No New Locality Pay Areas Added for January 2018

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By on December 22, 2017 in Pay & Benefits with 0 Comments
The Alamo in San Antonio, TX at night

The Alamo, San Antonio, TX

In its report on 2017 locality pay, the Federal Salary Council recommended that Burlington, Vermont and Virginia Beach, Virginia be established as new locality pay areas. These areas would be in addition to the 13 new locality pay areas established as new locality pay areas in January 2016. Establishing these areas as locality pay areas would provide additional pay for many employees working in those areas.

In an article entitled Will Burlington and VA Beach Become Locality Pay Areas?, the FedSmith article noted the Federal Salary Council has also recommended that Birmingham, Alabama and San Antonio, Texas be added as new locality pay areas. As noted below, now that the new Pay Agent report has been issued, there is some movement to include these cities but the answer is not definitive.

2018 Decisions by the President’s Pay Agent

The President’s Pay Agent, which makes the final decision on recommendations by the Federal Salary Council, has now issued its report on locality pay for 2018. As frequently happens, there is both good and bad news for federal employees who were hoping to see an uptick in their paychecks for 2018 by being added as a new locality pay area.

Adding Burlington and Virginia Beach

The Pay Agent agrees, in its latest report, with the Federal Salary Council that Burlington and San Antonio should be added to the list of federal locality pay areas. But, it noted, they have not determined when this should happen. Here are the Pay Agent’s comments:

We plan, after appropriate notice and opportunity for comment, to establish by regulation these two new locality pay areas. BLS should deliver data separately for these two new locality pay areas and exclude them from the “Rest of U.S.” computations for its 2017 data delivery to OPM staff.

Although we agree with the Council that we should issue regulations proposing establishment of new Burlington, VT, and Virginia Beach, VA, locality pay areas, we have not yet made a final decision on the timing.

As the regulatory process has not been publicly initiated by the Office of Personnel Management (OPM), these two cities will not be included in the new locality pay rates likely to be issued with an effective date of January 2018. It is more likely the inclusion of these cities into the locality pay system will occur in January 2019.

What About Birmingham and San Antonio?

The decision on adding Birmingham, Alabama and San Antonio, Texas as new locality pay areas is less definitive.

The Pay Agent has “tentatively approved” adding these two areas as new locality pay areas. Here is the wording of the Pay Agent’s observations on adding these two areas:

We tentatively agree that, after appropriate rulemaking, separate locality pay areas should be established for Birmingham, AL, and San Antonio, TX. BLS should deliver data separately for the Birmingham-Hoover-Talladega, AL CSA and for the San Antonio-New Braunfels, TX MSA, and exclude those areas from the “Rest of U.S.” computations for future data deliveries to OPM staff.

What About San Luis Obispo County, California?

The Federal Salary Council has also recommended adding San Luis Obispo County, California into an existing locality pay area.

San Luis Obispo County is bordered to the north by the San Jose locality pay area, bordered to the south and east by the Los Angeles locality pay area, and bordered to the west by the Pacific Ocean.

The county’s land boundary is almost completely bordered by the Los Angeles and San Jose locality pay areas.

The Pay Agent noted in its report: “[W]e agree that the county should be treated as we have treated completely surrounded locations—i.e. add the adjacent ‘Rest of U.S.’ location to the locality pay area with which the location has the highest level of employment interchange. We tentatively approve the Council’s recommendation to add San Luis Obispo County to the Los Angeles locality pay area as an area of application.”

2018 Locality Pay Areas

The bottom line for the new locality areas that are discussed above—at least for now—is they will not be included in the 2018 locality pay areas. The Pay Agent stated that existing locality pay areas will remain “Until the regulatory process is complete to make the changes to locality pay areas we have tentatively approved….”

© 2019 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. Follow Ralph on Twitter: @RalphSmith47

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