There will be no changes to locality pay for federal civilian employees in 2012, according to a report submitted by the President’s Pay Agent.
Each year, the President’s Pay Agent, i.e., the Secretary of Labor and the directors of the Office of Management and Budget (OMB) and the Office of Personnel Management (OPM) is required by law (Sec. 53044 of Title 5, U.S.C.) to report on the recommended locality-based comparability payments. However, these recommendations can be overridden, as they often are, by an alternative plan by the president or by legislation. This year, the Agent did submit the required report on what the comparability payments would be. But, because Congress passed a two-year pay freeze for 2011 and 2012 as requested by the president, there will be no locality pay increase for federal civilian employees in 2012.
The Pay Agent also recommended that no change be made to the current list of designated locality pay areas. Recommendations regarding locality pay locations are prepared by the Federal Salary Council based on Bureau of Labor Statistics (BLS) data. The Council recommended that six areas should be considered for designation as separate locality pay areas: Albany, NY, Albuquerque, NM, Bakersfield, CA, Harrisburg, PA, Portland, ME, and Charlotte, NC. The Pay Agent cited the anticipated use of a new survey methodology system, the current economic conditions, and the legislated two-year pay freeze as reasons for not changing the locality pay areas.
In a letter transmitting the report to the president, the Pay Agent also expressed concerns about the continued use of a single percent adjustment in each locality pay area. This procedure, according to the report, ignores differing labor markets for different occupational groups within an area. The Pay Agent recommended that the model and methodology should be reexamined to ensure an accurate comparison of private and federal pay.