OPM holds senior executives to 2002 locality pay

Senior Executive Service members will get locality pay in 2003, but it will not be an increase over 2002 locality pay rates, according to the Office of Personnel Management.

The President's Pay Agent, comprised of the Labor secretary and the directors of the Office of Management and Budget and OPM, announced the decision in a Dec. 5 memorandum to the heads of federal departments and agencies.

Annual SES pay increases are computed under the same two-part formula used for civil service employees' annual increases: an across-the-board increase based on increases in the Labor Department's Employment Cost Index, plus an increase in supplemental locality pay that varies from city to city based on local labor costs. On Nov. 30, President Bush said he would give civil service employees a 3.1 percent across-the-board increase in 2003, but no locality pay raise.

So senior executives will be paid the same locality pay rates that they received in 2002. Executive pay, including basic pay and locality pay, is capped at $138,200 in 2002 because SES salaries are linked to congressional and Cabinet-level salaries. The cap will most likely be about $142,500, or 3.1 percent higher, in 2003.

Unlike civil service employees, senior executives and other non-General Schedule employees, including administrative law judges, members of contract appeals boards, senior-level and scientific and professional positions, Foreign Service members and Senior Foreign Service members do not automatically receive additional compensation based on labor costs in the areas where they work, according to Joe Radcliffe, a specialist in OPM's Office of Compensation Administration. Other employees affected by this policy include the Park Police and uniformed Secret Service officers. These federal employees must wait for the Pay Agent to extend locality pay to them each year.

According to the memo, extending the 2002 locality pay rates was "necessary in order to prevent a reduction in the total pay" of the approximately 17,500 affected employees.

Bush must issue an executive order approving the measure by the end of the year, Radcliffe said.