Raising Federal Employee Pay By Expanding Locality Pay Areas

By on August 21, 2016 in Pay & Benefits with 70 Comments

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Understanding the federal pay system and locality pay rests comfortably between difficult and impossible. Even when regularly working in this field in an agency, the differences in pay systems may render an expert in one agency lacking knowledge about how federal pay is set in other agencies.

We know that, in addition to some agencies having authority for separate systems, the locality pay system for General Schedule (GS) employees is expanding. The Federal Salary Council is pushing to significantly expand existing localities to incorporate larger geographic areas as well as adding new ones.

A listing of the locality pay areas for 2017 is below. But, before getting excited over the locality pay rates listed, this is the percentage cited by the Federal Salary Council as the differential in pay between federal and private sector. As you can see in the GS Pay Calculator, the actual locality pay differential for 2016 was considerably lower for each city listed. While we do not know the rates for 2017, the increase for next year will again be relatively small.

This article highlights proposed locality areas for 2017 as detailed by the Federal Salary Council. It includes new geographic areas they are recommending adding to the locality pay system.

Locality Pay Areas for 2017

Locality Pay Area Pay Gap Locality rate (target pay gap)
Albany, NY 52.92% 45.64%
Albuquerque, NM 43.88% 37.03%
Alaska 79.02% 70.50%
Atlanta, GA 52.54% 45.28%
Austin, TX 55.49% 48.09%
Boston, MA 68.74% 60.70%
Buffalo, NY 55.67% 48.26%
Charlotte, NC 49.34% 42.23%
Chicago, IL 65.72% 57.83%
Cincinnati, OH 43.04% 36.23%
Cleveland, OH 45.05% 38.14%
Colorado Springs, CO 55.68% 48.27%
Columbus, OH 49.41% 42.30%
Dallas, TX 64.97% 57.11%
Davenport, IA 47.43% 40.41%
Dayton, OH 48.55% 41.48%
Denver, CO 70.48% 62.36%
Detroit, MI 61.53% 53.84%
Harrisburg, PA 48.20% 41.14%
Hartford, CT 65.58% 57.70%
Hawaii 49.51% 42.39%
Houston, TX 80.45% 71.86%
Huntsville, AL 57.14% 49.66%
Indianapolis, IN 43.03% 36.22%
Kansas City, MO-KS 46.65% 39.67%
Laredo, TX 70.81% 62.68%
Las Vegas, NV 53.62% 46.30%
Los Angeles, CA 82.26% 73.58%
Miami, FL 53.09% 45.80%
Milwaukee, WI 53.70% 46.38%
Minneapolis, MN 61.64% 53.94%
New York, NY 84.31% 75.53%
Palm Bay, FL 45.81% 38.87%
Philadelphia, PA 68.05% 60.05%
Phoenix, AZ 58.06% 50.53%
Pittsburgh, PA 50.97% 43.78%
Portland, OR 57.07% 49.59%
Raleigh, NC 49.91% 42.77%
Rest of US 37.23% 30.70%
Richmond, VA 57.00% 49.52%
Sacramento, CA 65.74% 57.85%
San Diego, CA 85.17% 76.35%
San Francisco, CA 101.06% 91.49%
Seattle, WA 76.27% 67.88%
St. Louis, MO 52.60% 45.33%
Tucson, AZ 47.93% 40.89%
Washington, DC 87.06% 78.15%
All Pay Areas 61.66% 53.96%

For example, Lewiston, Maine is about 135 miles from Boston, Massachusetts and, according to MapQuest, driving to Boston is about two hours and twenty minutes. Boston is a locality pay area with a “pay bump” of 25.19%.

Other than being in New England, what does Lewiston have to do with Boston as far as locality pay is concerned? Here is the answer according to the Federal Salary Council: “Under the locality pay area definitions applicable in January 2016, the Portland-Lewiston-South Portland, ME, Combined Statistical Area is included in the Boston locality pay area as an area of application….”

In effect, the Salary Council is recommending expanding the number of federal employees in a variety of areas into the locality pay system. It bases these recommendations to expand federal pay based on several criteria.

For example, here are recommendations for expanding locality pay into an existing pay area to employees who may be a considerable distance away from one of these major cities.

Listed below are “metropolitan areas” that the Salary Council recommends be incorporated into an existing pay area. Check out the report of the Council for more information.

Adjacent “Rest of U.S.” Multi-County Metropolitan Areas with 7.5 Percent or Higher Commuting Rate

Pay Area Metropolitan Area Employment Interchange GS Employees
ATLANTA Rome-Summerville, GA 27.12% 75
BOSTON Claremont-Lebanon, NH-VT 9.98% 977
CHARLOTTE Hickory-Lenoir, NC 13.00% 156
CHICAGO Rockford-Freeport-Rochelle, IL 11.96% 213
CLEVELAND Youngstown-Warren, OH-PA 10.92% 979
COLUMBUS Mansfield-Ashland-Bucyrus, OH 11.56% 245
DAVENPORT Dixon-Sterling, IL 12.77% 35
DAYTON Lima-Van Wert-Celina, OH 9.79% 169
DETROIT Lansing-East Lansing-Owosso, MI 10.00% 804
DETROIT Saginaw-Midland-Bay City, MI 7.76% 714
DETROIT Toledo-Port Clinton, OH 9.01% 717
HUNTSVILLE Florence-Muscle Shoals, AL 11.49% 116
INDIANAPOLIS Bloomington-Bedford, IN 11.35% 113
INDIANAPOLIS Lafayette-West Lafayette-Frankfort, IN 8.67% 199
INDIANAPOLIS Richmond-Connersville, IN 10.81% 40
MINNEAPOLIS Mankato-New Ulm-North Mankato, MN 12.35% 64
PHILADELPHIA Salisbury, MD-DE 9.94% 367
PITTSBURGH Johnstown-Somerset, PA 10.41% 491
PITTSBURGH Wheeling, WV-OH 14.69% 229
RALEIGH Rocky Mount-Wilson-Roanoke Rapids, NC 10.58% 88
SAN FRANCISCO Modesto-Merced, CA 18.91% 708
WASHINGTON, DC Cumberland, MD-WV 9.95% 365

The table above is just one of the groupings of potential new employees into the locality pay system.

Adjacent “Rest of U.S.” Single-County MSAs with 7.5 Percent or Higher Commuting

Here is another group of employees that may eventually benefit from locality pay using different criteria cited by the Federal Salary Council.

Pay Area Place Name Employment Interchange Number of GS Employees Adjacent Core-Based Statistical Areas
MILWAUKEE Fond du Lac Co. WI 22.92% 31 Fond du Lac, WI Metropolitan Statistical Area
HUNTSVILLE Etowah Co. AL 11.01% 127 Gadsden, AL Metropolitan Statistical Area
DETROIT Jackson Co. MI 21.93% 46 Jackson, MI Metropolitan Statistical Area
MILWAUKEE Sheboygan Co. WI 13.62% 18 Sheboygan, WI Metropolitan Statistical Area

An astute reader may be wondering if others are being recommended for future inclusion?

Yes, there are a number of other areas recommended for future inclusion in locality pay areas. We will cover these in a separate article.

© 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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