Locality pay will remain unchanged in 2012

Civilian government workers will not receive an increase in locality pay next year, as a result of the two-year pay freeze enacted in January. The President's Pay Agent, which consists of the Labor secretary and directors of the Office of Management and Budget and Office of Personnel Management, also declined to change the locality pay designation in six metropolitan regions or add any geographic areas to the list.

"We do not believe it is appropriate to make substantive changes in the General Schedule locality pay system at this time, given the anticipated migration to the use of a new survey methodology (incorporating the Occupational Employment Statistics program), the continuing economic emergency affecting the general welfare, and the recently enacted legislation freezing federal pay in 2011 and 2012," the President's Pay Agent wrote in a letter accompanying the report.

In November 2010, the Federal Salary Council recommended that six metropolitan areas be considered for separate locality pay: Albany, N.Y.; Albuquerque, N.M.; Bakersfield, Calif.; Harrisburg, Pa.; Portland, Maine; and Charlotte, N.C. The council, made up of federal pay policy experts and union leaders, uses information from the Bureau of Labor Statistics to make recommendations to the President's Pay Agent on comparison methods and locality areas and rates. BLS currently uses estimates from the National Compensation Survey, which collects data by occupation and work level from 36,000 businesses and government agencies nationwide. The new model would incorporate information from the bureau's Occupational Employment Statistics program, a mail survey that samples 1.2 million businesses and covers all U.S. metropolitan areas.

Obama in 2009 also proposed freezing locality pay for 2010. Congress decided to include a 0.5 percent increase in addition to a base pay raise, however.

The report reiterated its support for reforms to the federal pay system. "We have serious concerns about a process that requires a single percentage adjustment in the pay of all white-collar civilian federal employees in each locality pay area without regard to the differing labor markets for major occupational groups," the letter stated.