Legislation Would End Wage Disparity for Hourly Federal Employees

By on June 24, 2013 in News, Pay & Benefits

Rep. Matt Cartwright (D-PA) has introduced legislation that would potentially boost the salaries of hourly wage federal employees. It is being co-sponsored by Reps. Tom Marino (R-PA), Bob Brady (D-PA), Chaka Fattah (D-PA) and Allyson Schwartz (D-PA).

The Locality Pay Equity Act (H.R. 2450) aims to solve a local labor market boundary issue that has resulted in wage computation disparity between wage scale or hourly employees and general schedule (GS) or salaried employees. The government treats hourly and salary employees who work in the same location as if they worked in different locations when it comes to calculating local pay rates.

At Tobyhanna Army Depot in Pennsylvania for example, hourly employees are in the Rest of U.S. locality whereas General Schedule employees are in the New York City regional locality, giving them a 25% higher pay differential.

The legislation aims to correct this discrepancy when it arises. Even though the Pennsylvania Congressmen are sponsoring it to support constituents at Tobyhanna, it would apply nationally if signed into law.

“The current wage inconsistency at Tobyhanna is an issue in which I have been interested since last year; the current system is dated and does not take into account current regional considerations and statistics,” said Cartwright. “This legislation simply directs the Office of Personnel Management to fix this archaic system and level the playing field for all employees at Tobyhanna.”

He added, “Treating hourly wage employees as if they are in one local labor market for purposes of base pay and annual pay adjustments and salaried workers as if they are in a different local labor market for purposes of setting pay is inconsistent and inequitable. It violates basic standards of fairness.”

AFGE was quick to praise the legislation and encouraged Congress to pass it as quickly as possible.

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

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About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce. Ian also has a background in web development and does the technical work for the FedSmith.com web site and its sibling sites.

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  1. Steve Neal says:

    Title was quite misleading… I mean, even though most of us earn an annual salary (Basic pay / Locality / Adjusted pay listed on your SF-50, blocks 20A,B,&C), it is broken-down on our LES as an hourly wage. But that’s not the puzzling part for me…
    ————–I work with previous GS-12 personnel under a relatively new core-comp pay-band system where they got to keep their previous GS-12 pay and any “new hires” or “re-hires” were not elegible for anywhere near that pay rate. So now, after attaining the same pay-band grade and doing the same work, side by side with them, none of us relatively new techs will EVER get within 30% of what they make. To look-up my peers names in the “public release of federal salaries” website and see $100K+ salaries for most of them, while I only earn $70K and many others only $60K made me believe this is what your article was going to reveal and discuss.
    ————–I’ll keep reading, because I am a fan, but I’ll always keep an eye out for reporting that affects my bottom line. Please consider looking into the core-comp pay system, as I know it has been discussed on FedSmith before. I can help you find the 30% pay disparity at “H-band” level, and you may also learn about the mythical “in-band pay increase” that could or should be used to close this gap.

  2. Name says:

    GS employees are hourly employees. The “salary” is based on 2080 hours at a set hourly rate. That is how GS employees rate overtime and compensatory time off. GS employees being furloughed are being cut hours, not pay.

    • Greg Robbins says:

      The statement that furloughed GS employees are not having their pay cut is just plain wrong. Also, the GS salary is based on 2088 hours.

      • Keith Lamb says:

        2087

      • Fella says:

        Its actually based on 2087, but that’s neither here nor there.

        • Greg Robbins says:

          Close enough for government work. 😉

          • Fella says:

            lol.. You know, back in the day when that phrase first started, it was a meant as a positive. As in, if the government is willing to publish it, it’s something worthwile to public.

          • mandinka says:

            No its always been a derisive comment to reflect just how out of touch feds are

          • Chris says:

            I remember seeing an old advertisement in National Geographic. The expression “Good enough for Government Work” referred to meeting the contractual standards of government work. Nowadays, however, like many things, the meaning has changed. And as a retired contracting officer, I know how and why it changed.

          • captainrich says:

            What about Leap Year?

    • HR Manager (Retired) says:

      Your kidding – right? Because if you are not there is something seriously wrong with your thinking and logic.

    • Chris says:

      Nope. Pay is based on a 2087 hour year thanks to Ronnie Reagan. Although the reason behind the change was over a 30 year career it meant pay was more “fair,” I think it was based on cheating the working fed by reducing his annual salary by less than a day’s pay and getting away with it because it was less than a day. I’ll never forget the despondent look of my supervisor’s face when I explained to him that his GS-12 salary was not what was on the tables, but less than that.

  3. Erika in CO says:

    And what about employees that live somewhere expensive and don’t get locality pay because it is not a big city with a bunch of federal employees?

    • Fella says:

      They get locality, too. 14.16% extra. It may not be as fair as somebody living in small town, USA, but that’s a separate discussion.

    • The Master says:

      Locality pay isn’t based on cost of living, it’s based on labor market. They are trying to match what the labor market pays, not what it costs to live there.

    • Erika in CO says:

      It’s not fair and it should be based on cost of living. Thats all I’m going to say about that- it will start sounding like whining and I do believe there is the phrase ‘Life isn’t fair’.

      • Fella says:

        How does one deterimine cost of living difference exactly? Price of sqft in a house? Price of a big mac? Cost of living adjustments have a mathematical basis, I fear that your idea does not.
        What the government does, is ensures (try to be) they are competitive with local private markets.. essentially saying if you go to work down the street, you’ll make relatively the same. Not so that you have the same standard of living as a GS-11 in CO as one in DC……. FYI, I’ve lived in both Denver and D.C., and the actual cost of living in DC is sooo much higher than Denver.

  4. HR Manager (Retired) says:

    OK but will it have a “we can’t afford” trigger in it to stop increases from going into affect? Let’s face it, proposing to fix the Federal pay system is a good PR move but it seldom, if ever, leads to fixing the disparities in the salary market place. If this Congressman is serious about fixing the salary system problems he needs to take a good look at all of the Federal pay systems including the military. And, when he finds that Captains are making six figures and General well over 200K will he propose to scale their salary and benefits back to a more realistic level while raising the pay of civilians to bring them to the level of the private industry counterparts?

    • $30795581 says:

      You are 110% correct. They need to look at the entire federal pay system including the military.

      • mandinka says:

        DOD civilians are paid what other CS are paid their is no differential

        • HR Manager (Retired) says:

          There is a significant difference in the Wage Grade pay plans. As an example, I worked for an Air Force command which had two installations just 500 miles apart. Yet, because of the differences in pay with the locality area the same Wage Grade pay plan grade in our area paid over $1 more per hour than in the other area. These are the plans the Congressman want to address.

          • mandinka says:

            when I lived in MI Selfridge AFT base had GS9-12 politicking to be WG because they were paid at UAW rates and made twice what a GS made

          • Fella says:

            I’ve actually heard of this before…. Like Quality Assurance Specialists wanting to be reclassified into whatever the close WG series is because of the pay differential.

          • Fella says:

            500 miles apart is a long ways. It’s about 500 miles from Fort Knox, KY to Washington, D.C. I guess you must have meant 50 miles? Certainly if you’re a retired HR Manager, you know about Wage Survey’s and things like that, yes?

        • Fella says:

          They’re saying military… as in soldiers.

          • mandinka says:

            then the poster is clueless . Soldiers EARN their pay something feds can never say

          • Fella says:

            Although I don’t agree with them, I don’t think you’re 100% accurate either. I’ve seen them guard a blade of grass for stepping on it. They have the same security guards as the civilians… they also have the same supply techs that sit around a warehouse. I’m sure I can come up with more examples if you want. Soldiers take their orders, but in DoD (where I no longer work) you can be fired for the same thing as being repremanded in the military for (insubordination).

        • gmanqa says:

          mandinka.max, etc……as usual, you are 100% wrong. Why do you insist on blathering about things you know nothing about?

  5. griff61 says:

    The problem at Tobyhanna is that the local economy is geared towards NYC workers who live in the area. The rent, electric, cable, food and everything else is inflated because most who live in the area commute to the Poconos because the cost of living is cheaper than NYC. The WG folks should be at the NYC pay scale, same as the GS are now. I worked there for a while as a WG and the cost of living is crazy around the depot

    • $30795581 says:

      That is simple not correct. The cost of living in Monroe County is on average with the rest of the US and not NYC. The overall COL in Monroe County is 99 out of 100 and NYC is 169 out of 100. (100 is the average COL in the US.

      http://www.bestplaces.net/cost

      http://www.bestplaces.net/cost

      Also, the people that work at Tobyhanna live mostly in Scranton which has an even lower COL then Monroe County at 87. You can not justify either the WG or GS being in the NY locality.

      • Steve Neal says:

        Locality pay is not based on COL. It is based on local wages earned for simliar work.

  6. $30795581 says:

    There is no way in the world you can justify the GS employees at Tobyhanna (TYAD) being in the NY pay locality. How many employees at TYAD live anywhere near New York? I’d bet zero!

    The fix for this is not to change the WG side as that pay rate is done through wage surveys of the local area, it is to change the GS back to RUS locality like it should be.

  7. mandinka says:

    Tobyhanna should have never been in the NYC Locality pay. They belong in the RUS. That’s the way this disparity should have been fixed. If they are paid the differential then the typical sweeper, box stacker will be making $35.00 a hour three times what some one in the local area would pay

  8. rpfor says:

    Wait this goes against the Tea Party and Republican theory of “Race to the Bottom”. What’s the world coming to? Since the person offering the bill is a Democrat, I am sure that relaizes that bill will go nowhere in the Republican controlled house whose current goal is to repeal minimum wage and set a new record breaking low in wage rates. The goal is to bring working class wages back to the 1930’s.

  9. 1EYEDJimmyBivvins says:

    What they should do is move the GS employees to rest of the U.S. locality at Tobyhanna. Then they should look into how the system of determining and changing localities is being abused. An example is Defense Distribution Center in New Cumberland,Pa. It was in rest of U.S. until some high grade GS’s got transferred up there from DC. They did not like the pay cut and magically York County,Pa. moved into the Washington,DC pay locality. If Cartwright wants to do the taxpayers a real service he will investigate the system for abuse and change those localities back that were changed out of greed. If this is investigated I am certain abuses will be found and taxpayer money saved. Mr. Cartwright’s predecessor Tim Holden would have had no problem getting to the bottom of this shady practice.

    • mandinka says:

      SPOT ON!!!!!

    • RETVET03 says:

      You are mistaken: If someone was working in DC and commuted from Tobyhanna, they would still get DC locality pay…for obvious reasons. They would not affect the Tobyhanna locality rate; they still work in DC; there would be no “pay cut”. “Changing the locality” would have no effect on those commuters as they had no effect on the locality pay in the first place.

      • 1EYEDJimmyBivvins says:

        You did not read or did not comprehend my comment. I am not mistaken I was there when it happened. DDC in New Cumberland was in RUS locality. A number of higher grade GS’s came to DDC due to transfer or promotion or to keep their job or whatever reason. When they began working at DDC they discovered they were in RUS locality and did not like the pay cut they received by losing their Washington DC locality pay. These are not commuters but employees who once were paid DC locality and then RUS. The fact is they found a way to change York County,Pa. from RUS to Washington,DC locality so they would get more money.It happened,it is a fact. If this happened here how many other times has it happened? How many times have areas with high concentrations of GS employees been changed from RUS locality to a major city locality to increase the pay of those employees? If the WG employees at Tobyhanna are in RUS locality then I bet the GS were at one time also. Why were they changed from RUS to NYC locality? This is just another shady way of fleecing the taxpayer. How many times has an areas locality changed from a lower paying locality to a higher paying locality as opposed to the opposite.If these fine representatives want to truly serve the people they will investigate the corrupt system that enables these changes in locality instead of adding more to this system of fraud,waste and abuse. Hopefully as this legislation moves forward it will shed a light on this shady practice and the truth will come out.

      • $30795581 says:

        Yes, except Tobyhanna is not NYC. It is closer in distance and economy to Scranton…RUS locality.

        • RETVET03 says:

          Locality pay is based on the local market where you work, NOT where you live. So if you work in DC and you live in Tobyhanna your locality pay is based on DC.

          • $30795581 says:

            Great! Yes…I get that thanks. The local market of Tobyhanna is RUS and not NYC.

            NYC is an over 100 mile drive from Tobyhanna. Why would anyone think that they are in that locality? Neither WG or GS should be in a NYC pay.

      • 1EYEDJimmyBivvins says:

        What am I mistaken about? New Cumberland in York County,Pa. was in the RUS locality. At some point around 2007 I believe the Defense Distribution Center mission was expanded and some people who previously had jobs in the Washington,DC locality ended up at DDC in New Cumberland,Pa.. These employees were transfers or promotions or whatever reason. They no longer worked in the higher paying DC locality. They now worked in the lower paying RUS locality. Whether they were there voluntarily or involuntarily none of them liked the lower pay rate in RUS. They proceeded to have York and Adams county in Pa. moved into the higher paying Washington,DC locality. I know this because I was there at the time. I got a nice increase in pay. I am now receiving a higher monthly csrs annuity because of it. I benefited from it and I still say it was shady. The reason given for the change was that a certain number of people were commuting from the DC locality to New Cumberland enough to change two PA. counties from RUS to Washington,DC locality. This was nothing more than a greedy fleecing of the taxpayer. How many other areas were changed from a lower paying to a higher paying locality? What is the overall cost to the taxpayer? What is the justification of such changes? These are the things congress should be looking into. Tobyhanna,Pa. does not belong in NYC locality and York and Adams county don’t belong in DC locality. How many others are there? The American taxpayer does not deserve this fraud and abuse perpetrated by government employees who know how to play the system. When an area is changed from a lower paying to higher paying locality the cost is substantial and oversight and investigation should be required. All I see is legislators finding ways to spend more money instead of finding ways to save money.

  10. Fella says:

    Uninformed article at its best! What these PA represtentatives and Ian don’t know is how the pay structure works for WG.
    First and foremost, there is NO locality for WG (meaning, there is no such thing as “rest of US” as there is with GS). WG salaries are based off of local markets. Every two years a wage survey is done where representatives for the federal government get together with business that provide “like” services to that of the federal government and their average wages are calculated from that.

    For giggles, let me give you an example the other way…. At Fort Knox (26 miles from Louisville) the “local wage market” of Louisville is used. When the armor center was BRAC’d to Fort Benning, those who went would be losing up to $5 per hour (maybe even more in some cases) because the local wage market wasn’t as high. Oddly enough, both Fort Knox and Fort Benning are “Rest of the US” for GS employees. See how it doesn’t look as enticing the other way?

    WG will get a severe facelift if this passes, some (like Tobyhanna and Fort Benning) may get more money and love it while some (like Fort Knox) may just get screwed. You can’t have your cake and eat it, too. We can’t base wages specifically off like positions in the private sector THEN give locality…. sorry, that’s not how it works.

    • tk says:

      The biggest problem is the wage freeze. In South Dakota the economy is growing, I would like to finish the gov’t career but 12-15% less pay is enough to move on.

      • Fella says:

        I see.. but that’s not the problem they’re addressing. They are addressing a problem they don’t understand.

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