MEMORANDUM FOR HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES
From:
John Berry, Director
Subject: Extension of Locality Payments to Non-General Schedule Employees
Section 5304(h) of title 5, United States Code, requires that extensions of locality pay to non-General Schedule (GS) categories of employees be renewed each year. The President’s Pay Agent has decided to extend the 2011 locality payments to the same Governmentwide and single-agency categories of employees authorized to receive the 2010 locality payments. If a pay freeze is enacted for 2011, these categories of employees will be entitled to continue to receive locality payments at the 2010 level.
Locality payments will be extended to the Governmentwide categories shown in Attachment 1 with no further action required by any agency. Under the statute, locality payments may be extended to single-agency categories of employees only at the request of the head of an Executive agency. Attachment 2 shows single-agency categories currently receiving locality pay, which will be extended locality pay in 2011 without any further action required by any agency unless the head of an Executive agency requests that an extension not be re-approved.
Under the statute, locality payments may not be extended to employees paid under the senior level (SL) and scientific and professional (ST) pay systems, members of the Senior Executive Service (SES) and similar pay systems (except certain SL/ST and SES employees in nonforeign areas, as described below), employees paid under the critical pay authority, senior executives in temporary organizations, prevailing rate employees, categories of positions paid Executive Schedule (EX) rates of pay, or any position that has a rate of basic pay higher than the rate for level IV of the Executive Schedule (EX-IV).
The Nonforeign Area Retirement Equity Assurance Act (NAREAA; sections 1911-1919 of Public Law 111-84, October 28, 2009) extends locality pay to employees in SES, SL, and ST positions whose official worksite was located in a nonforeign area (as defined in 5 U.S.C. 5941) on the day before the first day of the first pay period beginning on or after January 1, 2010. Therefore, these SES, SL, and ST employees will receive the locality pay rate for their area, subject to the applicable locality rate cap established by 5 U.S.C. 5304(g)—i.e., EX-II if the employee is covered by an appraisal system certified under 5 U.S.C. 5307(d), or EX-III if not so covered. For additional information, see CPM 2009-27, December 30, 2009, which is available at www.chcoc.gov/Transmittals/TransmittalDetails.aspx?TransmittalID=2732. In particular, see the section entitled “SES and SL/ST Employees” and the example provided in Attachment 3.
Please contact Allan Hearne, of the U.S. Office of Personnel Management’s (OPM’s) Pay Systems staff, at (202) 606-2838 or by email at pay-performance-policy@opm.gov, by December 15, 2010, if you do not want locality payments extended in 2011 to a single-agency employee category in your agency for which such payments were previously authorized by the Pay Agent. Please note that a decision not to extend locality payments in 2011 to a category of employees means that those employees would no longer be entitled to any locality payment. All employees in a given locality pay area who receive locality payments in 2011 must receive the same percentage as received by GS employees in that area, subject to applicable pay caps.
New requests for extending locality payments to single-agency categories of non-GS employees should be submitted by the agency head or his or her designee to the following address no later than December 15, 2010, to ensure the extension takes effect beginning on the first day of the first pay period beginning on or after January 1, 2011:
The Honorable John Berry
Director
U.S. Office of Personnel Management
1900 E Street, NW.
Washington, DC 20415-0001
In your request, please include the following information:
(1) The legal authority under which the employees are paid;
(2) The types of employees to be paid;
(3) The number of employees to be covered by the extension; and
(4) A contact person name, telephone number, and e-mail address at your agency.
A copy of new requests for extending locality payments to single-agency categories also should be sent to the OPM Human Capital Officer for your agency.
Under 5 U.S.C. 5304(g) and 5 CFR 531.606, locality rates may not exceed the rate for level III of the Executive Schedule for administrative law judges and members of Boards of Contract Appeals. Locality rates for all other categories of non-GS employees (except certain SES, SL, and ST employees in nonforeign areas as previously described) may not exceed (1) the rate for level IV of the Executive Schedule when the maximum scheduled annual rate of pay for such positions is less than or equal to the maximum payable scheduled annual rate of pay for GS-15 or (2) the rate for level III of the Executive Schedule when the maximum scheduled annual rate of pay for such positions exceeds the maximum payable scheduled annual rate of pay for GS-15.
For the President’s Pay Agent:
John Berry, Director
U.S. Office of Personnel Management
cc: The Honorable Hilda L. Solis
Secretary of Labor
The Honorable Jacob J. Lew
Director, Office of Management and Budget
Chief Human Capital Officers
Human Resources Directors
