Federal Salary Council Seizing Political Opportunity Under Biden
Unions and the Biden administration are very much in sync. The unions do not criticize the administration and the administration works to award benefits to unions. As President Biden said while campaigning, “union members were the supporters who ‘brung me to the dance.’ ”
He is following up by making unions part of his plan to help Democrats in the upcoming mid-term elections. That approach may cost taxpayers a considerable amount of money but may also eventually result in increased salaries for about 33,000 federal employees by bringing them into the federal government’s locality pay system.
The folksy tenor of the president’s “brung me to the dance” remark aside, there is no doubt that appointments and policies under the Biden administration are well received by unions in general and federal employee unions in particular.
An internal working group of the Federal Salary Council recently issued a report making sweeping recommendations to expand and increase federal employee salaries under the locality pay system. These recommendations have reportedly been adopted by the Federal Salary Council and advance union objectives for which “AFGE (and other unions) ha(ve) been fighting to implement for years.”
The Biden administration will be giving the unions a chance to considerably expand the locality pay system for federal employees, and in the process, raise the pay for a large number of federal employees. Here is how the process works.
Role of the Federal Salary Council
Stephen Condrey and Janice LaChance are now serving on the Council. Earlier in her career, Ms. LaChance was AFGE’s director of communications and political action and director of OPM under President Clinton. Mr. Condrey was Salary Council Chairman under President Obama for seven years. There are six union representatives on the Salary Council.
The Salary Council is largely populated by federal union representatives. They have an interest in raising federal employee salaries and have had considerable success in expanding locality pay areas and federal salaries through this annual process. Their recommendations may or may not be accepted, but pay raises can be given to large numbers of federal employees through the locality pay system without any involvement by Congress.
Many of their recommendations from the Salary Council are not adopted or are significantly delayed by the Pay Agent. The conclusions of the Salary Council are often unique and not generally accepted by other organizations that study federal pay. But, the reality is politics plays a major role in this process.
Under the Biden administration, there is more likely to be a unique opportunity for the Salary Council, in conjunction with the President’s Pay Agent, to raise salaries for tens of thousands of federal employees through this administration process. The changes will not be implemented quickly but it is very likely there will be pay raises in store for a large number of federal employees through this process.
Role of the President’s Pay Agent
The President’s Pay Agent reviews and makes decisions on recommendations made by the Federal Salary Council. The Pay Agent is made up of the Director of the Office of Management and Budget, the Secretary of Labor, and the Director of the Office of Personnel Management.
The recommendations of the Salary Council are important as they bring to the attention of the Pay Agent possible changes in locality pay, and recommendations generally reflect the interests of the unions on the Council.
The Pay Agent makes the final decision on Salary Council recommendations. Decisions by the Pay Agent are usually made late in the year.
The locality pay process is largely unknown to the general public as it is an internal administrative process. Media organizations that report on internal policies often cite these recommendations as pay issues are obviously important to federal employees.
According to a press release from the American Federation of Government Employees (AFGE), the Federal Salary Council has recently adopted “pro-labor recommendations that would increase pay for tens of thousands of federal employees and urges the Biden administration to adopt the recommendations.”
The Office of Personnel Management has not yet published the report from the Council but the working group recommendations are public and reportedly adopted by the full Salary Council earlier this month.
Latest Recommendations from the Federal Salary Council
According to the working group summary of recommendations, overall “These Working Group recommendations would result in roughly 32,950 General Schedule (GS) employees being redesignated from the Rest of US to a separate locality pay area.”
The Council recommended new employment interchange criteria to establish locations adjacent to basic locality pay areas as areas of application. These are:
- Any proposed pay locality must have a 7.5% employment interchange rate for locations in Metropolitan Statistical Areas (MSAs) and Combined Statistical Areas (CSAs).
- For areas that aren’t MSAs or CSAs, as well as locations surrounded by different pay localities, the council recommended establishing a 20% interchange rate.
Here are some of the other recommendations that will be submitted to the President’s Pay Agent for consideration that would go into increasing the pay for tens of thousands of federal employees.
- Establishing Reno, Nevada, and Rochester, New York as new locality pay areas.
- Adding approximately 15,400 General Schedule employees from the “Rest of the US” into a separate locality pay area.
- Adding Greensville County, Virginia to the Richmond locality pay area and adding Emporia City to the Richmond pay area.
- Adding Dukes and Nantucket Counties, Massachusets to the Boston locality pay area.
- Adding Huron County, Michigan to the Detroit locality pay area.
- Adding Pacific and San Juan Counties, Washington to the Seattle locality pay area.
- Adding Fresno, California, and Spokane, Washington as new locality pay areas.
- Adding the Columbus- Auburn-Opelika, Georgia, and Alabama combined statistical areas to the Atlanta locality pay area.
Summary
The Federal Salary Council concluded that the pay disparity with the private sector now stands at 22.47%. In 2020, the Council concluded the pay disparity was 26.71%.
Their conclusions are often widely divergent from other studies that have been done, including one from the Congressional Budget Office. The CBO concluded in 2017 that federal employees often make more than private sector employees with the exception of those with more advanced degrees. That group made 24% less than private sector employees for the period covered by the study with other federal employees making higher salaries.
The differences may have been largely due to the CBO considering benefits in addition to salary. The Federal Salary Council has been adamant in not considering other benefits outside of salary in reaching its conclusions. On average, federal benefits are 52 percent higher for federal employees than private sector employees according to the CBO’s conclusions.
Political appointees who make up the President’s Pay Agent often have different objectives than the unions on the Salary Council. That is less of a consideration under the current administration though as most of the appointments have a very liberal political leaning that may frequently coincide with labor unions.
The Pay Agent usually makes its decisions late in the year. When this group decides which recommendations to adopt or reject, those that are adopted will often be implemented through regulations issued by the Office of Personnel Management. This is a process that usually takes months to implement. In other words, some of the pay raises contemplated and recommended by the Salary Council may not take place until 2024—if the Pay Agent adopts the recommendations.
Salary Council recommendations are sometimes not adopted by the Pay Agent which may take into account the overall cost to the government as well as political considerations. It is possible that 2022 is a year that will prove to be more beneficial for those who would like to see a higher pay raise for some federal employees by considerably expanding the scope of the existing locality pay system without having to involve Congress and could be implemented without much public scrutiny.
