Pay Agent Adds One New County to Locality Pay Area, Encourages ‘Fresh’ Look at Other Issues

Carroll County, Illinois, is set to be the latest region to become part of a locality pay area, pending the issuance of new regulations next year, according to the first report of the President’s Pay Agent of the Biden administration.

In 2020, the Federal Salary Council, an advisory body made up of presidential appointees and representatives of federal employee groups, recommended that no locality pay areas be approved this year, except to waive the rule requiring a county to have at least 2,500 General Schedule employees to be included as part of a locality pay area. 

In that instance, advocates noted that the locality is approved for more than 2,500 federal positions, but could not meet that criteria because of poor recruitment and retention, which they argued was because those jobs did not pay well enough without a boost in locality pay.

This week, the President’s Pay Agent, which is made up of Labor Secretary Marty Walsh, Acting Office of Management and Budget Director Shalanda Young and Office of Personnel Management Director Kiran Ahuja, issued its annual report ahead of President Biden’s executive order finalizing an average 2.7% pay raise in 2022. The pay agent declined to issue waivers based on a locality’s number of authorized positions, but approved Carroll County's addition to the Davenport, Iowa, locality pay area due to the fact that it recently has met the 2,500 employee threshold.

“While we understand the point that an area’s GS employment could be below the GS employment threshold due to vacancies, we do not know how many similarly situated locations there may be, or if agencies actually intend to fill vacant positions,” the report states. “It has been the practice in the locality pay program to apply criteria consistently for all locations in the country. The [Federal Salary] Council can revisit the January 2021 council recommendation regarding Carroll County through further analysis of the potential impact of including vacant positions in addition to encumbered positions to meet the established GS employment threshold.”

Jon Zumkehr, president of American Federation of Government Employees Local 4070, which represents U.S. Bureau of Prisons employees in Carroll County, Ill., applauded the decision after years of his union's lobbying on the behalf of workers at U.S. Penitentiary Thompson.

“We are beyond pleased that our hard-working employees will be moved into the higher paying locality," he said. "This change, in addition to the 25% retention pay we already secured, will go a long way toward helping us retain our experienced staff and recruit the additional staff we desperately need."

The pay agent again declined to take action on a number of technical issues surrounding how locality pay areas are calculated due to a lack of consensus on those issues by the salary council during the Trump administration. Those questions include how to apply recent updates to OMB’s map of metropolitan statistical areas and whether to reduce—or eliminate—the requirement that a locality have 2,500 General Schedule employees to be eligible to become part of a locality pay area.

The report encouraged the salary council to revisit these issues, as well as broader questions regarding potential changes to how the federal government measures pay disparities between federal workers and private sector employees, once Biden appoints new members to the body. But the question of whether to include metrics measuring non-salary compensation, like retirement and health benefits, a focus of the council during the Trump administration, went unmentioned.

“As has been noted in earlier pay agent reports and discussed in other venues, we believe there is a need to consider major legislative reforms of the white-collar federal pay system, which continues to utilize a process requiring a single percentage adjustment in the pay of all white-collar civilian federal employees in each locality pay area without regard to the differing labor markets for major occupational groups,” the pay agent wrote. “The current pay comparison methodology used in the locality pay program ignores the fact that non-federal pay in a local labor market may be very different between different occupational groups. As currently applied, locality payments in a local labor market may leave some mission-critical occupations significantly underpaid while overpaying others.”