The Obama administration on Tuesday released the adjustments to base salaries that employees in each of the country’s locality pay areas will receive in 2017, with the largest increases concentrated in major American cities.
California’s Bay Area, including San Francisco, Oakland and San Jose, will see the largest increase next year, with the locality rate increasing 1.32 percentage points from 35.75 percent in 2016 to 37.07 percent of an employee’s base salary for 2017. Federal employees in the Washington, D.C., area (which also includes Baltimore, Md., and parts of Northern Virginia) will see a 1.26 percent bump in 2017, from 24.78 percent of their base salary this year to 26.04 percent for next year.
The New York City metropolitan area will receive a locality pay increase of 1.09 percentage points, from 29.2 percent to 30.29 percent.
The “rest of the U.S.” rate will increase next year to 14.74 percent from 14.35 percent in 2016. Click here for the full list of 2017 locality pay rates. To compare, here is the list of locality pay rates in 2016.
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The president in August officially recommended a 1.6 percent pay boost in 2017 for civilian federal employees, composed of a 1 percent base increase and a 0.6 percent locality pay bump. Obama said he presented an alternative pay plan because otherwise it would have cost the government too much money in pay raises. The statutory formula for determining locality pay, which presidents historically ignore in favor of their own rates, would have boosted the adjustments by an average of 28.49 percent at a cost of $26 billion, and “federal agency budgets cannot sustain such increases,” Obama wrote in a letter accompanying the 2017 locality pay rates.
“Civilian federal employees made significant sacrifices as a result of the three-year pay freeze that ended in January 2014,” wrote Obama. “Since the pay freeze ended, annual adjustments for civilian federal employees have also been lower than private sector pay increases and statutory formulas for adjustments to the General Schedule for 2014 through 2016. However, we must maintain efforts to keep our nation on a sustainable fiscal course. This is an effort that continues to require tough choices under current economic conditions.”
The new rates will go into effect on the first pay period in the new year, Obama ordered. He explained they “will not materially affect our ability to attract and retain a well-qualified federal workforce.”
Locality pay rates for federal employees were frozen between 2010 and 2015.