Salary council recommends 1 percent locality pay boost

The Federal Salary Council recommended Monday that the 3.5 percent average federal pay raise for 2005 be divided into a 2.5 percent across-the-board pay increase and a 1 percent locality pay boost.

Congress has not issued its final approval for the 3.5 percent increase for civilian federal workers. The House approved the raise last week, but it still must make it through a House-Senate conference committee and be signed by President Bush before it can become official. The council acknowledged this, but made its recommendation based on the pending legislation.

A bipartisan bloc of lawmakers have lobbied for the 3.5 percent raise to keep pace with the military pay increase. President Bush and his allies in the House tried to keep the civilian pay raise at 1.5 percent, but several influential House mebers--led by Government Reform Committee Chairman Tom Davis, R-Va., and Minority Whip Steny Hoyer, D-Md.--successfully included the higher pay boost in the fiscal 2005 Transportation, Treasury and Independent Agencies Appropriations Act (H.R. 5025).

Several observers in Congress said they expect the 3.5 percent pay raise to survive the conference committee and reach the president's desk.

Led by the Office of Personnel Management, the salary council includes federal officials and federal union representatives. On Monday, Mary Rose, vice chairwoman of the council, presented the recommendations of the council's working group. Those recommendations included the division of the anticipated pay raise, noting that locality pay raises are "distributed so that locations with the largest pay gaps receive the largest increases."

The salary council noted that the final decision on dividing the average 3.5 percent pay raise is left to the president.

Colleen Kelley, the president of the National Treasury Employees Union and a council member, asked whether the group was recommending that all federal civilian employees receive part of the 1 percent locality pay raise. That has been the recommendation in previous years, and council members agreed that the trend should continue.

The government established the locality pay system under the 1990 Federal Employees Pay Comparability Act. Federal workers in 31 metropolitan areas, ranging from Atlanta and Washington to Huntsville, Ala., receive special pay based on the cost of labor in each city. Outside of the 31 areas, federal workers in the 48 contiguous states are covered by a "Rest of the U.S." locality pay category.

OPM is soliciting comments on a proposal, published in the Federal Register last week, that would add dozens of outlying counties to the 31 existing metropolitan locality pay areas based on commuting rates from those counties to major cities, and the number of General Schedule workers who live in them. The move would extend locality pay to about 15,000 civil service employees.