Locality Pay Area Tweaks Set for 2023 Pay Raise, and More

The Office of Personnel Management in recent weeks has finalized its work to ensure that previously approved changes to the map of locality pay areas are implemented in time for federal employees’ 2023 pay raise.

Barring the inclusion of language in Congress’ omnibus spending package next week overriding President Biden’s alternative pay plan, federal employees are due to receive an average 4.6% pay increase in January, split between a 4.1% across-the-board raise in basic pay and an average 0.5% boost to locality pay.

Last December, the president’s pay agent approved a proposal to add Carroll County, Ill., to the existing Davenport-Moline, Iowa-Ill., locality pay area. And earlier this year, the pay agent reported to OPM that more recent data indicated that Brooks County, Texas, also meets the criteria to join the existing locality pay area of Corpus Christi-Kingsville-Alice, Texas.

Following up on a proposed rule published in September, OPM earlier this month finalized the regulations. The agency followed up Tuesday and clarified that the new locality pay area applications will kick in on Jan. 4, and will apply to federal workers’ paychecks beginning on the first day of the first pay period beginning on or after Jan. 15.

The president’s pay agent, which is made up of the OPM Director Kiran Ahuja, Office of Management and Budget Director Shalanda Young and Labor Secretary Marty Walsh, is set to issue a new report acting on recommendations from the Federal Salary Council before the end of this year. And President Biden must sign an executive order before Dec. 31 to finalize the 2023 pay raise.

Biden Signs First Responder Retirement Reform Bill

Biden last week signed into law legislation aimed at reforming the retirement system for federal first responders who are injured during their service and forced to pursue other jobs in the federal government.

The First Responder Fair RETIRE Act (H.R. 521) passed the House unanimously in July, and the Senate followed suit last month. The bill, introduced by Reps. Gerry Connolly, D-Va., Brian Fitzpatrick, R-Pa., and Jim Langevin, D-R.I., allows federal first responders who, due to a workplace injury, are forced to pursue employment elsewhere in the federal government to continue paying into an accelerated retirement system.

Federal first responders are enrolled in a faster version of the federal government’s defined benefit pension system, where they pay more per paycheck toward their benefits in exchange for being able to retire after they have served 20 years and reach age 50. But prior to the First Responder Fair RETIRE Act’s enactment, if they were injured and forced to move into a job that no longer qualifies for the accelerated system, they were forced into the standard Federal Employee Retirement System and effectively lost credit for their larger pension contributions.

The law allows first responders injured on the job to remain in the accelerated retirement system if they move to a position that ordinarily would not qualify for the benefit, and it allows them to receive a refund of their previous accelerated contributions if they leave federal service before qualifying for their annuity.

Federal employee groups lauded Congress’ passage and Biden’s enactment of the legislation.

“For decades, when a federal firefighter, law enforcement officer or any other first responder got injured on the job, they could have had their hard-earned pension unfairly stolen from them,” said National Federation of Federal Employees National President Randy Erwin. “Thanks to this legislation, their pension is now safe.”

“By enacting the First Responder Fair RETIRE Act, Congress and President Biden have corrected a longstanding problem for our nation’s federal firefighters, law enforcement officers, Border Patrol officers and other federal first responders,” said Ken Thomas, president of the National Active and Retired Federal Employees Association. “[With this law], federal first responders injured on the job maintain their public safety retirement system benefits should they continue their service to our nation outside that system. It also allows affected employees to receive a refund of their accelerated contributions should they be separated from service before they are entitled to an annuity.”