President's Pay Agent rejects locality pay expansion for 5 cities

Friday - 3/23/2012, 10:10am EDT

The President's Pay Agent (PPA) rejected a proposal by the Federal Salary Council (FSC) to expand locality pay to five new cities.

Locality pay increases salaries of federal workers in high-cost locations based on a formula.

In November 2011, the FSC recommended expanding existing pay areas and adding additional localities in 2013. While it recommended not using data from the 2011 Occupational Employment Statistics (OES)/National Compensation Survey (NCS) model, FSC did ask PPA to use an "appropriately aged" formula based on the model to determine the eligibility of five cities — Albany, N.Y.; Albuquerque, N.M.; Bakersfield, Calif.; Charlotte, N.C.; and Harrisburg, Pa.

After reviewing the recommendations, PPA rejected expanding locality pay for the five cities saying if it could not use the 2011 model in current locality pay areas, it shouldn't use the model in other areas until issues with the model were resolved.

In its annual report on General Schedule Locality-Based Comparability Payments, PPA said "new pay areas must be selected in a systematic fashion, that changes in existing pay area boundaries should be considered only after new metropolitan area definitions are published and new commuting pattern data covering all counties in the country are available, and that any such changes be made when the government can better afford them."

In addition, PPA preferred to approve localities that had gone through a systematic selection process, which was not the case here. FSC had recommended the five cities for higher locality pay because employee groups in the cities had requested the increase.

FSC also recommended restoring funding to the Bureau of Labor Statistics (BLS) so it could continue the full NCS. Although PPA agreed that is was important to obtain sufficient salary survey data, it considered the $9.8 million it would take to restore NCS to be "a considerable sum." It asked FSC to reassess the recommendation next year. That would give FSC the chance to review an additional year of salary information from the merging of OES/NCS program data.

"While the former NCS program may provide for a more stable means of measuring pay gaps compared to relying on the limited sample now available as a result of BLS budget limitations, we do not believe it is feasible to provide more funding for the NCS program before exploring other options," the report stated.