Salary Council Recommends New Locality Pay Areas

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By on July 12, 2019 in Pay & Benefits with 0 Comments
Photo of the Des Moines, IA skyline at dusk
Des Moines, Iowa // Photo by Jason Mrachina, Flickr

The Federal Salary Council (FSC) has issued a report with its recommendations regarding locality pay starting in January 2020.

Keep in mind, the FSC makes recommendations. The actual decisions on the recommendations are made by the President’s Pay Agent. The Pay Agent’s report on the recommendations is usually issued late in the year, often as late as sometime in December.

Additions to Locality Pay

In recent years, a number of new areas have been added to the federal locality pay system. The most recent additions are:

  • Birmingham-Hoover-Talladega, AL;
  • Burlington-South Burlington, VT;
  • San Antonio-New Braunfels-Pearsall, TX;
  • Virginia Beach-Norfolk, VA-NC;
  • Corpus Christi, TX; and
  • Omaha, NE.

For 2020, the Salary Council recommends establishing Des Moines, IA, as a new locality pay area. In addition, it recommends establishing Imperial County, CA, as an additional area within the Los Angeles locality pay area.

How to Measure Pay Disparity

As it has in recent years, the Salary Council has concluded that the overall pay disparity is about 36% between federal and private sector pay.

There is also a disagreement within the Salary Council that reflects an underlying difference in philosophy. Pine County, MN and the union members of the Salary Council want to add it to the Minneapolis, MN locality pay area. The other members of the Salary Council disagreed because Pine County “does not meet the established statistical tests for such designation…. “

In effect, Council Chairman Ron Sanders and Council Members Nelson and Bullock recommend the Pay Agent consider alternatives to measuring any disparity between private and federal sector pay. They would commission the Bureau of Labor Statistics and the Office of Personnel Management (OPM) to conduct an in-depth study of the most cost-effective alternatives to better measure the disparity between Federal and non-Federal pay and other relevant elements of employee compensation such as federal employee benefits.

The unions on the Federal Salary Council appear to be primarily concerned with ensuring different measures of comparing private sector and federal sector pay do not result in lowering the disparity or possibly impacting federal employee benefits. Changing the way the Council measures pay disparity to include looking at federal employee benefits would likely reduce the appearance of a huge pay disparity between federal employees and private sector workers.

Statement by Union Members of FSC

If the different objectives were not already apparent, a union statement attached to the Federal Salary Council’s latest report provides further clarity on how the unions react to changes in measuring pay disparity:

When considering the Workgroup Report, please understand that wherever the words “some members of the workgroup” appear, it means the Administration’s political appointees to the Council. The members of the workgroup and Federal Salary Council from employee organizations (the American Federation of Government Employees, AFL-CIO, the National Treasury Employees Union, the National Federation of Federal Employees, AFL-CIO, and the Fraternal Order of Police, AFL-CIO) did not support the Chairman’s effort to use the Council to promote the Administration’s policy agenda of redefining “pay disparities” to include non-pay benefits or replacing the locality pay system with one that varies pay adjustments by occupation and manager discretion.

Statement by Non-Union Members of FSC

On the other hand, this statement from Council Chairman Ron Sanders and Members Katja Bullock and Jill Nelson (non-union members) is included in the FSC report about how pay disparity is measured:

[W]e agree with the Pay Agent that an aggregation of both salaries and certain benefits would be a far more credible measure of the comparability between Federal and non-Federal compensation, and while such a comparison poses significant methodological challenges…we believe that the benefits of considering “total compensation” in assessing the Federal government’s ability to recruit and retain talent are important enough to warrant further, in-depth study by the Pay Agent.


Effective Dates for Locality Pay Raise

The actual locality pay amounts for 2020 will, with any luck, be announced late in 2019 and effective in January 2020. But, with looming disputes in Congress about raising the debt ceiling, approving a federal budget and the possibility of another government shutdown before any final resolution, the actual date of any federal pay raise is not possible to predict.

Summary

The federal pay system is a mess and any uniformity has been disintegrating as new systems and deviations proliferate. Federal pay in general and the locality pay system, in particular, will continue to be a topic of contention between employee unions and other organizations and interested parties.

Unions will point to the existing method of comparison as a scientific basis for arguments to significantly increase federal pay. Those outside the government and some politicians will see failing to include the federal benefits package in any pay comparison as stacking the deck and preventing an objective comparison of federal and private sector pay. (See Dueling Statistics on Federal Employee Pay)

In short, there is no end to the continuing arguments about the overall fairness of pay and benefits for federal employees.

© 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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