Legislation would give locality pay to Alaska, Hawaii and U.S. territories
Federal workers in these regions currently are covered by cost-of-living adjustments that vary widely.
A bipartisan group of legislators introduced legislation in the House and Senate on Monday that would move federal employees in Alaska, Hawaii and U.S. territories into the federal locality pay system.
The lawmakers said the move was crucial to ensure that those workers have the same retirement security as federal employees in other states. Federal workers in Alaska, Hawaii and the territories currently are covered by cost-of-living adjustments that range from 13 percent to 25 percent of their salaries. The payments are not taxed as part of employee income, and they do not count toward federal retirement benefits or as part of basic pay eligible for Thrift Savings Plan matching funds.
"COLA rates are scheduled to go down this year, and in this difficult economy, federal employees in Hawaii, Alaska and the territories cannot afford a loss of pay," said Sen. Daniel Akaka, D-Hawaii, who chairs the Senate Homeland Security and Governmental Affairs subcommittee on the federal workforce. "For years, these federal employees have been unfairly disadvantaged in their retirement calculations compared to their counterparts in the continental United States. This bill would address this disparity and improve efforts to recruit and retain federal workers in our states and the territories."
Akaka introduced similar legislation last year, which passed by unanimous consent in the Senate, but did not receive a vote in the House.
The bill would not make an immediate switch from COLAs to locality pay. Rather, it would freeze cost-of-living adjustments on the day the legislation was enacted, and COLAs would be phased out as locality pay is phased in over a three-year period. At the end of that time, if locality pay has not offset completely the decline in pay caused by ending COLA payments, employees in those areas would continue to receive reduced cost-of-living adjustments until locality pay increases close the gap.
Senators and representatives from Alaska and Hawaii, and delegates from Guam, American Samoa, and the U.S. Virgin Islands are co-sponsoring the legislation.
The Federal Managers Association praised the legislation.
"The compensation package resulting from enactment of this bill will make the federal government more competitive," said FMA National President Darryl Perkinson. "This is essential if the highly critical missions of the federal agencies in Hawaii and Alaska are to be met."