A Senate bill targeting teleworkers’ locality pay now has its companion in the House

A House Republican has joined a nascent effort to issue upwards of 30% pay cuts to federal employees who engage in regular telework by depriving them of their locality pay.

Rep. Dan Newhouse, R-Wash., last week introduced the Federal Employee Return to Work Act (H.R. 10014), a measure that would bar federal employees who spend at least one day per week—or 20% of their work hours—on telework from receiving the locality pay determined by the location of their official work station, instead considering them part of the “Rest of U.S.” locality pay area, regardless of where they live or work. It serves as the House companion to legislation introduced by Sen. Bill Cassidy, R-La., in August.

For federal workers in cities like New York, San Francisco or Washington, D.C., locality pay can amount to as much as 30% of their salary.

“The federal government pays for massive offices for agency employees in Washington, D.C., and we now know that 17 of the 24 federal agencies are using less than a quarter of their space because of work from home employees,” Newhouse said in a statement. “If agencies wish to allow their employees to work from home, that is their right to do so. But if they do, then the government should not be paying locality bonuses to those employees and they should be treated like any other work from home federal employee that doesn’t receive such a bonus.”

Newhouse’s statement refers to a 2023 Government Accountability Office report measuring federal building utilization in the Washington, D.C., area. But in the intervening year, many federal agencies have updated their telework policies to require workers at their headquarters to spend more time on “meaningful in-person work,” typically requiring feds to spend about half their work time at official work sites.

Despite popular misconceptions, locality pay is not designed to supplement federal workers’ income if they live in high-cost areas; rather, the goal is to reduce pay disparities within a region between federal and private sector workers to within 5%, so that agencies can better compete for talent.

Additionally, remote workers—that is, federal employees who are not generally expected to commute to work—already are granted locality pay for where they live rather than the location of an official work site. And federal HR leaders have repeatedly testified before Congress that they conduct oversight to ensure feds do not take advantage of telework agreements to receive more locality pay than they are entitled.

And while the bill makes exceptions for federal employees with disabilities, members of federal law enforcement and the Foreign Service and active duty military, it would also apply to the 85% of the federal workforce whose homes and official worksites are outside of the Washington, D.C. area.

“Federal employees get paid extra to work in higher-cost cities,” Cassidy said in a statement applauding the introduction of Newhouse’s bill. “Why should they get paid? If you don’t show up for work, you don’t get paid at the same rate just for teleworking.”

Notably, Newhouse has thus far not introduced a companion bill for Cassidy’s other telework proposal, which would remove locality pay the annuity calculations under the Federal Employees Retirement System for all new federal employees, regardless of location or usage of workplace flexibilities.