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OPM seeks new pay locality areas

The Office of Personnel Management announced locality pay adjustments, issuing proposed regulations to establish a new locality pay area for Des Moines, Iowa, and to include Imperial County, in the Los Angeles-Long Beach, Calif., locality pay area.

For counties, the criteria for a locality pay area are 400 or more general schedule (GS) employees and an employment interchange rate of at least 7.5%. The employment interchange rate, according to OPM’s proposed rule, “is defined as the sum of the percentage of employed residents of the area under consideration who work in the basic locality pay area and the percentage of the employment in the area under consideration that is accounted for by workers who reside in the basic locality pay area. (The employment interchange rate is calculated by including all workers in assessed locations, not just Federal employees.)”

The Federal Salary Council has been keeping an eye on pay rates in metropolitan statistical areas and combined statistical areas with 2,500 or more GS employees and recommended new locality pay areas be established for MSAs and CSAs with pay gaps averaging more than 10 percentage points higher than  the “Rest of U.S,” or those parts of the U.S. not located within another locality pay area. In its review, the council identified the Des Moines-Ames-West Des Moines area fits those criteria and has recommended that it be established as a new locality pay area.

New locality pay rates will be set at a later date and will kick in with the first paycheck in January 2021.

Imperial County, Calif., does meet the bar for the number of GS employees in a locality pay area, but does not meet the requirement for a 7.5% interchange rate requirement with either the Los Angeles (4.67%) or San Diego (3.03%) locality pay areas. However, the sum of those two interchange rates is 7.7%. and so the situation in “Imperial County is comparable to a single-county location that would otherwise qualify as an area of application by virtue of being adjacent to only one basic locality pay area with an employment interchange rate of 7.5 percent or more,” OPM said.

While the new locality pay areas may not affect large numbers of federal employees, they could increase pay for those in affected locations and eventually raise wages overall as employers compete for personnel.

Comments on the proposed rule are due Aug. 10.

Reader comments

Tue, Jul 14, 2020 Cynthia Rose Letts Santa Cruz, California

I am fortunate to live in an area that falls under a locality pay increase. But i have friends who work for the National Park Service and they struggle. It seems that OPM/GSA oversight has neglected to recognize the inflated economies that surround national parks and this flaw is costing our parks in skilled labor. After all, why would a seasoned professional want to work for a bureau that cannot provide an income to match the economy of its area? In fact, I am an administrator and have turned down two offers to work at beautiful parks because of this problem.

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