Alaskans and Hawaiians get their own locality pay areas

Federal workers in Alaska and Hawaii in January 2011 will receive locality pay unique to their states, according to a draft rule the Office of Personnel Management published in the Federal Register on Thursday.

The interim rule establishes separate locality pay areas for Alaska and Hawaii and extends the "Rest of U.S." rates to include American Samoa, Puerto Rico, the Northern Mariana Islands and Guam. The rule will apply beginning with the first pay period after Jan. 1. It notes the rates in Alaska and Hawaii are likely to be higher than the Rest of U.S. rates.

The regulation marks another step in implementing the 2009 Non-Foreign Area Retirement Equity Assurance Act, which shifts federal employees in those regions away from cost-of-living adjustments based on the prices of goods and services like rent and food, and into the locality pay system that covers workers in the 48 contiguous states and is based on an analysis of private sector salaries. The rule will affect about 44,100 employees.

Sen. Daniel Akaka, D-Hawaii, the 2009 bill's sponsor, expressed concern that unlike locality pay, COLAs are not calculated as pay for federal retirement benefits or Thrift Savings Plan contributions, putting workers outside the lower 48 states at a disadvantage.

OPM is seeking feedback on the interim rule by Nov. 29. Comments can be e-mailed to pay-performance-policy@opm.gov, faxed to (202) 606-4264, or mailed to:
Jerome D. Mikowicz
Office of Personnel Management
Room 7H31
1900 E St. N.W.
Washington, D.C. 20415-8200