OPM takes next long-awaited steps to establish 4 new locality pay areas

It’s been a long wait for some 62,000 federal employees, but the Office of Personnel Management is taking the next steps to establish four new locality pay areas.

OPM on Monday will propose regulations to establish Birmingham/Hoover/Talladega, Alabama; Burlington/South Burlington, Vermont; San Antonio/New Braunfels/Pearsall, Texas; and Virginia Beach/Norfolk, Virginia, as new locality pay areas.

Once OPM completes the regulatory process, the president must set locality pay rates for the four new areas, which typically occurs at the very end of each calendar year.

Federal employees in these four new areas would likely see the locality pay changes on or after Jan. 1, 2019, in their first paychecks of the new year.

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The addition of the four would bring the total number of locality pay areas to 51, including the “rest of [the] U.S.”

Federal employees in Burlington and Virginia Beach have been waiting for a few years for locality pay to become official. The Federal Salary Council first voted back in November 2015 to establish those areas in Vermont and Virginia as separate locality pay areas. The president’s pay agent, a body made up of the Labor secretary, the Office of Management and Budget director and OPM director, finalized those additions in November 2016.

The salary council approved Birmingham and San Antonio as new areas also in 2016. But the regulatory process has languished since.

OPM’s regulations also propose a few other small changes to existing locality pay areas.

Based on years-old recommendations, the president’s pay agent agreed to use updated commuting pattern data as part of the methodology it used to calculate federal pay.

With this decision, OPM will add McKinley County, New Mexico, to the existing locality pay area in Albuquerque, New Mexico, and San Luis Obispo County, California, to the Los Angeles/Long Beach area.

The moves would impact roughly 1,600 and 100 employees, respectively.

The Federal Salary Council in April had approved two additional locality pay areas in Corpus Christi, Texas and Omaha, Nebraska. The council had suggested the president’s pay agent may approve the two areas and combine all six into one rulemaking process.

But OPM’s regulations make no mention of Corpus Christi or Omaha, meaning federal employees in those locations will likely have to wait for the president’s pay agent to approve and OPM to take separate action.

OPM’s regulations will be open for public comment for 30 days, starting July 9.

As the president has indicated in his 2019 budget, civilian employees may not receive a pay raise next year, but these locality changes would be in place going forward.

The Senate Appropriations Committee, however, did include a pay raise of 1.9 percent for civilian employees in one of next year’s spending bills.

The proposal, however, still has a long way to go through the standard congressional process before federal employees have a chance of seeing a 1.9 percent raise next year. The House hasn’t voted yet on the financial services and general government appropriations bill yet, but its version makes no mention of civilian pay.

The addition of the four new locality pay areas is significant, as the Federal Salary Council considers a new direction under the Trump administration.

During the council’s first meeting of the new administration back in April, leadership said that resolving recruitment, retention and pay challenges on a case-by-case basis was “problematic,” suggesting the administration may favor a broad, comprehensive look at federal compensation.

The council’s members agreed to review the current methodology they use to make recommendations and key decisions about the locality pay program.