Another group of federal civilian employees could see a bump to their locality pay in 2024, according to a report by the Office of Personnel Management.

Pending approval via the normal regulatory process, the two Washington state counties of Clallam and Jefferson would be included in the Seattle-Tacoma locality pay area, according to the report.

Locality pay, which is calculated by comparing the rate of pay for similar work done by federal and nonfederal workers in an area, is usually updated each year for 1.5 million federal employees on the General Schedule. The goal is to help address pay disparities across the workforce and mitigate areas with higher costs-of-living.

The change affecting the Seattle-Tacoma locality pay area, however, “will not be made until appropriate rulemaking to make the change is complete,” OPM said in the report. “The timing of such rulemaking has not yet been determined.”

In a meeting of the Federal Salary Council last October, Taska Elin, president of the Puget Sound Federal Firefighters, said closing the pay disparity in Jefferson County would help address hiring and attrition issues exacerbated by a high turnover rate of first responders working at Naval Magazine Indian Island, which supports logistics for the Pacific Fleet.

Already, more than 32,000 employees are in line for a locality pay increase in Fresno, California; Reno, Nevada; Rochester, New York; and Spokane, Washington. These areas were recommended in last year’s report, though they have yet to be implemented.

That could happen as early as January, Federal Times previously reported.

Pay gaps persist

Each year, the federal government reports on the status of pay gaps across the country for its workforce and evaluates recommendations for improving or adjusting locality pay based on input by the Federal Salary Council and the President’s Pay Agent, which comprises the secretary of Labor, along with the directors of OPM and the Office of Management and Budget.

Locality pay was created by Congress in 1990 to limit gaps between federal and non-federal pay in specific parts of the country to no more than 5%. To do that in fiscal 2024, that could cost agencies roughly $22 billion, according to OPM.

There are more than 50 locality pay areas, illustrating that 85% of the federal workforce works outside of the Capital region.

The provisions underlying locality pay have remained largely unchanged since they were established in the 1990s, per the Congressional Research Service.

In recent years, however, there have been calls from government watchdogs and policy groups to overhaul the federal pay system to make it more reflective of all the different jobs civil servants do. For one, there are new jobs being done today in artificial intelligence and cyber that did not exist when the Federal Employees Pay Comparability Act was passed three decades ago.

“As currently applied, locality payments in a local labor market may leave some mission-critical occupations significantly underpaid while overpaying others,” the President’s Pay Agent says in the OPM report. “We believe there is a need to consider major legislative reforms of the GS pay system, which continues to establish a single percentage locality rate in each locality pay area without regard to the differing labor markets and average salary levels for major occupational groups.”

The Pay Agent has also said that relying on one average pay rate per area “has lacked credibility since the beginning of locality pay in 1994 to such a degree that the statutory formula for closing pay gaps has been overridden either by Congress or by successive presidents every year since that first year.”

A white paper produced by OPM in 2002 said much the same thing: using a system of averages even for a small geographic area may flatten important differences.

“In this instance, the average the law requires us to use in describing a ‘pay gap’ is no Golden Mean, but more of a Great Muddle that describes nothing very meaningfully and masks the relevant differences across occupations and levels of work in each locality pay area, to the strategic detriment of the entire approach,” according to the paper.

In January 2022, federal employees received base pay and locality pay adjustments.

This year, President Joe Biden proposed an average 5.2% pay raise for federal employees in fiscal 2024. Congress did not propose an alternate figure during budget negotiations that culminated in a short-term continuing resolution on Oct. 1.

Unless lawmakers suggest something else in the full-year spending bill, 2024 pay tables, including locality rates, will be provided by OPM likely in December.

Molly Weisner is a staff reporter for Federal Times where she covers labor, policy and contracting pertaining to the government workforce. She made previous stops at USA Today and McClatchy as a digital producer, and worked at The New York Times as a copy editor. Molly majored in journalism at the University of North Carolina at Chapel Hill.

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