Federal Locality-Based Comparability Payments for General Schedule Employees

Federal Locality-Based Comparability Payments for General Schedule Employees

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Updated December 30, 2021
Federal Locality-Based Comparability Payments for General
Schedule Employees
The Federal Employees Pay Comparability Act of 1990
Table 1. Federal Locality Pay Areas
(FEPCA) authorizes locality-based comparability payments
As of January 2022
for General Schedule (GS) employees. (See 5 U.S.C.
Alaska
Indianapolis-Carmel-Muncie, IN
§§5304, 5304a.) Locality pay implementation and
Albany-Schenectady, NY-MA
Kansas City-Overland Park-Kansas
adjustment procedures are specified in the statute and
City, MO-KS
Office of Personnel Management (OPM) regulations. (See 5
Albuquerque-Santa Fe-Las Vegas, Laredo, TX
C.F.R. Part 531, Subpart F.)
NM
Atlanta - Athens-Clarke County - Las Vegas-Henderson, NV-AZ
The locality pay procedures provide that payments are to be
Sandy Springs, GA-AL
made within each locality determined to have a
Austin-Round Rock, TX
Los Angeles-Long Beach, CA
nonfederal/federal pay disparity greater than 5%. Bureau of
Birmingham-Hoover-Tal adega, AL Miami-Fort Lauderdale-Port St. Lucie,
Labor Statistics (BLS) surveys compare the rates of GS pay
FL
with the rates of pay generally paid to nonfederal workers
Boston-Worcester-Providence,
Milwaukee-Racine-Waukesha, WI
for the same levels of work within each pay locality. The
MA-RI-NH-ME
amount of the comparability payment payable within any
Buffalo-Cheektowaga, NY
Minneapolis-St. Paul, MN-WI
particular locality is stated as a single percentage, which is
Burlington-South Burlington, VT
New York-Newark, NY-NJ-CT-PA
uniformly applicable to GS positions within the locality.
Charlotte-Concord, NC-SC
Omaha-Council Bluffs-Fremont, NE-
The payments are effective as of the first day of the first
IA
applicable pay period commencing on or after such date as
Chicago-Napervil e, IL-IN-WI
Palm Bay-Melbourne-Titusvil e, FL
the President designates. Locality payments are not based
Cincinnati-Wilmington-Maysvil e,
Philadelphia-Reading-Camden, PA-
on indicators of the cost of living in a pay area.
OH-KY-IN
NJ-DE-MD
Cleveland-Akron-Canton, OH
Phoenix-Mesa-Scottsdale, AZ
Table 1 lists the 54 locality pay areas as of January 2022.
Colorado Springs, CO
Pittsburgh-New Castle-Weirton, PA-
OH-WV
FEPCA also authorizes the President to establish an
Columbus-Marion-Zanesvil e, OH Portland-Vancouver-Salem, OR-WA
alternative level of locality payments if, because of a
Corpus Christi-Kingsvil e-Alice, TX Raleigh-Durham-Chapel Hil , NC
national emergency or serious economic conditions
Dal as-Fort Worth, TX-OK
Richmond, VA
affecting the general welfare, the President considers the
Davenport-Moline, IA-IL
Sacramento-Rosevil e, CA-NV
level that would otherwise be payable inappropriate.
Dayton-Springfield-Sidney, OH
San Antonio-New Braunfels-Pearsal ,
Locality payments became effective in January 1994 and an
TX
average 3.95% adjustment was provided, as the law
Denver-Aurora, CO
San Diego-Carlsbad, CA
required, for that year. For each year since then, alternative
Des Moines-Ames-West Des
San Jose-San Francisco-Oakland, CA
plans have reduced the locality pay amount provided.
Moines, IA
Detroit-Warren-Ann Arbor, MI
Seattle-Tacoma, WA
Base pay and locality pay combined cannot exceed the pay
Harrisburg-Lebanon, PA
St. Louis-St. Charles-Farmington,
rate for Level IV of the Executive Schedule, which is
MO-IL
$176,300, as of January 2022 (5 U.S.C. §5304(g)(1)). As
Hartford-West Hartford, CT-MA Tucson-Nogales, AZ
annual adjustments to base and locality are provided and
Hawai
Virginia Beach-Norfolk, VA-NC
this limitation prevents raises from taking effect at the top
Houston-The Woodlands, TX
Washington-Baltimore-Arlington,
of the scale—“pay compression”—employees paid at an
DC-MD-VA-WV-PA
increasing number of GS step levels have reached this cap.
Huntsvil e-Decatur-Albertvil e, AL Rest of U.S. (RUS)
As a result of the January 2022 pay adjustments, employees
Source: 5 C.F.R. §531.603. RUS consists of those portions of the
in the middle to upper steps of the GS-15 pay grade are
United States and its territories and possessions not located within
affected by the pay cap in 30 locality pay areas. The most
another locality pay area.
severe compression is occurring in the San Jose-San
Francisco-Oakland locality pay area, where employees at
modification of pay localities, the coverage of the surveys
GS-15 steps 4 through 10 all receive the same rate of pay.
of pay localities conducted by the BLS, the process of
comparing the GS and nonfederal rates of pay, and the level
Under FEPCA, the Federal Salary Council (FSC) provides
of comparability payments that should be paid in an annual
views and recommendations on the establishment or
memorandum to the President’s Pay Agent (which
comprises the Secretary of Labor, U.S. Office of
Management and Budget director, and OPM director). Nine
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Federal Locality-Based Comparability Payments for General Schedule Employees
members comprise the FSC, of whom three members are
A location has an opportunity to present data and
chosen from among persons generally recognized for their
information to the FSC related to the locality pay
impartiality, knowledge, and experience in the field of labor
circumstances in that location at the FSC’s annual meeting
relations and pay policy, and six represent employee
in Washington, DC. The data and information generally
organizations whose membership includes substantial
relate to the number of GS employees impacted, recruiting
numbers of employees holding GS positions. The latter
and retention difficulties in the location, and employee
members are selected giving due consideration to such
commuting patterns outside of the location to a larger
factors as the relative numbers of employees represented by
locality pay area. OPM does not hold membership on the
the various organizations. Not more than three members of
FSC but provides administrative and technical staff support.
the FSC at any one time can be from a single employee
Individuals or groups concerned about the geographic
organization, council, federation, alliance, association, or
boundaries of locality pay areas or the criteria by which
affiliation of employee organizations (5 U.S.C.
those boundaries are established for a particular location
§5304(e)(1)). The FSC’s most recent memorandum covered
may submit a proposal to the FSC. Such a proposal could
locality pay for January 2022. The Biden Administration
cover the location of concern regardless of whether it meets
has yet to reconstitute the FSC and name a chair.
the current criteria. Individuals or groups interested in
providing input to the FSC can send an email message to
As part of its responsibilities, the FSC may recommend that
Pay-Leave-Policy@opm.gov with “Federal Salary Council”
a new locality pay area be established or that a location
in the subject line. OPM can provide individuals with
become an “area of application”—that is, be included in an
current information on procedures for providing testimony
already existing locality pay area. The current criteria for
to the FSC and on other matters related to locality pay.
adding adjacent core-based statistical areas (CBSAs—
metropolitan and micropolitan statistical areas) or single
The Pay Agent makes recommendations on locality
counties to locality pay areas as areas of application are as
payments in an annual report to the President. The most
follows:
recent report covered locality pay for 2022 and stated, “Any
Council recommendations to change or make exceptions to
 A multi-county CBSA adjacent to a basic locality pay
the criteria by which basic locality pay areas and areas of
area must have 1,500 or more GS employees and an
application … are established should discuss and quantify
employment interchange rate of at least 7.5%. The
the implications that such changes or exceptions could have
“employment interchange rate” is a measure of workers
on all potentially impacted locations throughout the
commuting between an existing locality pay area and
Country before the Pay Agent would consider them. Further
the proposed area of application. The rate is calculated
deliberation on these important matters is warranted by the
by including all workers in assessed locations, not just
new Council, once constituted.”
federal employees.
In November 2021, the Government Accountability Office
 A single county that is not part of a multi-county, non-
(GAO) published a report on the administration and
micropolitan CBSA and is adjacent to a basic locality
implementation of the GS locality pay program. It
pay area must have 400 or more GS employees and an
discussed the five options for alternatives to the locality pay
employment interchange rate of at least 7.5%.
survey methodology that were included in the FSC’s May
2019 memorandum to the Pay Agent: (1) maintain the
 Some federal facilities cross locality pay area
status quo—continue use of the NCS/OEWS model; (2)
boundaries. The FSC criteria stipulate that, for such a
modify the existing salary survey methodology; (3) verify
facility “[t]o be included in an adjacent locality pay
the results of the methodology; (4) assess the total
area, the whole facility must have at least 500 GS
compensation gap; and (5) establish a commission to
employees, with the majority of those employees in the
periodically review federal civilian compensation. GAO
higher-paying locality pay area, or that portion of a
noted, “As of August 2021, the council continues to use the
[f]ederal facility outside of a higher-paying locality pay
current NCS/OEWS methodology.” The GAO report also
area must have at least 750 GS employees, the duty
restated the Pay Agent’s views that “it has found that
stations of the majority of those employees must be
important labor market factors are not considered and the
within 10 miles of the separate locality pay area, and a
overall scale of the pay disparities presented by the council
significant number of those employees must commute to
each year using the current locality pay methodology lacks
work from the higher paying locality pay area.”
credibility; and it believed there is a need for fundamental
legislative reforms of the federal compensation system to
With regard to revisions in the criteria for new locality pay
develop a system that is performance sensitive and makes
areas, the FSC’s memorandum included a recommendation
the government more citizen centered, results oriented, and
that the FSC “continue to analyze and discuss the issue of
market based.”
whether the 2,500 GS employment threshold should change
for evaluating Rest of US metropolitan areas for possible
Executive Order 14061 issued by President Biden on
establishment as new locality pay areas based on pay
December 22, 2021, authorized a 2.7% pay adjustment for
disparities calculated using data from the NCS [National
2022, allocated as 2.2% base pay and an average 0.5% (of
Compensation Survey]/OES [Occupational Employment
basic payroll) locality pay.
Statistics] Model.” The memorandum directed the FSC’s
Working Group to provide it with a recommendation on
Barbara L. Schwemle, Analyst in American National
this issue in 2021.
Government
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Federal Locality-Based Comparability Payments for General Schedule Employees

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