Pay Agent Shoots Down Large Expansion of Locality Pay

A large proposed expansion of locality pay has been denied for 2016. Here are the details and who is impacted.

A number of federal employees who are expecting a slightly larger pay raise in 2017 than the overall average raise will be disappointed.

The Federal Salary Council recommended expanding existing locality pay areas to include a number of new areas. Some areas did not include any or had only one or two federal employees working under the GS pay scale.

Expanding locality pay areas is effectively a way of providing a pay raise through an administrative process. It also does not raise questions in Congress or create publicity about a pay raise.

Proposed Expansion of Locality Pay

The Salary Council referred to these areas as “proposed new areas of application….” Some of these new locations would have been included in separate locality pay areas. Others would have been added to existing locality areas. The recommendation was to implement these in 2016.

In Raising Federal Employee Pay By Expanding Locality Pay Areas, we listed new geographic areas the Salary Council was recommending adding to the locality pay system.

The Federal Salary Council consists primarily of federal union representatives. It generally recommends more inclusion in existing pay, more locality pay areas and more money for the locality pay areas. The decision to accept or reject Salary Council recommendations is up to the President’s Pay Agent.

Adding Burlington, VT and Virginia Beach, VA

The Pay Agent’s report for 2017 locality pay nixed many of the latest recommendations for expanding pay areas. The Pay Agent did decide to include Burlington, Vermont and Virginia Beach, Virginia as new locality pay areas as recommended.

These cities will not be added in 2017. The regulatory process will take awhile to complete. These two new areas will likely be included as new pay areas in 2018.

Adding Areas Adjacent to Existing Locality Pay Areas

The Salary Council wanted to ignore the number of federal employees working in an area as a way of deciding to add new areas. The Pay Agent rejected this and again concluded “…we will not adopt, as currently presented, the Council’s recommendation to eliminate the GS employment criterion.”

So, “[B]ecause the GS employment criterion will continue to apply, there is no reason to increase the commuting interchange threshold for adjacent single counties.”

What About Adding to Existing Locality Pay Areas?

The Salary Council recommended adding a number of other counties and “micropolitan” areas. That would have expanded the locality pay system while reducing the “Rest of the US” pay category. For a listing of this large number of new areas, see Raising Federal Employee Pay By Expanding Locality Pay Areas and 100+ “Rest of U.S.” Locations Recommended for Federal Locality Pay.

The Pay Agent did not go along with this large expansion of locality pay areas. Here is the conclusion of the Pay Agent in its latest report:

The Pay Agent believes any such “Rest of U.S.” locations considered for inclusion in a separate locality pay area should be evaluated consistently and in the context of the GS employment criterion not being eliminated. Individuals concerned about locations that are bordered by multiple separate locality pay areas and remain in the “Rest of U.S.” locality pay area may provide testimony to the Federal Salary Council on locations of concern.


The Federal Salary Council has been routinely recommending an expansion of the locality pay system. It is a way of raising salaries of many more federal employees. To paraphrase the omnipresent GEICO insurance ads: “That is what they do.”

The Pay Agent considers the recommendations.  It often rejects the proposal after noting its appreciation for the Salary Council’s “continuing evaluation of analytic methods used in the locality pay program…”

The Salary Council has been influential in adding new areas to the locality pay system. Burlington, VT and Virginia Beach, VA will be added in another year. Birmingham, AL and San Antonio, TX are likely to be added in one or two more years. In 2016, more than 102,000 federal employees were added. This was done by establishing new locality pay areas as a result of the Salary Council recommendations.

The federal administrative system allows continuing efforts to make incremental changes without legislative approval in many areas. In the area of federal pay, the consistent efforts by the Salary Council have paid off. Each year, they conclude there are large pay disparities harming federal employees. Each year, they recommend adding locality pay areas. Over time, they have been very successful. No doubt, many federal employees appreciate their efforts. A small raise can result in a substantial amount over time.

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. Follow Ralph on Twitter: @RalphSmith47