Federal Salary Council adds 2 new locality pay areas

Nicole Ogrysko: Federal Salary Council adds 2 new locality pay areas

The Federal Salary Council voted on Friday to add two new separate locality pay areas for 2017, in addition to other changes to the Council’s process for studying and making future decisions on local salaries.

Based on the Council’s recommendation, Virginia Beach/Norfolk, Virginia and Burlington/South Burlington, Vermont would join 47 other metropolitan and municipal areas with higher federal pay than the rest of the United States.

The federal pay agent must finalize all recommendations from the Council.

The Council also voted to eliminate GS Employment Criteria — or the number of GS employees who work in a specific location — in favor of using Adjusting Commuting Criteria to make its decisions on locality pay areas.

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In the past, the Council used the number of GS employees in a specific location as a main factor in its decision to establish locality pay areas.

“That makes some sense in terms of wanting to look at places that have the biggest problems,” Rex Facer, acting chair of the Federal Salary Council and associate professor of public finance and management at Brigham Young University, told Federal News Radio. “But it doesn’t make sense if what we’re trying to do is understand local labor markets. We went back and looked at the economic literature, and the economic literature is pretty clear that labor markets aren’t inherently based on the number of people there. They’re based on people’s ability to get to and from work.”

The council has made this recommendation before, but the federal pay agent has rejected it for the past several years.

Facer stressed the importance of making changes that would impact multiple locations and large groups of federal employees, rather than tackling a problem at one specific area.

“We want to make sure that we’re addressing these issues, that we’re making decisions that we can replicate and use in other places,” he said. “It’s not just, how can we solve the problem for one group of employees. As much as we’d like to solve the problem for one group, we want to have a methodology that allows us to continue moving forward in looking at other places.”

The Council agreed it should also evaluate three years of research on pay gaps rather than four.

It also recommended that the pay agent evaluate some locations surrounded by higher-paying locality pay areas with high commute levels and individually consider whether they should get added to a specific locality pay area.

In addition, the Council suggested new criteria to evaluate single-county locations that are near multiple locality pay areas.

White River, Junction, Vermont is one of those areas that could eventually benefit from these procedural changes. It was approved for locality pay several years ago, until the federal pay agent changed some of the qualifying criteria in 2011.

Brenda Willis, an employee at the White River Junction VA Medical Center, is pushing the Council to make those changes. She said she’s seen employees who receive and accept positions at the medical center but decline the offer once they realize the cost-of-living in Vermont.

“A lot of our employees feel defeated and not cared about, and that their voice doesn’t count,” she told Federal News Radio.

Patrick DeFalco has made the trip from western Massachusetts to Washington to speak before the Council for the past 11 years. He has long argued that the Council add Berkshire County, Massachusetts to the new Albany-Schenectady, New York locality pay area.

Now under new, finalized recommendations the federal pay agent approved Oct. 27, his county qualifies for locality pay.  Recently finalized rules add 13 new areas to the federal locality pay list for 2016.

The President said in an August letter to Congress that he would make a decision on locality pay by Nov. 30. The letter came when Obama approved a one percent pay raise for federal employees for fiscal 2016. The White House had frozen locality pay increases since 2011.

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