Council Vote Would Give Thousands of Feds Bigger Locality Pay Adjustments

The Federal Salary Council, which makes recommendations to the White House on federal employee pay issues, suggested in its most recent report lowering the threshold for adding more areas to existing localities, which would effectively boost pay for more employees. 

The council, made up union representatives and pay policy experts, said the number of General Schedule employees in an area has no bearing on the economic conditions there, and should therefore not be a factor in setting pay rates. Currently, an area that encompasses multiple counties must have at least 1,500 GS employees to join a locality pay area and an area in a single county must have at least 400 GS employees. FSC has previously recommended scrapping those employee thresholds, but the president’s pay agent, who makes final recommendations to the president, has rejected the proposal. (The president's pay agent is actually a body comprising the secretary of Labor and directors of the Office of Personnel Management and Office of Management and Budget.)

This year, the salary council said if the pay agent again rejects the recommendation, its second choice would involve lowering of the employee minimum. In an area in which a moderately large percentage of employees commute to an existing locality area, the council suggested only 100 GS employees should have to live there to add it to the locality. If the commuting rate is particularly high, the council said, the threshold should be somewhere between zero and 99 employees. The proposal would also raise the threshold for the commuting rate necessary to be included in a locality.

The council included dozens of counties housing tens of thousands of federal employees that would benefit from the new conditions of joining a locality.

Also included in the council’s report was a recommendation to create a new locality pay area for San Antonio, Texas, and Birmingham, Ala., in 2018. GS employees' base pay is adjusted upward either by their specific locality’s percentage, or by the “rest of United States” designation. For 2016, the “rest of U.S.” rate was 14.35 percent, whereas those in specific localities ranged from 14.37 percent to 35.75 percent.

A 2013 CityLab analysis of data by market research firm EMSI found federal employees made up between 5 percent and 10 percent of San Antonio’s workforce. The federal government accounted for 19 percent of the city’s workforce when including jobs both directly and indirectly tied to it, which ranked ninth in the nation.

The Federal Salary Council also got the ball rolling on creating locality pay areas for Burlington, Vt., and Virginia Beach, Va. The federal government, including both those it directly and indirectly employed, accounted for 42 percent of jobs in Virginia Beach as of 2013 -- the second highest rate in the country. Federal employees in that area averaged a 10.6 percent pay gap over the last three years compared to non-federal pay for employees doing the same level of work, according to FSC’s analysis. In Burlington, the gap was more than 21 percent.

Feds in San Antonio have endured a 12 percent pay gap over the last three years per FSC’s data, and an 11 percent gap in Birmingham.

Representatives from an additional 29 areas reached out to FSC to appeal for either their own locality or their inclusion in an existing one, but the council declined to take up their cause. The council said some of the other changes it suggested could help those cases going forward.

The Federal Executive Association in Charleston, S.C., for example, wrote to the salary council and said the increased cost of living driven by tourism and people moving to the city “in droves” has made federal pay outdated.

“Federal government jobs in Charleston do not pay enough to maintain a reasonable standard of living compared to local private industry jobs and federal government jobs in competing localities,” the association wrote, noting there were close to 10,000 federal workers in the area.

Still, the council declined to act. According to its data, Charleston-based feds actually received 6 percent higher salaries than their non-federal counterparts over the last three years.

About 108,000 federal employees received a boosted pay increase this year when Obama approved 13 new localities. Employees are on track to receive a 1 percent base pay increase in 2017 and a 0.6 percent bump to their locality pay. 

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