No New Locality Pay Areas in 2022

The Trump administration last week rejected the recommendations of a federal advisory council on employee compensation to add locations to the list of locality pay areas despite not meeting all the criteria for inclusion in the program that accounts for the increased labor costs of high cost-of-living regions.

Last year, the Federal Salary Council unanimously recommended that Wayne County, Pa., be included as part of the existing New York-Newark, N.Y.-N.J.-Conn.-Pa. locality pay area, despite the fact that it failed to meet the minimum number of General Schedule employees required for consideration due to federal agencies’ inability to attract job applicants.

Members of the salary council are in the midst of studying whether to reduce, or rescind, the minimum employment criterion altogether. Proponents have argued that the criterion exists because the previous system for studying potential locality pay areas was logistically onerous and is now outdated.

The President’s pay agent, which is made up of Labor Secretary Eugene Scalia, Office of Management and Budget Director Russell Vought and Acting Office of Personnel Management Director Michael Rigas, last week overruled the salary council’s recommendations and said the employment criterion still serves a valuable purpose.

“While the council under the previous administration recommended for several years that the criterion be eliminated, the GS employment criterion is useful in that it identifies whether there is a major federal employer in a location under consideration to become [part of a locality pay area],” the pay agent wrote. “[While] we understand the point that an area’s GS employment could be below the GS employment threshold due to vacancies and that such may be the case with respect to Wayne County, Pa., we do not know how many similarly situated locations there may be, or if agencies actually intend to fill vacant positions.”

The administration does appear set to include already authorized new locality pay areas for 2021, although the change will be effectively in name only. Last month, finalized rules from OPM went into effect establishing Des Moines, Iowa, as a new locality pay area, and adding Imperial County, Calif., to the Los Angeles locality pay area. Although the president’s pay agent did not include those changes in its list of locality pay areas for next year, that appears to be a formality.

“In our December 2019 report, we tentatively approved establishment of a new Des Moines, Iowa, locality pay area and addition of Imperial County, Calif., to the Los Angeles locality pay area as an area of application,” the pay agent wrote. “However, until appropriate rulemaking procedures are finalized to make those changes, locality pay areas for 2021 will continue to be defined as follows.”

When President Trump issues an executive order within the next eight days finalizing his 1% across-the-board pay increase for federal workers he is expected to include Des Moines and Imperial County in the new list of locality pay areas. But in practice, nothing will change for workers in those regions, as Trump’s pay plan includes no increase in locality pay.