Pay Agent rejects new locality pay areas

By Jolie Lee and Julia Ziegler
Federal News Radio

The President’s Pay Agent is rejecting the Federal Salary Council’s recommendation to expand or increase the number of areas eligible for locality pay adjustments.

The Council had recommended creating new locality pay areas for Albany, N.Y, Albuquerque, Bakersfield, Calif., Charlotte, N.C., Harrisburg, Pa., and Portland, Maine. The council also recommended adding Lansing, Mich., to the Detroit locality pay area. Currently, there are 32 locality pay areas.

According to the Council’s December 2010 report, about 20,000 GS employees are impacted by pay gaps in these locations.

Locality pay is the percentage increase above the base pay adjusted for location. Since 1994, the Federal Employees Pay Comparability Act has allowed for adjustments above the General Schedule if a location’s non-federal salary exceeds the federal salary by more than 5 percent.

The entire model and methodology of estimating pay gaps needs to be re-evaluated before changes are made, the Pay Agent said in its report. Members of the Pay Agent include Secretary of Labor Hilda Solis, Office of Personnel Management Director John Berry and Office of Management and Budget Director Jacob Lew.

The Pay Agent also took issue with instituting one locality pay increase across different jobs and pointed to the austere economic times.

“We do not believe it is appropriate to make substantive changes in the General Schedule locality pay system at this time given the anticipated migration to the use of a new survey methodology … the continuing economic emergency affecting the general welfare, and the recently enacted legislation freezing federal pay in 2011 and 2012,” according to the report.

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