With 85 percent of the Federal workforce living outside of the Washington, D.C., area, the President’s Pay Agent wants to ensure that locality pay is competitive across the nation.
The Office of Personnel Management (OPM) released the annual Pay Agent Report for Locality Pay today, which approves a recommendation from the Federal Salary Council to establish new locality pay areas – meaning a group of Federal employees could see an increase in their locality pay.
Office of Management and Budget Director Shalanda Young, OPM Director Kiran Ahuja, and Labor Secretary Marty Walsh – who together serve as the President’s Pay Agent – approved the recommendation to add the Washington State Counties of Clallam and Jefferson to the Seattle-Tacoma, Wash., locality pay area.
However, the change cannot be made “until appropriate rulemaking to make the change is complete,” according to the report. “The timing of such rulemaking has not yet been determined.”
Additionally, the report approved another council recommendation to establish Fresno, Calif.; Reno, Nev.; Rochester, N.Y.; and Spokane, Wash., as separate locality pay areas. These locality pay areas will likely be finalized in time for the 2024 locality pay tables, impacting about 32,000 employees.
Nevertheless, the President’s Pay Agent stressed that pay gaps still exist. The report says that it would cost agencies an estimated $22 billion to reduce General Schedule (GS) pay disparities in 2024, which “would have a substantial impact on agency budgets.”
“We believe there is a need to consider major legislative reforms of the GS pay system, which continues to establish a single percentage locality rate in each locality pay area without regard to the differing labor markets and average salary levels for major occupational groups,” the report says.
“The current pay comparison methodology used in the locality pay program ignores the fact that non-Federal pay in a local labor market varies substantially between different occupational groups,” it adds. “As currently applied, locality payments in a local labor market may leave some mission-critical occupations significantly underpaid while overpaying others.”
