Advisory council suggests adding new localities, adjusting some existing ones to encompass more federal workers, and loosening requirements for locality designation.
A council that advises government officials on federal employee compensation has issued formal recommendations that, if implemented, would give 16,000 existing employees a salary increase. The council consists of 8 seats, three of which are appointed by the President and the remain five seats are filled by leaders of federal worker unions. Due to the majority of the council consisting of union leaders, the council was at odds with the previous administration. One of the suggestions the council issued this month, revolving around requirements for designated localities, was previously shot down by the Trump White House in 2017. Another one of the recommendations, which would adjust existing localities, was issued unofficially last year, but President Biden had yet to appoint member for the other three seats. Stephen Condrey, the former OPM management director Janice Lachance, and James Llorens were all appointed this past March, however, with Condrey fulfilling the role of the council’s chairman. The recommendations are made to Biden’s Pay Agent – a three-person team of OPM Director Kiran Ahuja, OMB director Shalanda Young, and Labor Secretary Marty Walsh.
New and Expanded Localities
Two of the suggestions recently issued involved adding or expanding localities. The two localities of Fresno, CA and Spokane, WA were recommended to become receive a new location-based rate-of-pay for the General Schedule (GS) federal pay system. Reno, NV and Rochester, NY were also offered for future consideration. Adding these localities would boost the pay of 15,400 existing federal workers, whose jobs are already based in one of those areas.
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The following adjustments to present designated localities were also made:
- Adding Huron, MI to the Detroit locality
- Adding Greensville County and Emporia, VA to the Richmond locality
- Adding Pacific and San Juan Counties to the Seattle, WA locality
These additions would raise the salaries of another 1300 feds, give or take, and were first suggested last year before the White House had appointed the remain councilmembers.
Locality Requirements
Currently, the rules surrounding designated locality pay areas require that, to be considered for a payrate adjusted for location, the area must have 2500 active GS federal employees. Some potential locations contain 2500 GS positions, but can’t fill them past the needed threshold due to pay that isn’t competitive. (The current pay gap between public and private sector jobs is 22.47%.) However, somewhat ironically, if the locality was granted an area-based payrate, then it would be more competitive and could potentially fill those open positions quicker. This was one of suggestions to be reprised from suggestions the council issued during the Trump Administration.
Until Next Time,
**Written by Benjamin Derge, Financial Planner, ChFEBC℠. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.
