More workers would get locality pay under OPM proposal

The proposal, posted Wednesday in the Federal Register for public comment, would rejigger the rules governing how locality pay areas, which are based on the cost of labor in each city, are determined.

OPM plans to add dozens of outlying counties to the 31 existing metropolitan locality pay areas based on commuting rates from those counties to major cities, and the number of General Schedule workers who live in them. Overall, it would retain the 32 existing pay areas, which cover the metropolitan areas, and the all-encompassing "rest of the United States." The government established the locality pay system under the 1990 Federal Employees Pay Comparability Act.

In the past, OPM used standards that took into account population size and population density, but excluded many commuter counties from the metropolitan pay areas.

The change was triggered by a decision by the Office of Management and Budget to expand the number of outlying counties that it groups with urban areas for statistical purposes. When federal agencies report statistical data linked to geography, they use the OMB standards to define urban areas. OMB redefines the urban areas after each census. In June 2003, it announced that it would group any county with a city if at least 25 percent of workers from that county commuted to the city.

In October 2003, the Federal Salary Council, a group of experts in labor relations, pay policy and representatives from federal employee organizations, asked the president's pay agent to expand locality pay areas based on OMB's definitions.

The council also requested that the pay agent end locality pay areas for Kansas City, Mo.; Orlando, Fla.; and St. Louis, and group those workers in the "rest of the United States" pay area. The pay agent, however, has decided to conduct more research before making a decision.