Employees in U.S. Virgin Islands to get cost-of-living bump

Federal employees in the U.S. Virgin Islands will get a cost-of-living payment increase of 2 percentage points come September, according to an announcement Friday by the Office of Personnel Management.

Living adjustments for Virgin Islands employees will rise to 25 percent of base pay from 23 percent, effective Sept. 17, the Federal Register notice stated. The increase is based on a spring 2005 survey of living costs on the islands compared to Washington, D.C.

Most federal workers receive annual locality pay adjustments based on market surveys, but employees in Alaska, Hawaii and territories outside the contiguous United States receive cost-of-living increases instead. The rates are calculated using a survey methodology that OPM adopted after settling a lawsuit in August 2000 from federal workers who thought they weren't being paid enough to work outside the 48 contiguous states.

The 2005 survey also covered Puerto Rico. It found that the current 10.5 percent adjustment there is actually too high, and should be decreased to 9.5 percent. But Friday's announcement noted that employees in Puerto Rico already saw their cost-of-living payments go down last September, and rules prohibit a decrease of more than 1 percentage point in any 12-month period.

The limit also is working in favor of employees in Anchorage, Fairbanks and Juneau, Alaska, where rates went down last September too, to 24 percent of base pay from 25 percent. An analysis of Consumer Price Index changes in the Alaska areas relative to Washington, D.C., indicated the Alaska rates should decrease further to 23 percent, an October 2006 notice stated.

The additional rate reductions will be left for future Federal Register announcements.