About 102,000 Feds to Get Pay Raise in New and Expanded Locality Pay Areas

By on October 27, 2015 in Pay & Benefits with 29 Comments

About 102,000 federal employees will receive a new pay increase in 2016 under rules just published establishing new “locality pay” zones and expanding most of the existing locality pay areas. (See 2016 Locality Pay and How It Will Impact Your Paycheck)

The Federal Register notice of the changes notes: “Establishing 13 new locality pay areas will impact about 102,000 GS employees. Implementing the 13 new locality pay areas will not automatically change locality pay rates now applicable in those areas because locality pay percentages are established by Executive order….”

The new regulations are applicable on the first day of the first pay period beginning on or after January 1, 2016.

The new Federal Register notice also states that: “Using February 2013 OMB-defined metropolitan area definitions as the basis for locality pay area boundaries and using updated commuting patterns data to evaluate potential areas of application add a number of counties now included in the ‘Rest of U.S.’ locality pay area to separate locality pay areas, which will impact about 6,300 GS employees.”

According to the latest report of the President’s Pay Agent dated October 23, 2015:

The Pay Agent still plans, after appropriate rulemaking, to establish the 12 new locality pay areas, and BLS should deliver data separately for these 12 new locality pay areas and exclude them from the “Rest of U.S.” computations for its 2015 data delivery to OPM staff.

The 13 new locality pay areas and the target pay rate previously cited by the Federal Salary Council are:

Locality Area Locality Rate (Target Pay Gap)
Albany- Schenectady, NY 46.02%
Albuquerque-Santa Fe-Las Vegas, NM  34.51%
Austin-Round Rock, TX  47.47%
Charlotte-Concord, NC–SC  41%
Colorado Springs, CO  48.20%
Davenport- Moline, IA–IL  40.14%
Harrisburg-York- Lebanon, PA  43.76%
Laredo, TX  54.74%
Kansas City- Overland Park-Kansas City, MO–KS  11.88%
Las Vegas-Henderson, NV–AZ  51.39%
Palm Bay- Melbourne-Titusville, FL  38.89%
St. Louis-St. Charles-Farmington, MO–IL  45.23%
Tucson-Nogales, AZ  47.47%

The Kansas City area is still being treated somewhat differently. According to the Pay Agent: ”

“We agree that, after appropriate rulemaking, a separate Kansas City locality pay area should be established. BLS (Bureau of Labor Statistics) should deliver data separately for Kansas City and exclude it from the ‘Rest of U.S.’ computations for its 2015 data delivery to OPM staff.”

The report of the President’s Pay Agent makes several observations regarding the 2016 locality pay areas.

First, “The average locality comparability rate in 2016…would be 54.26 percent under the methodology used for this report (based on the disparity to close). The average rate authorized in 2014 was 19.82 percent using 2014 payroll weights. The locality rates included in this report would represent a 28.74 percent average pay increase over 2014 locality rates.” For those readers who wish to encounter the obtuse descriptions of the pay agent to determine your pay rate in 2016, the full report is enclosed below. For most readers, we will provide the final figures when they become available and they will presumably be published in the near future.

Second, the new locality pay areas have been “tentatively approved” by the Pay Agent and now approved according to the Federal Register notice. Since the Federal Register notice has now been published noting the establishing of the new locality pay areas, employees in those areas are closer to learning how much their pay will actually go up in 2016.

When the new locality pay rates become available, based on data that presumably is now being furnished to the Office of Personnel Management for regulatory action, we will provide that information to readers as quickly as possible.
President’s Pay Agent Report on Locality Pay

© 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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