OPM revamps pay rules for Alaska, Hawaii, territories

The Office of Personnel Management has announced new procedures for setting pay rates for federal employees in Alaska, Hawaii and U.S. overseas territories. In the Nov. 9 Federal Register, OPM issued regulations based on the August 2000 settlement of a class-action lawsuit brought on by federal workers who thought they weren't being paid enough to work in Alaska, Hawaii, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands. The regulations are intended to better assess living costs in those areas. While federal workers in the 48 contiguous states receive locality-based salary adjustments based on cost-of-labor surveys for various occupations, most workers in the United States outside the "Lower 48" get a special pay boost of 10 to 25 percent of salary based on cost-of-living surveys that compare local prices for housing, utilities, food, transportation, furniture and other expenses with prices for similar expenses in the Washington, D.C., area. The settlement that led to the new regulations resulted in an October 2000 pay raise for many of the 47,000 federal workers in affected areas. Under the new procedures, OPM will conduct cost-of-living surveys in each area every three years and adjust pay rates accordingly. OPM will base additional annual pay adjustments on changes in the Labor Department's Consumer Price Index. Under the current pay rates, workers in Alaska, Guam and Honolulu, Hawaii receive the maximum cost-of-living adjustment {COLA) of 25 percent. COLAs are 11.5 percent in Puerto Rico and 22.5 percent in the Virgin Islands. The Hawaiian COLA varies from 16.5 percent in Hawaii County to 23.25 percent in Kauai County and 23.75 in Maui and Kalawao counties. Workers in Guam who previously received lower COLAs because they were eligible for military commissary and exchange benefits will now receive the same COLAs as others in Guam. Their COLAs will go up from 22.5 percent to 25 percent in their next paychecks. OPM rewrote the regulations in question-and-answer format, reflecting a movement across the government to write rules in plain English.