OPM moves to standardize General Schedule, blue collar locality pay areas

Following years of encouragement from federal employee unions and some lawmakers, the Office of Personnel Management is set to propose new rules that would standardize the maps relied upon to determine locality pay rates for white- and blue-collar federal employees across the U.S.

Currently, the federal government’s locality pay program is bifurcated based on whether employees are paid according to the General Schedule or the Federal Wage System. While the General Schedule locality pay map is updated on a nearly annual basis, FWS locality pay boundaries are still largely based on a map of domestic military installations drawn after World War II, with changes only coming after a round of military base closures or reorganizations.

As a result, at some federal facilities, blue-collar workers encounter pay inequity either compared with their General Schedule counterparts, and, in some instances, other Federal Wage System employees. The Office of Personnel Management is set to propose new regulations in the Federal Register Tuesday that would finally align the maps for the General Schedule’s locality pay areas and appropriated fund Federal Wage System wage areas. Non-appropriated fund FWS employees would not be impacted by the proposal.

“Investing in America means investing in all Americans to make sure everyone has a fair shot and we leave no one behind,” said President Biden in a statement Monday. “For too long, workers hired under the Federal Wage System were paid less money than their counterparts hired under a different pay system to work in the same area. My administration is working to change that.”

In the filing, OPM reported discovering instances both where one FWS wage area corresponded with multiple General Schedule locality pay areas, as well as where a single General Schedule locality pay area corresponded with more than half a dozen FWS wage areas.

“The difference in GS and FWS pay area boundaries is most noticeable on the East Coast from Maine to Virginia and on the West Coast in California,” OPM wrote. “In some cases, there are as many as six different FWS wage areas coinciding with a single non-[Rest of U.S.] locality pay area for GS employees . . . Not only are there differences in pay between FWS and GS employees working at the same location but also among FWS employees within the same wage area.”

In order to update the FWS map in such a way as to prevent needing to revisit the issue wholesale again in the future, the Federal Prevailing Rate Advisory Committee, which serves as the Federal Wage System’s analog of the General Schedule’s Federal Salary Council, recommended incorporating the Federal Salary Council’s approach to measuring factors such as regional commuting data and so that the two maps evolve similarly moving forward.

When aligning the FWS’ wage area maps with the General Schedule’s locality pay area, some federal workers will see their pay increase. But OPM said that those who are moving into a lower-paying wage area also will be held harmless, retaining their higher locality pay. All told, 15,000 federal workers in blue-collar positions will see their pay increase upon the regulations’ implementation.

“FRPAC identified that around 15,000 FWS employees would be placed on higher wage schedules and around 2,000 employees would be placed on lower wage schedules as a result of these changes in policy,” the proposal states. “Employee who would be placed on a lower wage schedule would, in most cases, be able to retain their current rate of pay under current pay retention rules. Employees under temporary or term appointments and employees appointed after the changes go into effect are not eligible for pay retention.”

Federal employee unions, who have long warned that the inequity at some federal facilities due to the bifurcation of the FWS and GS locality pay systems hurts federal agencies’ ability to compete for blue-collar talent, were quick to laud the administration for taking action.

“It is fundamentally unfair that federal employees working side-by-side, for the same employer, and in the same place, are paid differently when it comes to locality pay,” said Randy Erwin, national president of the National Federation of Federal Employees. “This issue affects many NFFE members, and it creates problems with the recruitment and retention of FWS employees. It is time to end these pay inequities once and for all.”

“AFGE has been working for years to fix the inequities in how local pay boundaries are determined for the General Schedule versus the wage grade systems,” said American Federation of Government Employees National President Everett Kelley. “In far too many locations, employees working side-by-side in the exact same building are, for the purposes of pay, treated as though they are in different places. This regulation, once finalized, will correct these inconsistencies and ensure all employees are treated equally regardless of which pay system they fall under.”

OPM is soliciting comments on its proposal between now and Dec. 7.