Obama authorizes locality pay raise

President Barack Obama officially raised locality pay for federal employees by 0.6 percent, effective Jan. 1.

The increase couples with the 1 percent across-the-board pay raise for all federal employees to equal  the 1.6 percent of basic payroll requested in the 2017 budget. This was part of Obama’s alternative plan to head off much higher automatic raises.

“Under current law, locality pay increases averaging 28.49 percent and costing $26 billion would go into effect in January 2017. Federal agency budgets cannot sustain such increases,” Obama said in a Nov. 29 order.

The order noted the three-year pay freeze feds operated under until January 2014, and that subsequent raises have been lower than those in the private sector or General Schedule statutory formulas. Federal employees, on average, earn about 34.07 percent less than their counterparts in the private sector, according to the latest data from the Bureau of Labor Statistics and Office of Personnel Management. That’s down slightly from the previous year’s 34.92 percent.

“However, we must maintain efforts to keep our nation on a sustainable fiscal course. This is an effort that continues to require tough choices under current economic conditions,” the order said.

The highest alternative plan locality payment percentages are:

  • San Jose-San Francisco-Oakland, California — 37.07 percent
  • New York-Newark, NY-NJ-CT-PA  — 30.29 percent
  • Houston-The Woodlands, Texas — 29.11 percent
  • Los Angeles-Long Beach, California — 30.12 percent
  • Hartford-West Hartford, CT-MA — 26.94 percent

The Federal Salary Council did not vote to add any new locality pay areas in 2017, although Birmingham, Alabama and San Antonio, Texas may join the other 46 locations in 2018.

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