A Closer Look at the Locality Pay Increase That Could Be Coming for Thousands of Feds

The Federal Salary Council last week issued a series of recommendations that would improve the locality pay of nearly 30,000 federal employees, if implemented.

The council, an advisory body made up of presidential appointees and representatives from federal employee unions, agreed on their annual list of new locality pay areas, which this year include Fresno, Calif., and Spokane, Wash., in addition to a series of locations they recommended be added to existing locality pay areas: Emporia, Va., and Greensville County, Va., would belong to Richmond; Dukes and Nantucket counties, Mass., would be part of Boston, Huron County, Mich., would join the Detroit locality pay area, and Pacific and San Juan counties, Wash., would be included in the Seattle region.

All of the council’s recommendations must be finalized by the President’s Pay Agent, after which they would go to the Office of Personnel Management, which must issue regulations to implement the proposals.

The council also recommended long-discussed changes to the criteria by which the government decides when to create a locality pay area, as well as when to add locations to an existing locality pay area. For years, federal officials have requested exemptions from the current criteria because of difficulties attracting or retaining federal workers. The new criteria would tweak the commuting rate that locations must have with neighboring jurisdictions, and more importantly, they remove the requirement that a region have at least 2,500 General Schedule employees.

Updating the locality pay area criteria alone would increase the pay of around 15,400 federal workers who are currently part of the Rest of U.S. locality pay area. According to documents prepared for last week’s council meeting, 24 multi-county areas would become eligible for inclusion in existing locality pay areas.

Included in the list are: Columbus-Auburn-Opelika, Ga. And Ala., which would join the Atlanta locality pay area; Tuscaloosa, Ala., would join Birmingham, Ala.; the Lebanon, N.H.-Vt., metropolitan area would join Boston; Hickory-Lenoir-Morganton, N.C., would join Charlotte, N.C.; Rockford-Freeport-Rochelle, Ill., would join Chicago; Mansfield-Ashland-Bucyrus, Ohio, and Youngstown-Warren, Ohio and Penn., would join Cleveland; Ardmore, Okla., would join Dallas; Dixon-Sterling, Ill., would join Davenport, Iowa; Lansing-East Lansing, Mich., would join Detroit; Florence-Muscle Shoals, Ala., would join Huntsville, Ala.; and Bloomington-Bedford, Lafayette-West Lafayette-Frankfort, and Richmond-Connersville would all join Indianapolis’ locality pay area.

Additionally, Mankato-New Ulm, and Rochester-Austin, Minn., would join Minneapolis’ locality pay area; Salisbury-Cambridge, Md. And Del., would join Philadelphia, except for portions of the region already a part of the Washington-Baltimore locality pay area; Johnstown-Somerset, Penn., and Wheeling, W.V.-Ohio would join Pittsburgh; Fayetteville, N.C.—with the exception of Moore County—and Rocky Mount-Wilson-Roanoke Rapids, N.C., would join Raleigh, N.C.; Kerrville-Fredericksburg, Texas would join San Antonio; and Cumberland, Md.-W.V., would join the Washington, D.C., locality pay area.

A full list of additions to locality pay areas based on the proposed criteria changes can be found here.

The President’s Pay Agent is expected to issue its own report before the end of the year, rendering a final decision on the council’s recommendations. Simpler recommendations, like new locality pay areas and specifically recommended new areas of application for existing locality pay areas, would be implemented by OPM in time for the 2024 pay raise.

But the change in criteria may not see fruit until 2025. If OPM can issue regulations to change the criteria before the salary council meets next year, the salary council would then make recommendations to add the aforementioned regions to the locality pay area map, after which point the pay agent would have to act to implement them.