Recommendations on Locality Pay for 2008 and 2009


10/15/07: As the National President of NTEU, Colleen Kelley serves on the Federal Salary Council (FSC or Council), an advisory body created under the Federal Employee Pay Comparability Act (FEPCA) to advise the President’s Pay Agent on implementation of the locality pay program established by FEPCA. NTEU National Executive Vice President Frank Ferris is also a member of the Council. The President’s “Pay Agent” is not a single person, but an entity comprised of the Secretary of Labor, the Director of the Office of Management and Budget, and the Director of the Office of Personnel Management.

Each year, the FSC meets to submit its recommendations to the Pay Agent on locality pay rates and locality pay areas. These locality pay rates are based on data from surveys of private sector labor rates conducted by the Bureau of Labor Statistics (BLS) that are used to calculate the gap between General Schedule (GS) salaries and salaries for comparable private sector in each locality pay area. Locality pay rates are based on cost of labor data and are not based on measurement of, or changes to, the cost of living in a particular area.

The Council met this year on October 3, 2007, and its report to the Pay Agent will include the following recommendations:



  • Locality Pay Rates for 2009: Each year, the FSC recommends full implementation of locality pay pursuant to the terms of FEPCA. For 2009, full implementation of FEPCA would result in locality pay rates averaging 37.01%, from a low of 23.39% in the Rest of U.S. (RUS) locality pay area to a high of 59.84% in San Francisco. These rates are based on pay gaps that are, on average, about 6% higher than the target gaps from last year, due in part on continued implementation of improvements in the process used by the BLS in conducting its surveys of private sector labor rates. In contrast, the average locality rate for 2007 is 16.88%. So the gap between the current average locality rate and the updated average target gap is a whopping 23.08%. Each year the administration has rejected the recommendation to fully implement locality pay, thus denying federal employees the pay comparability they were promised when the first President Bush signed FEPCA back in 1991.



  • Locality Pay Rates for 2007: We already know that the administration does not support full implementation of locality pay for 2007. In fact, the President only provided 3.0% for federal employee pay increases in his ’08 budget request, which would cover both the GS increase and any increase in locality pay. This would provide only a small amount for locality pay above the 2.5% GS increase that is required under the FEPCA statute (which provides for annual GS increases equal to the Employment Cost Index minus .5%). However, several bills pending in Congress would provide an overall federal pay raise of 3.5%. NTEU is vehemently opposed to the 3.0% raise proposed by the administration and has always pushed for at least 3.5%. Since we do not yet know the overall increase for 2008, the FSC is recommending that whatever the final amount, that at least 2.5% be allocated to the GS increase, with the remainder used to fund locality pay increases. The actual change in locality pay would vary for each locality pay area, with the largest increases going to those areas with the largest remaining pay gaps.



  • Locality Pay Areas: The FSC has not recommended any changes to locality pay areas for 2008 or 2009. The Council considered requests from a number of areas, including Albany, New York, and Berkshire County, Massachusetts, but rejected these requests for a number of reasons.


"As a member of the FSC, I am proud of NTEU’s role in addressing the concerns raised by federal employees and our success in making significant improvements to the locality pay program," NTEU President Kelley recently stated. "However, there is still much to be done. We will continue our fight for full funding and implementation of the locality pay program, which is urgently needed to address the pay gap with the private sector and ensure that the federal government continues to attract and retain the highest caliber employees to meet its mission to serve and protect the American public."