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Key developments in the world of federal employee benefits: health, pay, and much more.

Pay Puzzle

Last month the Federal Salary Council, a statutorily required panel that normally avoids politics, found itself in an awkward situation.

The council usually determines during its fall meeting how much of the annual federal pay raise should be devoted to an across-the-board pay hike and how much should go to locality-based increases. But when the group gathered in September for its annual meeting, Congress had yet to give clear guidance on the overall pay boost.

The House passed an appropriations bill in July that would give civilian employees a raise of 2 percent -- a figure President Obama has supported. The Senate has not taken up its version of the bill, which includes a 2.9 percent hike for civilians. Meanwhile, the military could get a 3.4 percent boost if appropriators back the figure in the fiscal 2010 Defense authorization act Obama signed last week.

"The increase is all over the map," said Randy Erwin, legislative director of the National Federation of Federal Employees, which held one seat on the council until the death of its director, Richard Brown, and has continued to participate in the proceedings. "It's becoming unlikely that [pay parity between civilians and members of the military] is going to happen this year. In most prior years, we've had pay parity."

Rather than intervene in the debate, the council opted not to make any recommendation on the 2010 raise during its meeting-- something that hasn't happened since at least 2002.

This doesn't necessarily mean the council will never have a say in how the 2010 raise is allocated, according to Erwin. Once lawmakers settle on a figure, members still could arrive at a recommendation -- through internal communications, for instance -- and share it with the administration, he said.

Erwin predicted that the lower the overall figure, the more the council would devote to an across-the-board increase.

"I think that people are going to gravitate toward putting as much as possible into the base," he said. "When the increase is small, you really can't do both at the same time."

When -- and if -- the council reaches a decision, it will advise the President's Pay Agent, which then will submit a report to the president. The salary council has nine seats -- six reserved for federal employee organizations and three for impartial labor relations and pay experts -- but currently has only four members because the Obama administration has yet to appoint replacements for some Bush officials.

Typically, the council's thorniest issues revolve around calculating and defining locality pay areas. Based on headache-inducing formulas for the cost of comparable labor in different locations nationwide, the council -- established by the 1990 Federal Employees Pay Comparability Act -- makes recommendations about the boundaries of regions and how much of the locality pie each area should receive.

Cities eager to avoid the dreaded "rest of United States" category, which normally has the lowest increases, can petition the council to be part of a locality area. These petitions are time-consuming and costly for the council, which usually can deal with only one region at a time.

"There's definitely been a resource issue, because there are so many cities that have their requests in," said Colleen Kelley, president of the National Treasury Employees Union, which sits on the council.

But even though the pay process is playing out differently than usual this year, the council's influence is not eroding, according to Kelley. "I think our role, at the core, has stayed the same, but each year it gets a little different," she said.

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