Locality Pay and How it Impacts Federal Employees

By on November 19, 2012 in Current Events, Pay & Benefits with 26 Comments

The federal pay system continues to creak along in its current form despite criticism from those who think federal employees are paid too much and those that think they are not paid enough. Anyone who says the pay system is easy to understand isn’t paying much attention beyond how it may work in one organization in one locality.

When looking at the nationwide system, it is a morass. Perhaps that is why it continues to exist; it is very complex with various systems and there is little incentive to tackle the work that would be required to come up with a uniform system as any new system would have new winners and losers in the federal pay lottery.

The latest event is a new document from the Federal Salary Council regarding the latest iteration on the locality pay system. In general, concludes the Council, “the overall gap between base  GS average salaries (excluding any add-ons such as GS special rates and existing locality payments)  and non-Federal average salaries surveyed by BLS in locality pay areas was 61.29 percent. The amount needed to reduce the pay disparity to 5 percent (the target gap) averages 53.61 percent.” Part of the reason all of this is confusing is that these figures are before locality pay is taken into consideration. In other words, those in a locality pay area make more money than those federal employees who are not in one of these locality pay areas.

The Federal Salary Council consists of union representatives and outside pay experts. It reports to the President’s Pay Agent. The pay agent, which consists of the Labor Department Secretary, Director of the Office of Management and Budget and Director of Office of Personnel Management, then makes recommendations to the White House.

To find out the current additional percentage added to your federal pay for a specific locality pay area, check out our General Schedule Pay Calculator. This feature is also available directly from our home page at www.fedsmith.com under the “federal data” link near the top of the page. When you look through this calculator, you will see the “kicker” that federal employees receive in these locality pay areas.

For example, those in the Washington, DC area have a kicker of 24.22% added into their salary for locality pay. Those in the San Francisco area receive an additional 35.15%. The differential adds up. So, for example, a GS-12 federal employee at a step five in the San Francisco area will receive $92,321. That same employee who is in the same step and grade but living in Washington, DC will receive $84,855. That employee in Huntsville, Alabama will receive $79,253 while those in the “rest of the U.S.” will get $77,983.

You can check out the differential in your area with the General Schedule Pay Calculator or, if you prefer to see how much a friend or colleague makes, you can search on individual federal employee salaries (excluding those who are not included because of security considerations).

Not surprisingly, many employees who are not in a locality pay area would like to be included. Some of these areas did not meet the criteria used to establish pay areas. But, good news for employees in 12 areas, the Council has recommended setting up 12 new areas starting in 2014. Here are those areas that may be added “provided adequate funding for locality pay increases in 2014.”

Those with the biggest “pay gaps” are the ones most likely to be added although the recommendation is to include all of them in 2014. Here are the areas recommended as an addition to the locality pay process in 2014.

New Locality Pay Areas

Area March 2012 GS Base Payroll Pay Gap Recommended locality rate (target pay gap)
Albany $166,730,596 55.34% 47.94%
Albuquerque $510,495,966 45.88% 38.93%
Austin $366,557,509 51.17% 43.97%
Charlotte $168,635,266 47.85% 40.81%
Colorado Springs $561,339,429 52.99% 45.70%
Davenport $266,360,779 46.44% 39.47%
Harrisburg $413,576,464 52.18% 44.93%
Laredo $169,685,744 64.25% 56.43%
Las Vegas $275,731,172 60.41% 52.77%
Palm Bay $309,775,047 48.75% 41.67%
St. Louis $783,335,734 52.34% 45.09%
Tucson $491,018,021 50.52% 43.35%
Subtotal $4,483,241,727 51.67%
Rest of U.S. $34,307,554,189 40.13% 33.46%
Adjusted RUS $29,824,312,462 38.40% 31.81%

Locality Pay Recommendations 2012

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

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About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources.

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  1. WORLDBFREE says:

    Will there be a locality pay raise in our Jan 2014 checks?

  2. elsie says:

    Just combine Beaumont to Houston and it’s all good.

  3. Jackson Kevin A says:

    Am I the only one who remembers back in 1988 when Reagen pledged to close the gap and created a schedule to do so? Where is it and what happened to it?

    • morbosr says:

      don’t think it was Reagan. It was Bush 1. And no one could agree with the formula used to determine disparity. it got nixed by Congress just like everything else.

  4. ??????????? says:

    Am I to understand that the RUS is going to be lowered?? Is the Adjusted RUS the new RUS??

    • ImusJunkit says:

      I believe so – Yes, When you take out the higher segments of the RUS – then the remaining areas (Adjusted RUS) has a lower overall adjustment to where the local rates need to be.

  5. Pamela Chesla says:

    I thought locality pay was based on prevailing pay and not the cost of living.  Plus you never discuss Alaska and it’s issues and the fact that we still have both Locality Pay and COLA (Cost of Living Adjustment), is it to complex?

    • Hostess1953 says:

      The wage grade surveys are based on prevailing wage.

      • coloredcollarintel says:

        The Wage Grade surveys are never used. The pay increase for WG always ends up to be the same % as the GS increase.
        Wage grade gets 1.5% if the GS get 1.5%.   I always cheer for higher percentages for the GS because I know that the Wage Grade percentage will be the exact same.  This has been the same since the GS system was conceived. These surveys, if they are really done; have no impact on the pay increase for a wage grade worker.

  6. steve5656546346 says:

    What I find amusing is that there is a “Rest of US” locality pay table.

    So, not only does it cost more the live in New York City and Washington, DC, but it also costs more to live in the rest of the US. But more than what?  More than it costs to live in Middle Earth?  Or Mars.  Or Biafra?  Or…?

    • Wow says:

      That’s because if you work in say Kuwait you don’t get any locality pay.. Humm maybe research before looking like a fool.

    • ImusJunkit says:

      RUS is showing the differential between what the base Fed salary (without a locality pay) as compared to what the comparable like-worker makes out on the economy – aggrigated over the entire worker population for that area (RUS).  That is why when the highest compariblely paid areas of RUS get pulled out of the RUS pool, the differential between teh Adjusted RUS and local economies goes down = less locality pay for the Adjusted RUS.

  7. Todd Pfleger says:

    Why are the locality adjustments ONLY for the GS wages?? We WG employees work at the same geographical location as GS employees that receive locality adjustments, but our wages are not adjusted to the same local as the GS employees. 

    • Gmanqa says:

      You apparently haven’t been a WG employee for very long, or else you have little knowledge of how your pay is computed.  WG does indeed have a similar system to GS locality pay adjustment.  You guys have joint labor (union) & management wage surveys every year.  They alternate every other year between physical surveys where team members go out into the prevailing wage areas & do complicated & time-comsuming manual surveys; and then during the off years, a phone survey is conducted.  You need to communicate with your local union for more information.  I don’t think management does much of a job anymore telling new employees how things work.  They like to keep you in the dark.  Seek out a union officer for more information.  Don’t spend your federal career in the dark…..

      • coloredcollarintel says:

        Please know that just because you write something on a forum doesn’t make it true. The OPM has very little information regarding Wage grade entitlements. There are unions but these unions are very few and only certain locations and positions can be represented by the union. There are no Wage grade positions in the agencies creating policy. There are no wage grade workers in a position to influence the policy makers. Compare this situation with the number of GS people hammering at the policy makers to ensure that the locality pay increases or the pay level increases for a specific job description. There are survey findings revealing many GS 12 and 13’s are performing jobs that were rated at 7’s and 9’s just a few years ago. There’s a big difference between having 10 steps in the GS pay system and only 5 in the WG system. The major difference is maxed out after 6 years with no hope of advancing for a WG while a GS can expect pay increases through the STEP for 20 years and the option to change into a new job with a higher pay rate. The primary concern for policy makers is the GS worker. I have yet to google policy and pay updates for Wage Grade workforce and found anything has changed in this system for 30 or more years. There’s seperate policies and programs which means the workforce is not operating as an integrated unit. Quite alot going on up there in Washington and seems like the pay systems are out of control.  I will not resent anyone for benefiting from their achievements, let’s just work together to make sure that it’s a fair system for everyone.

    • coloredcollarintel says:

      These surveys do nothing exept provide a limited base increase that matches the increase given to GS people. If the GS receive 2%, the WG receives 2%.   Nothing more EVER!  The Govt. pay system is totally hosed. Intel organizations prohibit unions yet fail to recognize that they employ a WG workforce. The same organizations deny incorporating the WG worker into ANY of the programs designed to benefit the worker, organization, improve moral, allow flex scheduleing, recognition, opportunity for career progression and use the title 10 clause as a shield, aloowing the intel organizations to shit on the wage grade worker. Come cry to me about your  25% locality benefit, especially if you are a HR, prgm Mgt, contracting, electronics or equip. specialist… These Intel specialists do exactly the same thing as a non-intel person. Either  include the wage grade Intel workforce or contract the work. Jim Crow ended back in the 50’s, and it’s time for the WG/GS systems to end and acknowledge every worker on his own merit. BTW, I would prefer that the tables turn my way and provide for some of that 25% locality pay that I see everyone complaining about.  I’d even be appreciative of a 1 or 2%!

  8. $15300432 says:

    Totally believable with the Union being on the board that considers pay and benefits. What is left out is the 50% in benefits on TOP of salaries

    • Df says:

       What 50% in benefits on top of my salary? My cost of insurance increase  averages 5-10% every year. I pay more than my family members on the private side.

      One side says federal employees are paid too much and the other not enough. Well they’re both wrong until somebody actual compares job titles and duties such as an electrical engineer.

      • $15300432 says:

        Do you think FERS TSP FEBP SS are FREEEEEE??? 75% of workers don’t have an employer provided HC.

        Compare job Titles?? You mean like coordinates, overseas has a budget of??? Utter nonsense An electrical engineer if the federal govt does little if any engineering, the actual work is contracted out. In most cases the private sector would pay a federal electrical engineer the same as drafter or planner about $40K a year

        • McGyver says:

          Not in my section. I’m in in-service engineering. When they call you at  3PM on sat to be in the middle of  “some ocean” by Sunday night  to fix a system, what the heck is a drafter or planner going to do for you?  We usually only go out when the fix is not apparent (means they tried all the easy stuff). You have to wear many hats once on board. Need to play politics when the captain of ship is breathing down your neck why his system is not working yet.  Need to be able to smooze over the sailors to find out what “really” went wrong.  Need to be able to diagnose like a mechanic, yet determine if a non specification/temporary  fix is going to be safe (which only an engineer can calculate and make that call on the risk).  All the while you have to deal with craploads of red tape (just getting travel orders through the system is a nightmare these days), which frustrates the heck out of most private industry engineers (some have quit, they can’t take it, but that is how the govt is).  So which of my job titles do you want to compare to private industry?, politician, mechanic, engineer, materials specialist, draftsman, program manager, welder, machinist. I’ve done them all. What does McGyver get paid, thats what I should make.

          • $15300432 says:

            Those “systems” are fixed by the contractor any CS being there would say yep its a problem did you try this and then call in the experts. Which title WG9 cause that’s the work you actually performing

          • coloredcollarintel says:

            Ummm… you’re probably classified incorrectly.  These jobs that you describe are normally performed by the FWS or Wage Grade worker.   How can job/work descriptions be so simillar yet be placed in both the WG AND GS pay systems?

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