OPM Proposes Expanding Locality Pay Areas to 32,900 More Federal Employees

OPM has issued a proposed rule to add about 33,000 federal employees into locality pay areas or creating new areas.

Locality Pay Areas Continue to Expand: 73% Increase Since 2015

In December 2022, a FedSmith article had this headline within an article: “Adding About 32,000 into Locality Pay System Likely in 2024.”

That article from 2022 was accurate as the internal bureaucracy within the federal government continues its relentless march to designate or add to an ever-growing number of locality pay areas.

Since 2015, the number of locality pay areas has gone from 33 to 53, a 61% increase. The Federal Salary Council (FSC) recently recommended adding four more areas to be designated as locality pay areas and OPM is now proposing to implement this recommendation. This action will put the total number of locality pay areas at 57. That does not include the numerous additions to existing locality pay areas as outlined below.

OPM Proposed Rule Quickly Follows Publication of Pay Agent Recommendations

Earlier this month, recommendations from the President’s Pay Agent were published by OPM. In that article, FedSmith wrote: “We anticipate that OPM has been working to finalize the proposal(s) to make additions to the locality pay system as approved by the President’s Pay Agent and that the Federal Register notices will be published shortly.”

That is exactly what has happened.

In a new Federal Register notice issued on June 28, 2023, the Office of Personnel Management (OPM) wrote:

The Office of Personnel Management is proposing regulations on behalf of the President’s Pay Agent to change the geographic boundaries of General Schedule locality pay areas. The proposed changes in locality pay area definitions would be applicable on the first day of the first applicable pay period beginning on or after January 1, 2024, subject to issuance of final regulations.

Proposed Changes to Impact About 33,000 Federal Employees

OPM wrote in the Federal Register notice that the proposed rule would “most directly impact” about 32,900 General Schedule (GS) employees. Modifying existing locality pay areas will impact approximately 16,700 GS employees. Establishing the proposed four new locality pay areas will impact approximately 16,200 GS employees. Other federal employees who receive GS locality pay would be indirectly impacted at the time of an annual pay adjustment.

The list of additions in the Federal Register notice is long. Here is the first part of the proposed regulations.

Four new locality pay areas are now being proposed:

  • Fresno-Madera-Hanford, California Fresno County, CA; Kings County, CA; Madera County, CA; Mariposa County, CA; and Tulare County, CA;
  • Reno-Fernley, Nevada to include Churchill County, NV; Lyon County, NV; Storey County, NV; and Washoe County, NV;
  • Rochester-Batavia-Seneca Falls, New York to include Genesee County, NY; Livingston County, NY; Monroe County, NY; Ontario County, NY; Orleans County, NY; Seneca County, NY; Wayne County, NY; and Yates County, NY.
  • Spokane-Spokane Valley-Coeur d’Alene, Washington-Idaho to include Benewah County, ID; Kootenai County, ID; Shoshone County, ID; Ferry County, WA; Lincoln County, WA; Pend Oreille County, WA; Spokane County, WA; Stevens County, WA.

Adding to Existing Locality Pay Areas For Communities Bordered by Water and Higher-Paying Areas

The President would set locality pay rates for these four areas after they have been established by regulation as new locality pay areas.

Emporia City, Virginia is now proposed for adding to the Richmond, VA, locality pay area as an area of application. Also, Greensville County would now be included in the Richmond, VA, locality pay area as an area of application.

OPM is now following a system of adding locations to existing pay areas bordered only by water and higher-paying locality pay areas. The reason for this, according to OPM, is that these areas are similar to locations completely bordered by land included in higher-paying locality pay areas.

Based in part on this new theory, the following areas are proposed for inclusion into locality pay areas:

  • Dukes and Nantucket Counties, Massachusetts to be included in the Boston-Worcester-Providence to be included in one large locality area including portions of: MA-RI-NH-CT-ME-VT;
  • Huron County, Michigan, to be included in the Detroit-Warren-Ann Arbor, MI, locality pay area;
  • Pacific and San Juan Counties, Washington, to be included in the Seattle-Tacoma, WA, locality pay area;
  • Windham County, Connecticut to be added to the Boston-Worcester-Providence, MA-RI-NH-CT-ME-VT locality pay area as the locality pay is higher in this locality pay area;
  • Including Alpine County, CA, in the proposed Sacramento-Roseville, CA-NV locality pay area;
  • Caroline County, Virginia, currently in the Richmond, VA, locality pay area, would be added into the increasingly large Washington-Baltimore-Arlington, DC-MD-VA-WV-PA locality pay area

Locations to be Added to Existing Locality Pay Areas

Albany-Schenectady, New York-Massachusetts

Greene County, NY; and Hamilton County, NY.

Albuquerque-Santa Fe-Las Vegas, New Mexico

Mora County, NM.

Atlanta—Athens-Clarke County—Sandy Springs, Georgia-Alabama

Cherokee County, AL; Cleburne County, AL; Lee County, AL; Randolph County, AL; Russell County, AL; Banks County, GA; Chattahoochee County, GA; Elbert County, GA; Floyd County, GA; Franklin County, GA; Gilmer County, GA; Greene County, GA; Habersham County, GA; Harris County, GA; Lumpkin County, GA; Marion County, GA; Muscogee County, GA; Putnam County, GA; Rabun County, GA; Stephens County, GA; Stewart County, GA; Talbot County, GA; Taliaferro County, GA; and White County, GA.

Austin-Round Rock, Texas

Blanco County, TX; Burnet County, TX; Lee County, TX; and Milam County, TX.

Birmingham-Hoover-Talladega, Alabama

Clay County, AL; Etowah County, AL; Greene County, AL; Hale County, AL; Pickens County, AL; Tuscaloosa County, AL; and Winston County, AL.

Boston-Worcester-Providence, Massachusetts-Rhode Island-New Hampshire-Maine

Windham County, CT (redesignated from Hartford-West Hartford CT-MA locality pay area); Dukes County, MA; Nantucket County, MA; Carroll County, NH; Cheshire County, NH; Grafton County, NH; Sullivan County, NH; Orange County, VT; and Windsor County, VT.

Buffalo-Cheektowaga, New York

Allegany County, NY; and Wyoming County, NY.

Burlington-South Burlington, Vermont

Addison County, VT; Lamoille County, VT; and Washington County, VT.

Charlotte-Concord, North Carolina-South Carolina

Alexander County, NC; Anson County, NC; Burke County, NC; Caldwell County, NC; Catawba County, NC; and Chesterfield County, SC.

Chicago-Naperville, Illinois-Indiana-Wisconsin

Boone County, IL; Iroquois County, IL; Ogle County, IL; Stephenson County, IL; Winnebago County, IL; and Starke County, IN.

Cincinnati-Wilmington-Maysville, Ohio-Kentucky-Indiana

Ripley County, IN; Switzerland County, IN; Carroll County, KY; Fleming County, KY; Lewis County, KY; Owen County, KY; Robertson County, KY; Adams County, OH; and Highland County, OH.

Cleveland-Akron-Canton, Ohio

Ashland County, OH; Columbiana County, OH; Crawford County, OH; Holmes County, OH; Mahoning County, OH; Richland County, OH; Trumbull County, OH; Wayne County, OH; and Mercer County, PA.

Columbus-Marion-Zanesville, Ohio

Coshocton County, OH; Hardin County, OH; Morgan County, OH; Noble County, OH; Pike County, OH; and Vinton County, OH.

Corpus Christi-Kingsville-Alice, Texas

Duval County, TX; Live Oak County, TX; and Refugio County, TX.

Dallas-Fort Worth, Texas-Oklahoma

Carter County, OK; Love County, OK; Hill County, TX; Jack County, TX; Montague County, TX; Rains County, TX; and Van Zandt County, TX.

Davenport-Moline, Iowa-Illinois

Lee County, IL; Whiteside County, IL; Cedar County, IA; Jackson County, IA; and Louisa County, IA.

Dayton-Springfield-Sidney, Ohio

Allen County, OH; Auglaize County, OH; Mercer County, OH; and Van Wert County, OH.

Denver-Aurora, Colorado

Lincoln County, CO.

Des Moines-Ames-West Des Moines, Iowa

Adair County, IA; Clarke County, IA; Greene County, IA; Hamilton County, IA; Lucas County, IA; Mahaska County, IA; Marion County, IA; Monroe County, IA; and Poweshiek County, IA.

Detroit-Warren-Ann Arbor, Michigan

Clinton County, MI; Eaton County, MI; Huron County, MI; Ingham County, MI; Jackson County, MI; Sanilac County, MI; Shiawassee County, MI; and Tuscola County, MI.

Harrisburg-Lebanon, Pennsylvania

Juniata County, PA.

Houston-The Woodlands, Texas

Colorado County, TX; Grimes County, TX; Jackson County, TX; and Madison County, TX.

Huntsville-Decatur-Albertville, Alabama

Colbert County, AL; Lauderdale County, AL; and Lincoln County, TN.

Indianapolis-Carmel-Muncie, Indiana

Benton County, IN; Blackford County, IN; Carroll County, IN; Clinton County, IN; Fayette County, IN; Fountain County, IN; Lawrence County, IN; Monroe County, IN; Owen County, IN; Randolph County, IN; Rush County, IN; Tippecanoe County, IN; Tipton County, IN; Warren County, IN; and Wayne County, IN.

Kansas City-Overland Park-Kansas City, Missouri-Kansas

Anderson County, KS; Carroll County, MO; Daviess County, MO; Gentry County, MO; Henry County, MO; and Holt County, MO.

Laredo, Texas

Jim Hogg County, TX; and La Salle County, TX.

Milwaukee-Racine-Waukesha, Wisconsin

Fond du Lac County, WI; and Sheboygan County, WI.

Minneapolis-St. Paul, Minnesota-Wisconsin

Blue Earth County, MN; Brown County, MN; Dodge County, MN; Fillmore County, MN; Kanabec County, MN; Meeker County, MN; Morrison County, MN; Mower County, MN; Nicollet County, MN; Olmsted County, MN; Pine County, MN; Steele County, MN; Wabasha County, MN; Waseca County, MN; and Polk County, WI.

New York-Newark, New York-New Jersey-Connecticut-Pennsylvania

Sullivan County, NY; and Wayne County, PA.

Omaha-Council Bluffs-Fremont, Nebraska-Iowa

Fremont County, IA; Shelby County, IA; and Burt County, NE.

Philadelphia-Reading-Camden, Pennsylvania-New Jersey-Deleware-Maryland

Sussex County, DE; Somerset County, MD; Wicomico County, MD; Worcester County, MD; and Schuylkill County, PA.

Phoenix-Mesa-Scottsdale, Arizona

Gila County, AZ.

Pittsburgh-New Castle-Weirton, Pennsylvania-Ohio-West Virginia

Belmont County, OH; Cambria County, PA; Greene County, PA; Somerset County, PA; Marshall County, WV; and Ohio County, WV.

Portland-Vancouver-Salem, Oregon-Washington

Wahkiakum County, WA.

Raleigh-Durham-Chapel Hill, North Carolina

Caswell County, NC; Edgecombe County, NC; Halifax County, NC; Moore County, NC; Nash County, NC; Northampton County, NC; Warren County, NC; and Wilson County, NC.

Richmond, Virginia

Brunswick County, VA; Essex County, VA; Greensville County, VA; Nottoway County, VA; and Emporia City, VA.

Sacramento-Roseville, California, Nevada

Alpine County, CA; Amador County, CA; Butte County, CA; Colusa County, CA; and Sierra County, CA.

San Antonio-New Braunfels-Pearsall, Texas

Gillespie County, TX; Gonzales County, TX; Karnes County, TX; Kerr County, TX; and McMullen County, TX.

San Jose-San Francisco-Oakland, California

Calaveras County, CA; Merced County, CA; and Stanislaus County, CA.

Seattle-Tacoma, Washington

Grays Harbor County, WA; Pacific County, WA; and San Juan County, WA.

St. Louis-St. Charles-Farmington, Missouri-Illinois

Fayette County, IL; Greene County, IL; Montgomery County, IL; Randolph County, IL; Washington County, IL; Crawford County, MO; Gasconade County, MO; Iron County, MO; Madison County, MO; Montgomery County, MO; Pike County, MO; Ste. Genevieve County, MO; and Washington County, MO.

Virginia Beach-Norfolk, Virginia-North Carolina

Chowan County, NC; Hertford County, NC; Middlesex County, VA; Southampton County, VA; Surry County, VA; and Franklin City, VA.

Washington-Baltimore-Arlington, District of Columbia-Maryland-Virginia-West Virginia-Pennsylvania

Alleghany County, MD; Caroline County, MD; Fulton County, PA; Caroline County, VA (redesignated from Richmond, VA locality pay area); Madison County, VA; Orange County, VA; Shenandoah County, VA; Westmoreland County, VA; Hardy County, WV; and Mineral County, WV.

Proposed Changes Almost Certain to be Implemented

In the past, once an OPM regulation on locality pay areas has been proposed, the final decision implementing the proposal is issued a few months later. While the date the final rule will be approved is unknown, it will likely be late in the year as the proposal will go into effect in January 2024.

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