Are All Federal Employees Entitled to Locality Pay?

By on April 25, 2016 in Pay & Benefits, Q&A with 10 Comments

Q: Are all federal employees entitled to locality pay?

A: Under the provisions of 5 U.S.C. 5304 and the regulations at 5 C.F.R. 531.601 through 531.611, locality rates are authorized for General Schedule positions. The rate at which locality pay is paid varies depending on the locality pay area in which the position is located. These locality pay areas are defined at 5 C.F.R. 531.603; however, the definitions of some of these areas has changed in recent years, so looking at the OPM website will give you the most current definitions.

Thus, a General Schedule employee is entitled to his or her basic GS rate plus the locality pay differential for the locality pay area in which the position is located. As you are no doubt aware, for many years the increases in locality differentials have been limited by Presidential order. Although the findings of the Federal Salary Council and the Department of Labor have indicated that GS rates are significantly behind their private sector counterparts, the President has limited the increases to much smaller amounts due to the controversy surrounding the methodology used to determine the disparities between private sector and comparable GS jobs.

In contrast, the statute regarding pay for those who are assigned to FWS jobs – those identified as WG, WL, and WS – states that they will be paid in accordance with wages paid within a local wage area. While many of the local wage areas and the locality pay areas overlap, there are some FWS locality wage areas that are separate and distinct from the GS locality pay areas. Another issue for the FWS wage scales, in recent years the FWS wage scales have been limited by statute; each fiscal year for many years, Congress has established a flat percentage increase to FWS wages rather than allowing the wages identified by local area wage surveys to take effect.

For those Federal civilian jobs not covered by the GS or FWS pay systems, it is up to the authority that created the pay system to determine whether a locality adjustment will be part of the employee’s pay. If you are covered by such a system, the FAA and the Federal banking agencies are a few of the ones not covered by the GS and/or FWS, it is best to check with your Human Resources or Payroll office to determine if a locality pay adjustment is included in the pay system.

Wayne Coleman is a federal pay expert available to help your agency avoid premium pay claims through on-site training. Contact him for more information.

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

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About the Author

Wayne Coleman’s career at various Federal agencies spanned about 32 years.  Since his retirement he has consulted on, written about, and provided training on overtime and premium pay, on the principles of FLSA coverage and exemption, and on related federal compensation issues.  He can be reached at wayneslyhouse@comcast.net.

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