! distance measures, by road, between the requesting area and the
locality pay area;
! a summary of transportation facilities linking the requesting area and
the locality pay area, including commuter rail or other mass transit
facilities; and
! agency organizational relationships between activities covered by the
proposal and activities in another locality pay area.26
January 2009 Pay Adjustment
Annual Pay Adjustment
Recent ECI data indicate that the annual across-the-board pay adjustment in
January 2009 should be 2.9%. This figure reflects the September 2006 to September
2007 change in private-sector wages and salaries of 3.4%, minus 0.5%.27
Locality-Based Comparability Payments
The Federal Salary Council reported that as of March 2007, the overall gap
between GS average salaries (excluding existing locality payments, special rates, and
certain other payments) and non-federal average salaries was 43.73%.28 The amount
26 Federal Salary Council Memorandum for January 2005, p. 10.
27 U.S. Department of Labor, Bureau of Labor Statistics, Employment Cost Index —
September 2007 (Washington: October 31, 2007), pp. 2, 14.
28 The calculation of the overall average pay gap excludes the locality payments made in
(continued...)

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CRS-10
needed to reduce this disparity to 5%, as mandated by FEPCA, averages 36.89% for
2009. To meet the target for closing the pay gap, the council recommends locality
pay raises ranging from 23.40% in the “Rest of the United States” (RUS) pay area to
59.65% in the San Jose-San Francisco pay area. The payment recommended for the
Washington, DC, pay area is 53.94%.29 Because the new locality rates replace the
existing locality rates, the rate change is derived by comparing 2008 locality
payments with those recommended for 2009. This comparison results in
recommended net increases for 2009, if the ECI and locality-based comparability
payments were granted as required by law, of 12.19% in the RUS pay area, 23.96%
in the San Jose-San Francisco pay area, and 31.03% in the Washington, DC, pay
area. The nationwide average net pay increase, if the ECI and locality-based
comparability payments were granted as required by law, would be 19.24% in 2009.
The council recommended that the 32 locality pay areas recommended for 2008
continue in 2009. In not recommending any new pay areas, the council noted that,
were new areas to be proposed, criteria for their establishment would have to be
developed and the BLS would need additional funding. According to the council,
“BLS has indicated that, based on its current funding and resources, it cannot expand
its current NCS program to increase samples in existing locality pay areas or to cover
more areas.30 The pay gaps in Louisville, KY, Austin, TX, and Memphis, TN, will
continue to be reviewed as the BLS continues the redesign of the salary survey. The
council’s memorandum on the 2009 locality payments found that the pay gap in
Louisville, KY, was 0.33 points above the pay gap in RUS, while the pay gaps in
Austin, TX, and Memphis, TN, were below that in RUS by 1.56 and 3.65 points,
respectively.31
The memorandum also noted the pay gaps in Anchorage, AK (54.96%), and
Honolulu, HI (41.72%), and that the BLS plans to conduct future surveys in
Honolulu, but not Anchorage. On May 30, 2007, OPM submitted a legislative
proposal to Congress that would gradually replace the cost-of-living allowance
currently paid in the non-foreign areas (Alaska, Hawaii, Guam, Puerto Rico, the
Northern Mariana Islands, and the U.S. Virgin Islands) with locality pay. The
legislation has not been introduced. The council recommended that, were the
legislation to be enacted, BLS reinstate the Anchorage survey and “ensure that both
the Anchorage and Honolulu surveys are as robust as feasible.”32
After considering the council’s recommendations, the Pay Agent endorsed them
in its December 6, 2007, annual report to the President on the 2009 locality
payments. The Pay Agent stated that, “Given the current national emergency,
28 (...continued)
2007. The average locality rate paid in 2007 was 16.88%; the overall average pay gap in
2006 was 22.97%.
29 Federal Salary Council Memorandum for January 2009, p. 3 and Attachment 3.
30 Ibid., p. 6.
31 Ibid., pp. 4-5.
32 Ibid., p. 9.

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CRS-11
however, ... it would be unwise to allow the locality pay increases shown in [its]
report to take effect in January 2009.”33
The Pay Agent estimated that the cost of the January 2009 locality-based
comparability payments would be about $12.1 billion if the full amount necessary to
reduce the pay disparity of the target gap to 5% were provided in January 2009 as
required by FEPCA.34 Table 2 shows the council’s and the Pay Agent’s
recommended locality payments for January 2009.
As for the improvements in the BLS National Compensation Survey (NCS)
Program, the Pay Agent noted that “four of the five NCS improvements are fully
incorporated into surveys used this year.”35 The Pay Agent agreed with the council’s
recommendations regarding the survey data from small establishments and that new
locality pay areas for 2009 not be designated.36
The Pay Agent reiterated that it “has serious concerns about the utility of a
process that requires a single percentage adjustment in the pay of all white-collar
civilian Federal employees in each locality pay area without regard to the differing
labor markets for major occupational groups or the performance of individual
employees” and “continue[s] to believe it is imperative to develop performance-
sensitive compensation systems.”37
A hearing conducted on June 26, 2008, by the House Subcommittee on Federal
Service, Postal Service, and the District of Columbia of the Committee on Oversight
and Government Reform included an examination of the federal locality pay
program. The subcommittee received testimony reiterating that FEPCA should be
fully implemented and recommending that the government consider initiatives that
would help federal employees in areas where housing costs are particularly high. For
example, the representative for the American Federation of Government Employees
(AFGE) recommended that
the federal government begin to provide a variety of housing assistance
programs, under well-defined circumstances. We propose pilot programs that
would address the particularly acute problems faced by federal employees and
agencies in counties with median house prices that are at least 25% above the
median house price within a locality.... In addition ... agencies should be able to
provide lump sum housing allowances equivalent to those provided to the
military.38
33 Report on Locality-Based Comparability Payments for the General Schedule, Annual
Report of the President’s Pay Agent (Washington: December 6, 2007).
34 Ibid., p. 21.
35 Ibid., p. 3.
36 Ibid., p. 13.
37 Ibid., cover letter.
38 Testimony of Jacqueline Simon, Public Policy Director, American Federation of
Government Employees, AFL-CIO, June 26, 2008, pp. 4-5.

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CRS-12
The President’s Recommendation
The President usually includes a proposal on the federal civilian pay adjustment
in the Budget of the United States issued in February of each year. The FY2009
budget included a proposed 2.9% pay adjustment for federal civilian employees.
This percentage is the overall average increase, including locality pay adjustments.39
(The President’s budget also included a proposed 3.4% pay raise for the uniformed
military.40 Division A, Title VI, Subtitle A, Section 601(b) of P.L. 110-417, the
Duncan Hunter National Defense Authorization Act for FY2009 (S. 3001), enacted
on October 14, 2008, provides a 3.9% pay adjustment for the uniformed military.)
As in the previous two fiscal years, the FY2009 budget states that OPM will
support pay-for-performance demonstration projects in the executive branch agencies
that would replace the General Schedule with a system for classification, pay, and
performance management that is modern, focused on results, and based on the
market.41 It does not provide any details on this initiative. No legislation is currently
pending in the 110th Congress to amend the annual and locality pay adjustment
process established under FEPCA.
Congressional Actions
The pay adjustment is considered annually by Congress, which may legislate an
adjustment that is different from the one recommended by the President or that might
be authorized by the President in an alternative plan. The January 1999, January
2000, and January 2002 through January 2006 overall pay adjustment amounts were
set by Congress.42 On January 30, 2008, 10 Members of Congress from the
Washington, DC, metropolitan area wrote a letter to President Bush asking him to
“embrace the principle of pay parity” between federal civilian employees and the
uniformed military. The Members stated that, “with many of our most experienced
employees poised to retire,” the ability “to recruit and retain quality employees” is
critical.43
39 U.S. Executive Office of the President, Office of Management and Budget, Budget of the
United States Government Fiscal Year 2009; Analytical Perspectives (Washington: GPO,
2008), p. 172
40 See CRS Report RL33446, Military Pay and Benefits: Key Questions and Answers, by
Charles A. Henning.
41 U.S. Executive Office of the President, Office of Management and Budget, Budget of the
United States Government Fiscal Year 2009; Appendix (Washington: GPO, 2008), p. 1097.
See also, CRS Report RL34529, Pay for Performance: Linking Employee Pay to
Performance Appraisal, by Wendy R. Ginsberg.
42 P.L. 105-277, P.L. 106-58, P.L. 107- 67, P.L. 108-7, P.L. 108-199, P.L. 108-447, and P.L.
109-115, respectively, provided the pay adjustments but reserved to the President the
decision as to how the increases would be allocated between the annual and locality pay
adjustments.
43 The letter was signed by Representatives Elijah E. Cummings, Thomas M. Davis, III,
Steny H. Hoyer, James P. Moran, C.A. “Dutch” Ruppersberger, John P. Sarbanes, Chris Van
(continued...)

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CRS-13
The Concurrent Resolution on the Budget, which provides the framework within
which Congress subsequently considers spending legislation, has several times in the
past included language expressing the sense of Congress on the federal civilian pay
adjustment. The FY2009 budget resolution as agreed to by the House (H.Con.Res.
312) on March 13, 2008, by a 212-207 vote (Roll No. 141), includes such a provision
at Section 610 which states the Sense of the House that federal civilian pay should
be adjusted at the same time and in the same proportion as pay for the uniformed
military. The Senate’s version of the budget resolution (S.Con.Res. 70) as agreed to
by the Senate on March 14, 2008, by a 51-44 vote (No. 85), does not include such a
provision. The Senate Committee on the Budget report (S. Prt. 110-039) included
the views of Senator Susan Collins expressing her continued support for parity in the
pay adjustments for federal civilians and the uniformed military to ensure that
talented individuals are recruited and retained in public service.44 S.Con.Res. 70, as
agreed to by the House and Senate, includes the provision on parity between pay for
federal civilians and the uniformed military at Section 518.45
Financial Services and General Government Appropriations Act.
Any congressional recommendation on the pay adjustment has usually been included
in the appropriations bill which provides funding for the general government. In the
110th Congress this bill is called the Financial Services and General Government
Appropriations (FSGG) Bill. The House and Senate versions of the Financial
Services and General Government Appropriations Act for FY2009 (Section 737(a)
of the draft House bill and Section 738(a) of S. 3260) would have provided a 3.9%
pay adjustment for federal civilian employees, including civilian employees in the
Department of Homeland Security (DHS).46
43 (...continued)
Hollen, Frank R. Wolf, and Albert R. Wynn, and Delegate Eleanor Holmes Norton.
44 U.S. Congress, Senate Committee on the Budget, Concurrent Resolution on the Budget
FY2009, S. Prt. 110-039, 110th Cong., 2nd sess. (Washington: GPO, 2008), p. 169.
45 S.Con.Res. 70, Enrolled, June 5, 2008, as agreed to by the House and Senate, p. 46. See
also, U.S. Congress, Conference Committees, 2008, Concurrent Resolution on the Budget
for Fiscal Year 2009, conference report to accompany S.Con.Res. 70, 110th Cong., 2nd sess.,
H.Rept. 110-659 (Washington: GPO, 2008), p. 47. The Senate agreed to the conference
report on a 48-45 (Record No. 142) vote on June 4, 2008. The House agreed to the
conference report on a 214-210 (Roll No. 382) vote on June 5, 2008.
46 U.S. Congress, House Committee on Appropriations, Financial Services and General
Government Appropriations Bill, 2009, draft report to accompany draft bill, p. 107
(provided to CRS by the subcommittee). The House Subcommittee on Financial Services
and General Government marked up the bill and forwarded it to the full committee by voice
vote on June 17, 2008. The Committee on Appropriations marked up the bill and ordered
it reported by voice vote on June 25, 2008. U.S. Congress, Senate Committee on
Appropriations, Financial Services and General Government Appropriations Bill, 2009,
report to accompany S. 3260, 110th Cong., 2nd sess., S.Rept. 110-417 (Washington: GPO,
2008), p. 124. The Senate Subcommittee on Financial Services and General Government
marked up the bill and forwarded it to the full committee by a 9-0 roll call vote on July 9,
2008. The Committee on Appropriations marked up the bill and ordered it reported by a 29-
0 roll call vote on July 10, 2008, and reported S. 3260 on July 14, 2008.

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CRS-14
Continuing Appropriations. Division A of P.L. 110-329, the Consolidated
Security, Disaster Assistance, and Continuing Appropriations Act, 2009 (H.R. 2638),
enacted on September 30, 2008, provides funds for government operations from
October 1, 2008, through March 6, 2009.47 Division A, Section 142(a) of the law
provides a 3.9% pay adjustment for federal civilian employees, including DHS
employees. The pay increase will become effective on the first day of the first
applicable pay period beginning after January 1, 2009. The law provides that the pay
raise will be paid from the appropriations for salaries and expenses made to each
department and agency for FY2009 (Section 142(c)). These provisions apply
notwithstanding any other provision of the joint resolution (Section 142(d)).
The President will allocate the pay raise between an annual (basic) adjustment
and a locality pay adjustment. (Individuals who are paid under the schedules for
senior-level (SL) and scientific or professional (ST), and Senior Executive Service
(SES) positions do not receive locality pay.) Because he did not submit an alternative
plan to Congress on the annual adjustment, that portion of the pay increase must be
2.9%. Any alternative plan on the locality pay adjustment must be submitted to
Congress by the President by November 30, 2008. The Federal Salary Council, in
its October 14, 2008, report to the Pay Agent recommended “that funds allocated for
locality pay raises be distributed so that locations with the largest pay gaps receive
the largest increases and that employees in each locality pay area receive at least
some portion of the locality pay funds, after payment of an across-the-board increase
of at least 2.9%.”48 OPM advised CRS on October 3, 2008, that the allocation of the
increase may not be publicly available until the President’s executive order on pay,
which has generally been issued at the end of December each year.
Legislation Related to Pay
Legislation (S. 1045) that would require federal employees to receive a
summary performance rating of at least fully successful to receive a pay adjustment
is pending in the 110th Congress. A bill (S. 1046) to increase the limitation on basic
pay for senior-level and scientific and professional positions passed the Senate and
the House of Representatives and became P.L. 110-372 on October 8, 2008.
Performance Appraisal. On March 29, 2007, Senator George Voinovich,
Ranking Member of the Senate Homeland Security and Governmental Affairs’
Subcommittee on Oversight of Government Management, the Federal Workforce,
47 Section 106 of P.L. 110-329 provides that, “Unless otherwise provided for in this joint
resolution or in the applicable appropriations Act for fiscal year 2009, appropriations and
funds made available and authority granted pursuant to this joint resolution shall be
available until whichever of the following first occurs: (1) the enactment into law of an
appropriation for any project or activity provided for in this joint resolution; (2) the
enactment into law of the applicable appropriations Act for fiscal year 2009 without any
provision for such project or activity; or (3) March 6, 2009.”
48 U.S. Federal Salary Council, Memorandum for the President’s Pay Agent, Level of
Comparability Payments for January 2010 and Other Matters Pertaining to the Locality
Pay Program, October 14, 2008, pp. 10-11.

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CRS-15
and the District of Columbia, introduced S. 1045, the Federal Workforce
Performance Appraisal and Management Improvement Act of 2007. (He introduced
similar legislation, S. 3492, in the 109th Congress.) It was referred to the Senate
Committee on Homeland Security and Governmental Affairs. No further action on
the bill has occurred. Among other provisions, the bill would require agencies to
establish one or more performance appraisal systems having at least three summary
rating levels — unacceptable, fully successful, and above fully successful; make it
mandatory that managers and supervisors receive training in performance
management; and require agencies to establish comprehensive management
succession programs providing training to develop employees to become managers.
S. 1045 also would require an employee to receive a summary performance rating of
at least fully successful to receive a within-grade increase, an annual pay adjustment,
a locality pay adjustment, a special rate, or a prevailing rate (blue-collar) adjustment.
Agencies would be required to provide employees with annual performance
evaluations in writing.
Basic Pay Limitation for Senior-Level (SL) and Scientific or
Professional (ST) Positions. Senator Voinovich also introduced S. 1046, the
Senior Professional Performance Act of 2008, on March 29, 2007. (In the 109th
Congress, similar provisions were included in S. 3492 at Section 6.) In his statement
upon introducing the bills, Senator Voinovich stated that “employees should receive
annually a rigorous evaluation” with pay determined “by the productivity,
effectiveness, and the contributions of an employee.” He stated that the amendments
proposed in S. 1046 would keep SL and ST employees “on equal footing” with
members of the Senior Executive Service in terms of pay and performance
management.49 The bill was referred to the Senate Subcommittee on Oversight of
Government Management, the Federal Workforce, and the District of Columbia of
the Committee on Homeland Security and Governmental Affairs. It was marked up
and ordered reported without amendment by the full committee on June 13, 2007.
The committee reported S. 1046, without amendment, on April 22, 2008 (S.Rept.
110-328).50 During Senate consideration of the bill, a substitute amendment offered
by Senator Voinovich was agreed to and the Senate passed S. 1046 by unanimous
consent on July 11, 2008.51 The bill as passed by the Senate was referred to the
House Committee on Oversight and Government Reform on July 14, 2008. The
Congressional Budget Office estimated that implementation of S. 1046 would cost
“roughly $7 million between 2008 and 2012.”52 The House of Representatives
passed S. 1046 under suspension of the rules on a 419 to 0 (Roll No. 659) vote on
September 26, 2008. During the House debate, Representative Christopher Shays
stated that “the purpose of the bill is to align the pay system for ... [SL’s and ST’s]
49 Statement of Senator George Voinovich, Congressional Record, daily edition, vol. 153,
March 29, 2007, p. S4180.
50 U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs,
Senior Professional Performance Act of 2007, report to accompany S. 1046, 110th Cong.,
2nd sess. (Washington: GPO, 2008).
51 Congressional Record, daily edition, vol. 154, July 11, 2008, pp. S6609-S6610.
52 U.S. Congressional Budget Office, Cost Estimate, S. 1046 Senior Professional
Performance Act of 2007, September 12, 2007.

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CRS-16
with that of the Senior Executive Service Members.”53 President Bush signed the bill
on October 8, 2008, and it became P.L. 110-372.
Among other provisions, the law amends 5 U.S.C. §5376(b)(1)(B) to provide
that SL and ST employees in agencies whose performance appraisal systems have
been certified by OPM as making meaningful distinctions in performance, may
receive basic pay up to Level II of the Executive Schedule ($172,200, as of January
2008). In agencies whose performance appraisal systems have not been so certified
by OPM, SL and ST employees may receive basic pay up to Level III of the
Executive Schedule ($158,500, as of January 2008). SL and ST employees will not
receive locality pay. According to OPM, guidance on implementing the law will be
provided to departments and agencies and the provisions will become effective on
April 12, 2009.
53 Congressional Record, daily edition, September 25, 2008, p. H9884.

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CRS-17
Table 1. Annual and Locality Pay Adjustments
under FEPCA, 1991 to 2008
Locality
Net Increase,
ECI-Based
Locality
Payments
Annual and
Annual
Annual
Payments
Required
Locality Pay
Year
Adjustment
Adjustment
Authorized
by FEPCA
(National
Required by
Authorized
(National
(National
Average,
FEPCA
Average)
Average)
Weighted)
1991
—
4.1%
—
—
4.1%
1992
4.2%
4.2%
—
—
4.2%
1993
3.7%
3.7%
—
—
3.7%
1994
2.2%
0
3.95%
3.95%
3.95%
1995
2.6%
2.0%
6.44%
5.05%
3.08%
1996
2.4%
2.0%
8.58%
5.56%
2.49%
1997
2.3%
2.3%
11.29%
6.37%
3.09%
1998
2.8%
2.3%
14.30%
6.93%
2.84%
1999
3.1%
3.1%
16.95%
7.50%
3.65%
2000
3.8%
3.8%
20.62%
8.62%
4.89%
2001
2.7%
2.7%
23.12%
9.77%
3.76%
2002
3.6%
3.6%
25.92%
10.95%
4.72%
2003
3.1%
3.1%
27.59%
12.12%
4.21%
2004
2.7%
2.7%
25.71%
13.81%
4.24%
2005
2.5%
2.5%
25.51%
15.01%
3.54%
2006
2.1%
2.1%
25.85%
16.22%
3.19%
2007
1.7%
1.7%
24.15%
16.80%
2.24%
2008
2.5%
2.5%
31.02%
18.13%
3.58%
Sources: Locality-based comparability payments began in 1994. For the ECI-required annual adjustment, see
U.S. Department of Labor, Bureau of Labor Statistics, Employment Cost Index, September of each year. For
the locality payments required by FEPCA, see Report on Locality-Based Comparability Payments for the
General Schedule, Annual Report of the President’s Pay Agent, December of each year. For the annual and
locality pay adjustments authorized, see E.O. 12736, Dec. 12, 1990; E.O. 12786, Dec. 26, 1991; E.O. 12826,
Dec. 30, 1992; Presidential memorandum of Dec. 1, 1993; E.O. 12944, Dec. 28, 1994; E.O. 12984, Dec. 28,
1995; E.O. 13033, Dec. 27, 1996; E.O. 13071, Dec. 29, 1997; E.O. 13106, Dec. 7, 1998; E.O. 13144, Dec. 21,
1999; E.O. 13182, Dec. 23, 2000; E.O. 13249, Dec. 28, 2001; E.O.s 13282, Dec. 31, 2002, and 13291, Mar. 21,
2003; E.O.s 13322, Dec. 30, 2003, and 13332, Mar. 3, 2004; E.O. 13368, Dec. 30, 2004; E.O. 13393, Dec. 22,
2005; E.O. 13420, Dec. 21, 2006; and E.O. 13454, Jan. 4, 2008.

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CRS-18
Table 2. January 2009 Recommended Locality Payments
Pay Areas
2009 Recommended Locality Payments
Atlanta-Sandy Springs-Gainesville, GA-AL, CSA
35.99%
Boston-Worcester-Manchester, MA-RI-NH, CSA, plus
Barnstable County, MA, and Berwick, Eliot, Kittery,
44.42%
South Berwick, and York towns in York County, ME
Buffalo-Niagara-Cattaraugus, NY, CSA
30.66%
Chicago-Naperville-Michigan City, IL-IN-WI, CSA
42.73%
Cincinnati-Middletown-Wilmington, OH-KY-IN, CSA
25.44%
Cleveland-Akron-Elyria, OH, CSA
32.71%
Columbus-Marion-Chillicothe, OH, CSA
28.02%
Dallas-Fort Worth, TX, CSA
36.81%
Dayton-Springfield-Greenville, OH, CSA
24.84%
Denver-Aurora-Boulder, CO, CSA, plus the Ft.
35.98%
Collins-Loveland, CO, MSA
Detroit-Warren-Flint, MI, CSA, plus Lenawee County,
37.92%
MI
Hartford-West Hartford-Willimantic, CT, CSA, plus
the Springfield, MA, MSA and New London County,
40.50%
CT
Houston-Baytown-Huntsville, TX, CSA
40.66%
Huntsville-Decatur, AL, CSA
32.54%
Indianapolis-Anderson-Columbus, IN, CSA, plus
24.27%
Grant County, IN
Los Angeles-Long Beach-Riverside, CA, CSA, plus
the Santa Barbara-Santa Maria-Goleta, CA, MSA and
43.90%
Edwards Air Force Base, CA
Miami-Fort Lauderdale-Pompano Beach, FL, MSA,
35.55%
plus Monroe County, FL
Milwaukee-Racine-Waukesha, WI, CSA
30.53%
Minneapolis-St. Paul-St. Cloud, MN-WI, CSA
33.29%
New York-Newark-Bridgeport, NY-NJ-CT-PA, CSA,
50.28%
plus Monroe County, PA, and Warren County, NJ
Philadelphia-Camden-Vineland, PA-NJ-DE-MD,
CSA, plus Kent County, DE, Atlantic County, NJ, and
36.76%
Cape May County, NJ
Phoenix-Mesa-Scottsdale, AZ, MSA
34.81%
Pittsburgh-New Castle, PA, CSA
28.84%
Portland-Vancouver-Beaverton, OR-WA, MSA, plus
33.56%
Marion County, OR, and Polk County, OR
Raleigh-Durham-Cary, NC, CSA, plus the
Fayetteville, NC, MSA, the Goldsboro, NC, MSA, and
25.23%
the Federal Correctional Complex, Butner, NC

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CRS-19
Pay Areas
2009 Recommended Locality Payments
Richmond, VA, MSA
25.92%
Sacramento - Arden-Arcade - Yuba City, CA-NV,
39.35%
CSA, plus Carson City, NV
San Diego-Carlsbad-San Marcos, CA, MSA
43.49%
San Jose-San Francisco-Oakland, CA, CSA, plus the
59.65%
Salinas, CA, MSA and San Joaquin County, CA
Seattle-Tacoma-Olympia, WA, CSA, plus Whatcom
39.35%
County, WA
Washington-Baltimore-Northern Virginia, DC-MD-
VA-WV, CSA, plus the Hagerstown-Martinsburg,
53.94%
MD-WV, MSA, the York-Hanover-Gettysburg, PA,
CSA, and King George County, VA
Rest of the U.S. (RUS)
23.40%
Average
36.89%
Sources: Memorandum for the President’s Pay Agent from the Federal Salary Council, Level of Comparability
Payments for January 2009 and Other Matters Pertaining to the Locality Pay Program (Washington: October 25,
2007), Attachment 3. Report on Locality-Based Comparability Payments for the General Schedule, Annual Report of
the President’s Pay Agent (Washington: December 6, 2007), p. 18. MSA refers to a Metropolitan Statistical Area. CSA
refers to a Combined Statistical Area. The locality pay areas are listed at 5 C.F.R. §531.603. See also, U.S. Office of
Personnel Management, “Locality Pay Areas,” Federal Register, vol. 72, June 22, 2007, pp. 34361-34363.
Notes: The actual pay rates are calculated in the following way. First, the basic General Schedule (GS) is increased by
the annual adjustment percentage, resulting in a new GS schedule. The new basic GS rates are then increased by the
locality payments. The resulting pay rates (annual + locality) are compared with the pay rates (annual + locality) for the
previous year to derive the net increases in pay for the current year. According to OPM, the net increase is calculated
using this formula: 1 plus the new local rate divided by one plus the old local rate times 1.025 for the across-the-board
increase minus 1 times 100. For example, the calculation for 2008, in the Washington, DC, pay area, is 1.2089/1.1859
X 1.025 -1 X 100 = 4.49%. Salary tables for 2008 are available on the Internet at [http://www.opm.gov].

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