Q: Why is [my city] not included in a locality pay area? The cost of living is very high in [my city] and it seems unfair that we do not receive locality pay.
A: Locality pay under the General Schedule (GS) is not based on the cost of living. Rather, GS locality pay increases are based on a comparison by the Bureau of Labor Statistics. This federal agency measures non-federal compensation in a labor market and compares it to federal pay for GS employees performing similar work in the same geographic area.
BLS will, for example, compare the average salary of an engineer at a private company or state with the average salary of a federal employee who is an engineer in the same city. The pay gap between the two is a major factor in the GS locality pay adjustment for a specific area during a given year. The cost of housing or other living expenses in an area is not the major factor.