Federal White-Collar Pay: FY2008 Salary Adjustments

Federal White-Collar Pay:
FY2008 Salary Adjustments
Updated January 25, 2008
Barbara L. Schwemle
Analyst in American National Government
Government and Finance Division

Federal White-Collar Pay: FY2008 Salary Adjustments
Summary
Federal white-collar employees are intended by law to receive an annual pay
adjustment and a locality-based comparability payment, effective in January of each
year, under Section 529 of P.L. 101-509, the Federal Employees Pay Comparability
Act (FEPCA) of 1990. The law has never been implemented as originally enacted;
annual and locality payments pursuant to the statute have been reduced each year.
Federal white-collar employees received a 2.5% annual pay adjustment and a 1.0%
locality-based comparability payment in January 2008. President George W. Bush
authorized the average 3.5% pay adjustment in Executive Order 13454, issued on
January 4, 2008. Although the annual adjustment and the locality payment are
sometimes referred to as cost-of-living adjustments, neither is based on changes in
the cost of living.
The annual pay adjustment is based on the Employment Cost Index (ECI),
which measures changes in private-sector wages and salaries. The size of the locality
payment is determined by the President and is based on a comparison of non-federal
and General Schedule salaries in 32 pay areas nationwide. By law, the disparity
between non-federal and federal salaries was to be gradually reduced to 5% during
the years 1994 to 2002. Continuing in each year thereafter, FEPCA requires that
amounts payable may not be less than the full amounts necessary to reduce the pay
disparity to 5%. For the January 2008 pay adjustment, the ECI showed that the
annual across-the-board increase would be 2.5%. The Federal Salary Council and the
Pay Agent recommend that, to carry out FEPCA, the 2008 locality payments range
from 18.77% in the “Rest of the United States” (RUS) pay area to 55.34% in the San
Jose-San Francisco pay area, and be 44.69% in the Washington, DC, pay area.
Because the new locality rates replace the existing locality rates, the rate change is
derived by comparing 2007 locality payments with those recommended for 2008.
This comparison results in recommended net increases for 2008, if the ECI and
locality-based comparability payments were granted as required by law, of 7.23% in
the RUS pay area, 21.21% in the San Jose-San Francisco pay area, and 24.08% in the
Washington, DC, pay area. The nationwide average net pay increase, if the ECI and
locality-based comparability payments were granted as required by law, would have
been 14.08% in 2008. The President’s FY2008 budget proposed a 3.0% federal
civilian pay adjustment. H.R. 2829, the Financial Services and General Government
(FSGG) Appropriations Act for FY2008, as passed by the House of Representatives
and reported in the Senate, provides a 3.5% pay adjustment for federal civilian
employees. The FSGG appropriations were included as Division D of P.L. 110-161,
Consolidated Appropriations Act for FY2008, that President Bush signed on
December 26, 2007. Section 740(a) of the law authorizes the 3.5% pay adjustment.
Legislation related to performance appraisal and pay is currently pending in the
Senate. S. 1045 would require a federal employee to receive a summary performance
rating of at least fully successful to receive a pay adjustment. S. 1046 would raise the
limitation on basic pay for employees under the Senior-Level (SL) and scientific and
professional (ST) pay schedules. This report will be updated as events dictate.

Contents
In troduction ......................................................1
Pay Adjustments..................................................1
Annual Pay Adjustment.........................................1
Locality-Based Comparability Payments............................2
Methodology for Determining the Locality-Based
Comparability Payments................................4
January 2008 Pay Adjustment........................................8
Annual Pay Adjustment.........................................8
Locality-Based Comparability Payments............................8
The President’s Recommendation................................10
Congressional Recommendations................................11
Proposed Legislation Related to Pay..................................14
OPM Proposed Rule on Critical Pay..........................14
List of Tables
Table 1. Annual and Locality Pay Adjustments Under FEPCA,
1991 to 2008................................................16
Table 2. January 2008 Recommended Locality Payments, Authorized
Locality Payments, and Net Annual and Locality Pay Increase..........17

Federal White-Collar Pay:
FY2008 Salary Adjustments
Introduction
Federal white-collar employees¹ paid under the General Schedule (GS), Foreign
Service Schedule, and certain Veterans Health Administration Schedules are intended
by law to receive an annual pay adjustment and a locality-based comparability
payment, effective in January of each year, under Section 529 of P.L. 101-509, the²
Federal Employees Pay Comparability Act (FEPCA) of 1990. Although the annual
adjustment and the locality payment are sometimes referred to as cost-of-living
adjustments, neither is based on measures of the cost of living.
FEPCA has never been implemented as originally enacted. The annual pay
adjustment was not made in 1994; in 1995, 1996, and 1998, reduced amounts of the
annual adjustments were provided. For 1995 through 2008, reduced amounts of the
locality payments were provided. Table 1 (at the end of this report) shows the annual
and locality pay adjustments made under FEPCA for the years 1991 through 2008.³
Pay Adjustments
Annual Pay Adjustment
Federal white-collar employees usually receive an annual pay adjustment. The
President may annually adjust salaries of administrative law judges. Individuals in

¹ This report does not cover salary adjustments for federal executive and judicial branch
officials, federal justices and judges, Members of Congress, or the United States Postal
Service. See CRS Report RL33245, Legislative, Executive, and Judicial Officials: Process
for Adjusting Pay and Current Salaries; CRS Report RS20388, Salary Linkage: Members
of Congress and Certain Federal Executive and Judicial Officials, both by Barbara L.
Schwemle; and CRS Report RL33128, Senior Executive Service Pay for Performance
System, by L. Elaine Halchin. See also, CRS Report 97-615, Salaries of Members of
Congress: Congressional Votes, 1990-2008; CRS Report 97-1011, Salaries of Members of
Congress: A List of Payable Rates and Effective Dates, 1789-2008; and CRS Report
RL30064, Congressional Salaries and Allowances, all by Ida A. Brudnick; and CRS Report
RL30014, Salaries of Members of Congress: Current Procedures and Recent Adjustments
by Paul E. Dwyer.
² 104 Stat. 1389, at 1427.
³ For the 2007 salary adjustments, see CRS Report RL33158, Federal White-Collar Pay:
FY2006 and FY2007 Salary Adjustments, by Barbara L. Schwemle.

senior-level (SL) and scientific and professional (ST) positions may receive the
annual adjustment at the discretion of agency heads.⁴ Annual adjustments for
contract appeals board members depend on whether Executive Schedule⁵ pay is
adjusted.
FEPCA requires the annual pay adjustment for GS employees to be based on the
Employment Cost Index (ECI), which measures change in private-sector wages and
salaries. Basic pay rates are to be increased by an amount that is 0.5 percentage
points less than the percentage by which the ECI, for the quarter ending September
30 of the year before the preceding calendar year, exceeds the ECI for that same
quarter of the second year (if at all). The pay adjustment is effective as of the first
applicable pay period beginning on or after January 1 of each calendar year. For
example, the annual adjustment for January 2007 is based on the ECI for the quarter
ending September 30, 2005. The change in the ECI from the previous September 30
(2.2%) is reduced by 0.5 percentage points, thereby yielding a 1.7% annual
adjustment. Therefore, the data used to calculate the annual adjustment are 15
months old at the time of the adjustment.
In the event of a national emergency or serious economic conditions affecting
the general welfare, FEPCA authorizes the President to issue an alternative pay plan
that uses a different percentage increase from the one required by the ECI-based
formula. The alternative plan must be submitted to Congress by September 1
preceding the scheduled effective date.⁶ The President did not issue an alternative
plan for the January 2008 annual pay adjustment.
Locality-Based Comparability Payments
GS employees are also intended to receive locality-based comparability
payments; the Pay Agent⁷ may also extend these payments to employees in other pay
systems and has done so for employees in the Foreign Service and in senior-level,
scientific and professional, administrative law judge, administrative appeals judge,
and contract appeals board member positions.⁸ The Pay Agent determines the
applicable pay cap level for certain non-General Schedule employees to whom

⁴ According to 5 U.S.C. §5376, the minimum rate of basic pay for SLs and STs is equal to
120% of the minimum rate of basic pay for GS-15; the maximum rate of basic pay for SLs
and STs is equal to level IV of the Executive Schedule.
⁵ The Executive Schedule is the pay schedule for cabinet officers and other top government
officials. It has five levels of pay in 2008 as follow: EX I-$191,300, EX II-$172,200, EX
III-$158,500, EX IV-$149,000, and EX V-$139,600.
⁶ 104 Stat. 1389, at 1429-1431; 5 U.S.C. §§5301-5303.
⁷ The Pay Agent comprises the Secretary of Labor (Elaine L. Chao), the Director of the
Office of Management and Budget (Jim Nussle), and the Director of the Office of Personnel
Management (Linda M. Springer).
⁸ The President, by Executive Order, delegated to the Pay Agent the authority to extend
locality-based comparability payments to certain categories of positions not otherwise
covered. U.S. President (Clinton), “Delegating a Federal Pay Administration Authority,”
Executive Order 12883, Federal Register, vol. 58, December 1, 1993, p. 63281.

locality pay is extended.⁹ The Office of Personnel Management (OPM) published
final regulations in December 2001 to clarify and redefine the limitations.¹⁰ Blue-
collar workers under the Federal Wage System (FWS) receive a prevailing rate
adjustment that is generally capped at the average percentage pay adjustment
received by federal white-collar employees.¹¹ For 2006, notwithstanding the cap, the
blue-collar pay adjustment in a particular location is no less than the increase
received by GS employees in that location. Blue-collar workers in Alaska, Hawaii,
and other non-foreign areas receive a pay adjustment that is no less than the increase
received by GS employees in the Rest of the United States (RUS) pay area.¹² GS
special-rate employees receive either the special rate supplement or the locality
payment, whichever is higher. Law enforcement officers receiving special rates
under Section 403 of FEPCA receive both special rates and locality pay. White-
collar federal employees in Alaska and Hawaii and outside the continental United
States receive a non-foreign cost-of-living (COLA) allowance rather than locality
pay.
A locality rate of pay is considered as basic pay in computing danger pay
allowances and post differentials (and for purposes of calculating retirement
annuities) for certain employees who are temporarily assigned to foreign areas and

⁹ The President, by Executive Order, delegated to the Pay Agent the authority to determine
the applicable pay cap level for certain non-General Schedule employees to whom locality
pay is extended. U.S. President (Clinton), “Adjustments of Certain Rates of Pay and
Delegation of a Federal Pay Administration Authority,” Executive Order 13106, Federal
Register, vol. 63, December 9, 1998, p. 68152.
¹⁰ The regulations stated the following: “To provide consistent treatment between General
Schedule (GS) and non-GS employees receiving locality payments, OPM proposes to
provide that (1) non-GS positions whose maximum scheduled annual rate of pay is less than
or equal to the maximum payable scheduled annual rate of pay for GS-15 will be subject to
a locality pay cap equal to the rate for level IV of the Executive Schedule, and (2) non-GS
positions whose maximum scheduled annual rate of pay exceeds the maximum payable
scheduled annual rate of pay for GS-15, but is not more than the rate for level IV of the
Executive Schedule, will be subject to a locality pay cap equal to the rate for level III of the
Executive Schedule.” U.S. Office of Personnel Management, “Locality-Based
Comparability Payments,” Federal Register, vol. 65, March 24, 2000, pp. 15875-15877.
U.S. Office of Personnel Management, “Locality-Based Comparability Payments,” Federal
Register, vol. 66, December 28, 2001, pp. 67069-67070.
¹¹ H.R. 2829, the Financial Services and General Government Appropriations Act for
FY2008, as passed by the House of Representatives and reported in the Senate, includes this
provision at Section 712. P.L. 110-161, Consolidated Appropriations Act for FY2008,
includes the provision at Section 712.
¹² H.R. 2829, the Financial Services and General Government Appropriations Act for
FY2008, as passed by the House of Representatives, includes this provision at Section

739(b), and as reported in the Senate, includes this provision at Section 740(b). P.L. 110-

161, Consolidated Appropriations Act for FY2008, includes the provision at Section 740(b).

for whom the Department of State has established allowances for danger.¹³ (See 5
C.F.R. 531.610 for other purposes for which locality rates are treated as basic pay.)
The locality-based comparability payments procedure established by FEPCA
provides that payments are to be made within each locality determined to have a non-
federal/federal pay disparity greater than 5%. When uniformly applied to GS
employees within a locality, the adjustment is intended to make their pay rates
substantially equal, in the aggregate, to those of non-federal workers for the same
levels of work in the same locality.
FEPCA authorizes the President to fix an alternative level of locality-based
comparability payments if, because of a national emergency or serious economic
conditions affecting the general welfare, the President considers the level that would
otherwise be payable inappropriate. At least one month before these comparability
payments would be payable (by November 30, 2007, for the 2008 payment), the
President would have to prepare and transmit to Congress a report describing the
intended alternative level of payments, including the reasons why the alternative level
would be necessary.¹⁴ The President issued an alternative plan for the January 2008
locality pay adjustment on November 27, 2007, that would have provided a 0.5%
locality increase.¹⁵ Congress, however, changed the size of the federal pay
adjustment when it passed the Consolidated Appropriations Act for FY2008 (H.R.

2764) that became P.L. 110-161 when the President signed it on December 26, 2007.

Once the annual and locality pay percentage amounts are determined, the actual
pay rates are calculated in the following way. First, the basic General Schedule (GS)
is increased by the annual adjustment percentage, resulting in a new GS schedule.
These new basic GS rates are then increased by the locality payments. For 2008, the
resulting pay rates (annual + locality) are compared with the 2007 pay rates (annual
+ locality) to derive the net increases in pay. According to OPM, the net increase is
calculated using this formula: 1 plus the new local rate divided by one plus the old
local rate times the percentage for the across-the-board increase minus 1 times 100.
Methodology for Determining the Locality-Based Comparability
Payments. Under the law, the Bureau of Labor Statistics (BLS) conducts surveys
that document non-federal rates of pay in each locality pay area. (In January 2008,
there will be 32 pay areas nationwide.) Prior to October 1996, the surveys were
conducted under the Occupational Compensation Survey Program (OCSP), which

¹³ U.S. Office of Personnel Management, “Locality-Based Comparability Payments,”
Federal Register, vol. 69, August 5, 2004, pp. 47353-47354. U.S. Office of Personnel
Management, “Changes in Pay Administration Rules for General Schedule Employees,”
Federal Register, vol. 70, May 31, 2005, pp. 31279-31280, 31305.
¹⁴ 104 Stat. 1389, at 1429-1436, as amended by 106 Stat. 1355-1356 and 1360; 5 U.S.C.
§§5301-5302 and §§5304-5304a.
¹⁵ U.S. President (Bush), “Text of a Letter from the President to the Speaker of the House
of Representatives and the President of the Senate,” November 27, 2007.

had been approved by the Federal Salary Council¹⁶ and the Pay Agent. Since then,
the surveys have been conducted under the National Compensation Survey (NCS)
program, which was not approved for use with the January 2000 through January
2003 locality payments. In its memorandum to the Pay Agent on the January 2001
locality payments, the council recommended five improvements in the NCS
program.¹⁷ For the January 2004 through January 2006 locality payments, a phase-in
of NCS survey data was approved.¹⁸ The Federal Salary Council recommended that
100% of the NCS data be used beginning with the January 2007 locality payments
and that the OCSP data no longer be used.
Each of the recommendations has been implemented, and the full effect of the
changes will be seen gradually. According to the council’s memorandum on the
January 2008 locality payments, “The average pay gap was about 7 points higher in
2006 than in 2005 [which] means the new survey methods tend to match survey jobs
to lower GS grades” and “The largest increase was in the Washington-Baltimore
locality pay area, where the pay gap is 13.99 points higher in 2006 than in 2005.”¹⁹
The council also notes that the BLS will begin to include pay data from
establishments with fewer than 50 employees in its surveys which could be included
in the reports delivered to the Pay Agent in 2007 for the January 2009 locality pay
recommendations. The council reports that “BLS estimates that the number of non-
Federal workers in white-collar jobs matched to GS jobs represented by survey data
would increase by about 37 percent if these smaller establishments were included”

¹⁶ The council includes nine members. Members generally recognized for their impartiality,
knowledge, and experience in labor relations and pay policy are Terri Lacy, chair; George
Nesterczuk, vice-chair; and Rudy J. Maestas. The other members represent the American
Federation of Government Employees (Frank Ferris); the National Treasury Employees
Union (Colleen M. Kelley); the National Federation of Federal Employees (Richard N.
Brown); the Association of Civilian Technicians (Thomas G. Bastas); and the Fraternal
Order of Police (James Pasco).
¹⁷ These recommendations, endorsed by the Pay Agent, were that (1) four factors, rather than
nine, be used to assign the correct federal grade levels to the non-federal jobs surveyed, and
grade level guides for occupational families be provided; (2) a model be developed to
estimate missing data; (3) the matching of federal survey jobs with non-federal survey jobs
be improved, and subcategories be provided for occupations that are not elsewhere
classified; (4) for supervisory occupations, the highest level of work supervised be graded
and the grade level be adjusted based on the level of supervision, instead of grading the
supervisory job itself; and (5) criteria be developed to identify and exclude jobs that would
be classified above GS-15 in government. (Memorandum for the President’s Pay Agent
from the Federal Salary Council, Level of Comparability Payments for January 2001 and
Other Matters Pertaining to the Locality Pay Program [Washington: October 22, 1999],
p. 8.)
¹⁸ For the January 2004 locality payments, equal weights of 50% were applied to the NCS
and OCSP results. For January 2005, weights of 75% and 25% were applied to the NCS and
OCSP results, respectively. Weights of 90% NCS and 10% OCSP were applied for January

2006.

¹⁹ Memorandum for the President’s Pay Agent from the Federal Salary Council, Level of
Comparability Payments for January 2008 and Other Matters Pertaining to the Locality
Pay Program (Washington: October 27, 2006), p. 1. (Hereafter referred to as Federal
Salary Council Memorandum for January 2008.)

and recommends that the Pay Agent request that the BLS provide survey data “both
including and excluding the small establishments.”²⁰
The BLS survey results are submitted to the Office of Personnel Management
(OPM), which serves as the staff to the Federal Salary Council and the Pay Agent.
OPM documents federal rates of pay in each of the pay areas and compares non-
federal and GS salaries, by grade, for each pay area. The average salaries at each
grade, both federal and non-federal, are then aggregated and compared to determine
an overall average percentage pay gap for each area. By law, the disparity between
non-federal and federal salaries is to be reduced to 5%. Therefore, the overall
average percentage pay gap for each pay area is adjusted annually to this level by
OPM. This adjusted gap, called the target gap, is used to determine the locality rates
for each pay area recommended to the President by the Pay Agent, after receiving
advice from the Federal Salary Council. The pay gaps on which the locality
payments are based are 22 months old by the effective date of the adjustment; thus,
March 2006 gaps determine the January 2008 locality payments.
FEPCA also stipulates that a certain percentage of the target gap between GS
average salaries and non-federal average salaries in each pay area is to be closed each
year. Twenty percent of the gap was closed in 1994, the first year of locality pay, as
authorized by FEPCA. An additional 10% of the gap was to be closed each year
thereafter, meaning that 30% of the gap was to be closed in 1995, 40% in 1996, 50%
in 1997, 60% in 1998, 70% in 1999, 80% in 2000, and 90% in 2001. By January
2002, and continuing each year thereafter, FEPCA specified that amounts payable
could not be less than the full amount necessary to reduce the pay disparity of the
target gap to 5%. In each of the years since 1994, the locality pay increase has been
implemented at a much lower percentage than the law requires. As a result, the gap
is being reduced slowly; 23.5% of the gap was closed in 1995, 25.9% in 1996, 28.3%
in 1997, 29.2% in 1998, 31% in 1999, 33.5% in 2000, 38.1% in 2001, 42.3% in

2002, 44% in 2003, 53.7% in 2004, 58.84% in 2005, and 62.75% in 2006.

Evaluating Areas in the Vicinity of Locality Pay Areas. To evaluate
areas currently in the “Rest of the United States” pay area for possible inclusion in
adjacent locality pay areas, the following criteria²¹ apply:
For adjacent Metropolitan Statistical Areas (MSAs) and Combined
Statistical Areas (CSAs): To be included in an adjacent locality pay area, an

²⁰ Federal Salary Council Memorandum for January 2008, pp. 3-4. The memorandum notes
that the specifications for the current NCS surveys exclude establishments with fewer than
50 employees and that some council members “continue to have misgivings about whether
jobs in smaller establishments would match very well to Federal jobs ... [and] asked whether
the Government should restrict comparisons to larger establishments, since the Government
is such a large employer.”
²¹ Report on Locality-Based Comparability Payments for the General Schedule, Annual
Report of the President’s Pay Agent (Washington: December 2003), p. 19.

adjacent MSA or CSA currently in the RUS locality pay area must have at least²²

1,500 GS employees and an employment interchange measure of at least 7.5%.

For adjacent counties that are not part of a multi-county MSA or CSA: To
be included in an adjacent locality pay area, an adjacent county that is currently
in the RUS locality pay area must have at least 400 GS employees and an
employment interchange measure of at least 7.5%.
For federal facilities that cross locality pay area boundaries: To be included
in an adjacent locality pay area, the whole facility must have at least 500 GS
employees, with the majority of those employees in the higher-paying locality
pay area, or that portion of a federal facility outside of a higher-paying locality
pay area must have at least 750 GS employees; the duty stations of the majority
of these employees must be within 10 miles of the separate locality pay area; and
a significant number of these employees must commute to work from the higher-²³
paying locality pay area.
Areas already included in a locality pay area through an application of the
criteria are not subject to further review.
Requests for Changes in Locality Pay Area Boundaries. To be
considered by the council, requests for changes in the boundaries of locality pay areas
must include the following information:
^!Credentials of the requesting group that establish how the group
represents GS employees in the area.
^!Identification of the geographic area covered by the proposal.
^!The number of GS employees in the area, by agency.
^!A detailed explanation of why the area should be added to the
adjacent locality pay area.
^!Current job vacancy rates in the area for GS positions.

²² The council recommended that commuting rates be calculated using the employment
interchange measure, which is defined by the Office of Management and Budget as “A
measure of the ties between two adjacent entities.” It is “the sum of the percentage of
employed residents of the smaller entity who work in the larger entity and the percentage
of the employment in the smaller entity that is accounted for by workers who reside in the
larger entity.” (Memorandum for the President’s Pay Agent from the Federal Salary Council,
Level of Comparability Payments for January 2005 and Other Matters Pertaining to the
Locality Pay Program, [Washington: October 28, 2003], p. 7. [Hereafter referred to as
Federal Salary Council Memorandum for January 2005.])
²³ Memorandum for the President’s Pay Agent from the Federal Salary Council, Level of
Comparability Payments for January 2007 and Other Matters Pertaining to the Locality
Pay Program, [Washington: October 21, 2005] p. 5, and Report on Locality-Based
Comparability Payments for the General Schedule, Annual Report of the President’s Pay
Agent [Washington: December 2005], p. 13.

^!Documentation of recruitment or retention problems for GS
employees in the area.
^!Documentation that agencies have tried other pay flexibilities,
including requests for special salary rates and use of recruitment,
retention, and relocation payments, and that these flexibilities did
not solve recruitment and retention problems.
^!An indication that the headquarters of affected agencies know about
and support the request.
^!Distance measures, by road, between the requesting area and the
locality pay area.
^!A summary of transportation facilities linking the requesting area
and the locality pay area, including commuter rail or other mass
transit facilities.
^!Agency organizational relationships between activities covered by
the proposal and activities in another locality pay area.²⁴
January 2008 Pay Adjustment
Annual Pay Adjustment
Recent ECI data indicate that the annual across-the-board pay adjustment in
January 2008 should be 2.5%. This figure reflects the September 2005 to September
2006 change in private-sector wages and salaries of 3.0%, minus 0.5%.²⁵ Because
President Bush did not issue an alternative plan for the annual pay adjustment,
FEPCA requires that the annual adjustment be 2.5% in January 2008.
Locality-Based Comparability Payments
The Federal Salary Council reported that as of March 2006, the overall gap
between GS average salaries (excluding existing locality payments, special rates, and
certain other payments) and non-federal average salaries was 37.57%.²⁶ The amount
needed to reduce this disparity to 5%, as mandated by FEPCA, averages 31.02% for
2008. To meet the target for closing the pay gap, the council recommends locality
pay raises ranging from 18.77% in the “Rest of the United States” (RUS) pay area to

55.34% in the San Jose-San Francisco pay area. The payment recommended for the

²⁴ Federal Salary Council Memorandum for January 2005, p. 10.
²⁵ U.S. Department of Labor, Bureau of Labor Statistics, Employment Cost Index —
September 2006 (Washington: October 31, 2006), pp. 2, 17.
²⁶ The calculation of the overall average pay gap excludes the locality payments made in
2006. The average locality rate paid in 2006 is 16.18%; the overall average pay gap in 2006
is 18.41%.

Washington, DC, pay area is 44.69%.²⁷ Because the new locality rates replace the
existing locality rates, the rate change is derived by comparing 2007 locality
payments with those recommended for 2008. This comparison results in
recommended net increases for 2008, if the ECI and locality-based comparability
payments were granted as required by law, of 7.23% in the RUS pay area, 21.21%
in the San Jose-San Francisco pay area, and 24.08% in the Washington, DC, pay
area. The nationwide average net pay increase, if the ECI and locality-based
comparability payments were granted as required by law, would be 14.08% in 2008.
The council recommends that the 32 locality pay areas recommended for 2007
continue in 2008. The Indianapolis pay data were combined with the “Rest of the
United States” pay data for 2008, because the pay gap in that area (24.33%) is below
that in RUS (24.80%) and, therefore, should receive the same adjustment as RUS.²⁸
The council recommended, however, that the Pay Agent retain the Indianapolis
locality pay area and review survey results again next year. Louisville, KY, is not
recommended as a separate locality pay area for 2008, but the council recommends
that the locale, along with Austin, TX, and Memphis, TN, continue to be reviewed
as the BLS salary surveys expand.²⁹
According to the council, a number of employees and agencies affected by
Hurricane Katrina in New Orleans and Baton Rouge, LA, and Biloxi, MS, contacted
OPM about the possibility of increasing the amount of the locality-based
comparability payments in those areas to help alleviate hardships and increased living
costs. The New Orleans Federal Executive Board and federal agencies are currently
coordinating their consideration of whether special salary rates or other pay
flexibilities should be used. The council recommends that federal agencies consult
with OPM on actions necessary to address recruitment and retention problems in
areas affected by Hurricane Katrina.³⁰
Since the inception of locality pay in 1994, pay areas with the largest pay gaps
have received the largest locality pay increases. Acknowledging that “the details of
the pay increase distribution should be left to the President to determine,” the Federal
Salary Council reiterated this principle in its annual memorandum for the President’s
Pay Agent. Specifically, the council recommended “that any funds allocated for
locality pay raises for 2008 be distributed so that locations with the largest pay gaps
receive the largest increases and that employees in each locality pay area receive at

²⁷ Federal Salary Council Memorandum for January 2008, p. 2 and Attachment.
²⁸ Under the methodology that has been used since locality pay was first implemented in
1994, areas with little data available in the BLS surveys and pay gaps that were two-tenths
of a percentage point (0.2%) or more below RUS or below the RUS pay area for three
surveys were to be dropped as discrete surveyed pay areas, and the resources used to
conduct these surveys were to be redirected to new locations. For the recommendation on
the Indianapolis pay area, see Federal Salary Council Memorandum for January 2008, p. 2
and Attachment.
²⁹ Federal Salary Council Memorandum for January 2008, p. 3.
³⁰ Ibid., p. 5.

least some portion of the locality pay funds, after payment of an across-the-board
increase of at least 2.5%.”³¹
After considering the council’s recommendations, the Pay Agent endorsed them
in its December 20, 2006, annual report to the President on the 2008 locality
payments. The Pay Agent stated that, “Given the current national emergency,
however, ... it would be unwise to allow the locality pay increases shown in [its]
report to take effect in January 2008.”³²
The Pay Agent estimated that the cost of the January 2008 locality-based
comparability payments would be about $9.3 billion if the full amount necessary to
reduce the pay disparity of the target gap to 5% were provided in January 2008 as
required by FEPCA.³³ Table 2 shows the council’s and the Pay Agent’s
recommended locality payments for January 2008.
As for the improvements in the BLS National Compensation Survey (NCS)
Program, the Pay Agent noted that “four of the five NCS improvements are
incorporated into surveys used this year.”³⁴ The Pay Agent agreed with the council’s³⁵
recommendations on the new locality pay areas.
The Pay Agent reiterated that it “has serious concerns about the utility of a
process that requires a single percentage adjustment in the pay of all white-collar
civilian Federal employees in each locality pay area without regard to the differing
labor markets for major occupational groups or the performance of individual
employees” and “continue[s] to believe it is imperative to develop performance-
sensitive compensation systems.”³⁶
The President’s Recommendation
The President usually includes a proposal on the federal civilian pay adjustment
in the Budget of the United States issued in February of each year. The FY2008
budget includes a proposed 3.0% pay adjustment for federal civilian employees. (It
also includes a proposed 3.0% pay raise for the uniformed military.) This percentage³⁷
is the overall average increase, including locality pay adjustments. President Bush

³¹ Memorandum for the President’s Pay Agent from the Federal Salary Council, Level of
Comparability Payments for January 2009 and Other Matters Pertaining to the Locality
Pay Program (Washington: October 25, 2007), p. 9.
³² Report on Locality-Based Comparability Payments for the General Schedule, Annual
Report of the President’s Pay Agent (Washington: December 20, 2006).
³³ Ibid., p. 19.
³⁴ Ibid., p. 3.
³⁵ Ibid., p. 12.
³⁶ Ibid., cover letter.
³⁷ U.S. Executive Office of the President, Office of Management and Budget, Budget of the
United States Government Fiscal Year 2008; Analytical Perspectives (Washington: GPO,
(continued...)

did not issue an alternative plan for the annual pay adjustment; therefore, under
FEPCA, the January 2008 annual adjustment must be 2.5%. He issued an alternative
plan for the locality pay adjustment on November 27, 2007, which would have
provided a 0.5% January 2008 locality payment.³⁸ Together, the annual and locality
adjustments would have resulted in an average 3.0% pay increase. Congress,
however, authorized an average 3.5% pay adjustment in P.L. 110-161, the
Consolidated Appropriations Act for FY2008, as discussed below under
“Congressional Recommendations.”
As in last year’s budget, the FY2008 budget stated that the Administration
would work with Congress to enact the Working for America Act which, if enacted,
could affect how federal pay is adjusted.³⁹ OMB released the draft of the legislation
in mid-July 2005, but it was not introduced in the 109^th Congress.⁴⁰ The budget states
that OPM will support demonstration projects linking pay and performance so as “to
replace the current General Schedule pay system with a modern classification, pay,
and performance management system that is both results-driven and market-based.”⁴¹
It also notes that funding has been included “for a legislative proposal to transition
from non-foreign cost of living allowances (COLA) to locality pay for employees
working in non-foreign areas,” but does not provide any details about the proposal.⁴²
The non-foreign area COLA’s currently range from 10.5% to 25% and are not
creditable for purposes of retirement. (Locality payments are creditable for purposes
of retirement.) The COLA’s are currently being paid in Alaska, Hawaii, Guam,
Commonwealth of Northern Mariana Islands, Puerto Rico, and the U.S. Virgin
Islands.
Congressional Recommendations
The pay adjustment is considered annually by Congress, which may legislate an
adjustment that is different from the one recommended by the President or that might
be authorized by the President in an alternative plan. The January 1999, January
2000, and January 2002 through January 2006 overall pay adjustment amounts were
set by Congress.⁴³ On January 22, 2007, nine Members of Congress from the

³⁷ (...continued)

2006), p. 168.

³⁸ U.S. President (Bush), “Text of a Letter from the President to the Speaker of the House
of Representatives and the President of the Senate,” November 27, 2007.
³⁹ U.S. Executive Office of the President, Office of Management and Budget, Budget of the
United States Government Fiscal Year 2008 (Washington: GPO, 2007), p. 26.
⁴⁰ “President’s Management Agenda, Working for America Act,” available at
[ h t t p : / / www.whi t e house.go v/ r e sul t s / a ge nda/ wor ki ng.ht ml ] .
⁴¹ U.S. Executive Office of the President, Office of Management and Budget, Budget of the
United States Government Fiscal Year 2008; Appendix (Washington: GPO, 2007), p. 999.
⁴² Ibid., p. 1007.
⁴³ P.L. 105-277, P.L. 106-58, P.L. 107- 67, P.L. 108-7, P.L. 108-199, P.L. 108-447, and P.L.
109-115, respectively, provided the pay adjustments but reserved to the President the
(continued...)

Washington, DC, metropolitan area wrote a letter to President Bush asking him to
“embrace the principle of pay parity” between federal civilian employees and the
uniformed military. The Members stated that, “with many of our most experienced
employees poised to retire,” the ability “to recruit and retain quality employees” is
cri t i cal .⁴⁴
The Concurrent Resolution on the Budget, which provides the framework within
which Congress subsequently considers spending legislation, has several times in the
past included language expressing the sense of Congress on the federal civilian pay
adjustment. The FY2008 budget resolution as agreed to by the House (H.Con.Res.
99) on March 29, 2007, by a 216-210 vote (Roll No. 212), includes such a provision
at Section 510 which states the Sense of the House that federal civilian pay should
be adjusted at the same time and in the same proportion as pay for the uniformed
military. The Senate’s version of the budget resolution (S.Con.Res. 21) as agreed to
on March 23, 2007, by a 52-47 vote (No. 114), does not include such a provision.
Any congressional recommendation on the pay adjustment has usually been
included in the appropriations bill which provides funding for the general
government. In the 110^th Congress this bill will be called the Financial Services and
General Government Appropriations Bill. On May 3, 2007, Representative Tom
Davis, Ranking Member on the House Committee on Oversight and Government
Reform, sent a letter to the chairmen and ranking members of the House Committee
on Appropriations and its Subcommittee on Financial Services and General
Government urging the committee “to ensure parity in pay adjustments for civilian
and military personnel” for FY2008. In the letter, Mr. Davis stated his belief that it
is critical for civilian and military personnel to receive similar pay adjustments
because “Federal civilian employees from DOD, DHS, FBI, CIA, U.S. Customs
Service, Secret Service, Department of Justice, Department of State, and many other
agencies” support the efforts of the uniformed military and “work to ensure the
security of our nation and people.”⁴⁵
H.R. 2829, the Financial Services and General Government (FSGG)
Appropriations Act for FY2008, as passed by the House of Representatives⁴⁶ and

⁴³ (...continued)
decision as to how the increases would be allocated between the annual and locality pay
adjustments.
⁴⁴ The letter was signed by Representatives Thomas M. Davis, III, Steny H. Hoyer, James
P. Moran, C.A. “Dutch” Ruppersberger, John P. Sarbanes, Chris Van Hollen, Frank R.
Wolf, Albert R. Wynn, and Delegate Eleanor Holmes Norton.
⁴⁵ Letter from Representative Tom Davis to Representatives David Obey, Jose Serrano, Jerry
Lewis and Ralph Regula, May 3, 2007. See CRS Report RL33446, Military Pay and
Benefits: Key Questions and Answers, by Charles A. Henning for information on the
military pay raise.
⁴⁶ Rep. Jose Serrano introduced H.R. 2829 on June 22, 2007. The Committee on
Appropriations reported the bill on June 22, 2007, (H.Rept. 110-207) and it passed the
House of Representatives, amended, on a 240-179 (Roll No. 606) vote on June 28, 2007.
Earlier the Subcommittee on Financial Services and General Government marked up the bill
(continued...)

reported in the Senate,⁴⁷ provides a 3.5% pay adjustment for federal civilian
employees, including employees in the Department of Homeland Security and
employees in the Department of Defense (DOD) who are represented by a labor
organization. DOD employees who are eligible to be represented by a labor
organization, but are not so represented, will receive the pay adjustment unless pay
for their positions is adjusted under 5 U.S.C. §9902. The provision is Section 739(a)
of the House-passed bill and Section 740(a) of the Senate bill as reported. Section

601 of the bills provides that pay raises must be absorbed within appropriated levels.

The Statement of Administration Policy on H.R. 2829 issued by OMB on June 27,
2007, expressed strong opposition to the 3.5% pay adjustment, stating that it “would
cost agencies over $600 million in FY2008 and would not target any specific
recruitment or retention challenges.” The statement also urged that the provision
related to a pay adjustment for DHS and DOD employees be deleted, saying that it
“backs away from the concept of pay-for-performance and is ambiguous as to how
the increase would be applied.”⁴⁸
The FSGG appropriations were included as Division D of P.L. 110-161,
Consolidated Omnibus Appropriations, 2008 (H.R. 2764), that President Bush signed
on December 26, 2007. The law provides an average 3.5% pay adjustment for
federal civilian employees, including employees in the Department of Homeland
Security and employees in the Department of Defense (DOD) who are represented
by a labor organization. DOD employees who are eligible to be represented by a
labor organization, but are not so represented, will receive the pay adjustment unless
pay for their positions is adjusted under 5 U.S.C. §9902. Section 601 of the law
requires the pay raises to be funded within appropriated levels and Section 740(a)
authorizes the pay adjustment. On January 4, 2008, the President issued Executive
Order 13454, which allocated the pay increase as 2.5% annual and 1.0% locality.⁴⁹
OPM published the 2008 salary tables on its website and these are available at
[http://www.opm.gov]. Table 2 shows the recommended locality payments, the
authorized locality payments, and the net annual and locality pay increases for
January 2008.

⁴⁶ (...continued)
and forwarded it to the full committee by voice vote on June 5, 2007. The Committee on
Appropriations marked up the bill on June 11, 2007, and again on June 21, 2007, to list the
earmarks, and approved it by voice vote both times.
⁴⁷ U.S. Congress, Senate Committee on Appropriations, Financial Services and General
Government Appropriations Bill, 2008, report to accompany H.R. 2829, 110^th Cong., 1^st
sess., S.Rept. 110-129 (Washington: GPO, 2007), p. 114. The Senate Subcommittee on
Financial Services and General Government marked up the bill and forwarded it to the full
committee by a 5-4 roll call vote on July 10, 2007. The Committee on Appropriations
marked up the bill and ordered it reported by a 15-14 roll call vote on July 12, 2007.
⁴⁸ U.S. Executive Office of the President, Office of Management and Budget, Statement of
Administration Policy, H.R. 2829, Financial Services and General Government
Appropriations Act 2008, June 27, 2007, p. 4.
⁴⁹ U.S. President (Bush), “Adjustments of Certain Rates of Pay,” Executive Order 13454,
Federal Register, vol. 73, January 8, 2008, pp. 1480-1492.

Proposed Legislation Related to Pay
On March 29, 2007, Senator George Voinovich, Ranking Member of the Senate
Homeland Security and Governmental Affairs’ Subcommittee on Oversight of
Government Management, the Federal Workforce, and the District of Columbia,
introduced S. 1045, the Federal Workforce Performance Appraisal and Management
Improvement Act of 2007. (He introduced similar legislation, S. 3492, in the 109^th
Congress.) It was referred to the Senate Committee on Homeland Security and
Governmental Affairs. Among other provisions, the bill would require agencies to
establish one or more performance appraisal systems having at least three summary
rating levels — unacceptable, fully successful, and above fully successful; make it
mandatory that managers and supervisors receive training in performance
management; and require agencies to establish comprehensive management
succession programs providing training to develop employees to become managers.
S. 1045 also would require an employee to receive a summary performance rating of
at least fully successful to receive a within-grade increase, an annual pay adjustment,
a locality pay adjustment, a special rate, or a prevailing rate (blue-collar) adjustment.
Agencies would be required to provide employees with annual performance
evaluations in writing.
Senator Voinovich also introduced S. 1046, the Senior Professional^th
Performance Act of 2007, on March 29, 2007. (In the 109 Congress, similar
provisions were included in S. 3492 at Section 6.) The bill was referred to the Senate
Subcommittee on Oversight of Government Management, the Federal Workforce,
and the District of Columbia of the Committee on Homeland Security and
Governmental Affairs. It was marked up and ordered reported without amendment
by the full committee on June 13, 2007. Under current law (5 U.S.C.
§5376(b)(1)(B)) Senior-Level (SL) and scientific and professional (ST) employees
may receive basic pay up to Level IV of the Executive Schedule ($145,400, as of
January 2007). In a significant change, S. 1046 would amend current law to provide
that SL and ST employees in agencies whose performance appraisal systems have
been certified by OPM as making meaningful distinctions in performance, could
receive basic pay up to Level II of the Executive Schedule ($168,000, as of January
2007). In agencies whose performance appraisal systems have not been so certified
by OPM, SL and ST employees could receive basic pay up to Level III of the
Executive Schedule ($154,600, as of January 2007).
In his statement upon introducing the bills, Senator Voinovich stated that
“employees should receive annually a rigorous evaluation” with pay determined “by
the productivity, effectiveness, and the contributions of an employee.” He stated that
the amendments proposed in S. 1046 would keep SL and ST employees “on equal
footing” with members of the Senior Executive Service in terms of pay and
performance management.⁵⁰
OPM Proposed Rule on Critical Pay. On April 25, 2007, OPM published
a proposed rule in the Federal Register that would allow higher rates of pay for

⁵⁰ Statement of Senator George Voinovich, Congressional Record, daily edition, vol. 153,
March 29, 2007, p. S4180.

positions that require a very high level of expertise in a scientific, technical,
professional, or administrative field and that are critical to an agency’s mission.⁵¹
OPM, in consultation with OMB, would approve the designations of critical pay
authority that could allow basic pay to be set at a rate up to Executive Schedule Level
I ($186,600, as of January 2007).

⁵¹ U.S. Office of Personnel Management, “Critical Position Pay Authority,” Federal
Register, vol. 72, April 25, 2007, pp. 20440-20442.

Table 1. Annual and Locality Pay Adjustments
Under FEPCA, 1991 to 2008
^Lo^ca^lit^y^{Net I}ⁿ^creas^e^,
^ECI-^B^a^se^d^Paym^en^ts^Lo^ca^lit^y^Annua^{l a}ⁿ^d
^Annua^l^Annua^l^Required^Paym^en^ts^Lo^ca^lit^y^Pa^y
^Yea^r^Adjustm^e^nt^Adjustm^e^nt^by^Authorized^(Nati^oⁿ^a^l
^{Required by}^Authorized^FE^PCA^(Nati^oⁿ^a^l^A^v^erage,
^FE^PCA^(Nati^oⁿ^a^l^A^v^erage)^Weig^hted)
^A^v^erage)
¹⁹⁹¹^—^4.1%^—^—^4.1%
¹⁹⁹²^4.2%^4.2%^—^—^4.2%
¹⁹⁹³^3.7%^3.7%^—^—^3.7%
¹⁹⁹⁴^2.2%⁰³^.95%^3.95%^3.95%
¹⁹⁹⁵^2.6%^2.0%^6.44%^5.05%^3.08%
¹⁹⁹⁶^2.4%^2.0%^8.58%^5.56%^2.49%
¹⁹⁹⁷^2.3%^2.3%^11.29%^6.37%^3.09%
¹⁹⁹⁸^2.8%^2.3%^14.30%^6.93%^2.84%
¹⁹⁹⁹^3.1%^3.1%^16.95%^7.50%^3.65%
²⁰⁰⁰^3.8%^3.8%^20.62%^8.62%^4.89%
²⁰⁰¹^2.7%^2.7%^23.12%^9.77%^3.76%
²⁰⁰²^3.6%^3.6%^25.92%^10.95%^4.72%
²⁰⁰³^3.1%^3.1%^27.59%^12.12%^4.21%
²⁰⁰⁴^2.7%^2.7%^25.71%^13.81%^4.24%
²⁰⁰⁵^2.5%^2.5%^25.51%^15.01%^3.54%
²⁰⁰⁶^2.1%^2.1%^25.85%^16.22%^3.19%
²⁰⁰⁷^1.7%^1.7%^24.15%^16.80%^2.24%
²⁰⁰⁸^2.5%^2.5%^31.02%^18.13%^3.58%
^S^o^u^rces:^L^o^c^a^lity^-ba^s^e^d^c^o^m^p^a^r^a^b^ility^pa^y^m^eⁿ^ts^be^g^a^{n in 1994.}^For^the^ECI-re^quire^{d a}^nnua^{l a}^d^jus^t^m^e^{nt, s}^e^e
^U^.^{S. D}^e^pa^r^t^m^e^{nt of}^L^a^bor^{, B}^u^r^e^a^u^of^L^a^bor^Sta^tis^tic^s^,^Em^ploy^m^e^{nt C}^o^s^t^I^nde^x^,^S^e^p^t^em^b^e^{r o}^f^each^y^ear.^F^o^r
^the^loc^a^lity^pa^y^m^eⁿ^{ts re}^quire^{d by}^FEP^C^A^,^se^e^Re^{port on Loc}^a^lity^-Base^d^Com^parability^Pay^m^eⁿ^{ts for the}
^G^e^ne^r^a^{l Sc}^he^dule^,^{Annual Re}^por^{t of t}^h^e^Pr^e^s^ideⁿ^t’^s^Pay^Ageⁿ^t^,^Decem^b^e^{r o}^f^each^y^ear.^F^o^{r t}^h^{e a}^nnua^{l a}ⁿ^d
^loc^a^lity^pa^y^ad^j^u^s^t^m^e^nts^a^u^thoriz^e^d^{, s}^e^e^E.O^.^12736,^D^e^c^.^{12, 1990; E.O}^.^{12786, D}^e^c^.^{26, 1991; E.O}^.^12826,
^D^e^c^.^{30, 1992; P}^r^e^s^ideⁿ^tia^{l m}^e^m^o^r^a^ndum^of^D^e^c^.^1,^{1993; E.O}^.^{12944, D}^e^c^.^{28, 1994; E.O}^.^{12984, D}^e^c^.^28,
^1995;^E.O^.^{13033, D}^e^c^.^{27, 1996; E.O}^.^{13071, D}^e^c^.^{29, 1997; E.O}^.^{13106, D}^e^c^.^{7, 1998; E.O}^.^{13144, D}^e^c^.^21,
^{1999; E.O}^.^{13182, D}^e^c^.^{23, 2000; E.O}^.^13249,^D^e^c^.^28,^{2001; E.O}^.^s^{13282, D}^e^c^.^{31, 2002, a}^{nd 13291, Ma}^r^.^21,
^{2003; E.O}^.^s^{13322, D}^e^c^.^{30, 2003, a}^{nd 13332, Ma}^r^.^3,^{2004; E.O}^.^{13368, D}^e^c^.^30,^2004;^E.O^.^{13393, D}^e^c^.^22,
^{2005; E.O}^.^{13420, D}^e^c^.^{21, 2006; a}^{nd E.O}^.^{13454, J}^a^{n. 4, 2008.}

Table 2. January 2008 Recommended Locality Payments,
Authorized Locality Payments, and Net Annual and Locality Pay
Increase
Net
2008 2008 Increase,Annual
Pay AreasRecommendedLocalityAuthorizedLocalityand
P ayments P ayments LocalityPay
(weighted)
Atlanta-Sandy Springs-Gainesville, GA-31.90%17.30%3.75%
AL, CSA
Boston-Worcester-Manchester, MA-
NH, CSA, plus Barnstable County, MA,
and Berwick, Eliot, Kittery, South38.50%22.51%3.80%
Berwick, and York towns in York
County, ME
Buffalo-Niagara-Cattaraugus, NY, CSA28.04%15.37%3.60%
Chicago-Naperville-Michigan City, IL-37.40%23.16%3.65%
IN-WI, CSA
Cincinnati-Middletown-Wilmingt on, 21.80% 17.77% 2.84%
OH-KY-IN, CSA
Cleveland-Akron-Elyria, OH, CSA29.07%17.11%3.52%
Columbus-Marion-Chillicothe, OH,24.12%15.80%3.21%
CSA
Dallas-Fort Worth, TX, CSA33.29%18.74%3.72%
Dayton-Springfield-Greenville, OH,25.52%15.26%3.39%
CSA
Denver-Aurora-Boulder, CO, CSA, plus31.45%21.03%3.36%
the Ft. Collins-Loveland, CO, MSA
Detroit-Warren-Flint, MI, CSA, plus32.86%22.53%3.34%
Lenawee County, MI
Hartford-West Hartford-Willimantic,
CT, CSA, plus the Springfield, MA,39.82%23.97%3.78%
MSA and New London County, CT
Houston-Baytown-Huntsville, TX, CSA35.07%27.39%3.10%
Huntsville-Decatur, AL, CSA20.80%14.23%3.07%
Indianapolis-Anderson-Columbus, IN,18.77%13.51%2.96%
CSA, plus Grant County, IN
Los Angeles-Long Beach-Riverside,
CA, CSA, plus the Santa Barbara-Santa38.05%25.26%3.52%
Maria-Goleta, CA, MSA and Edwards
Air Force Base, CA
Miami-Fort Lauderdale-Miami Beach,27.51%19.11%3.20%

FL, MSA, plus Monroe County, FL

Net
2008 2008 Increase,Annual
Pay AreasRecommendedLocalityAuthorizedLocalityand
P ayments P ayments LocalityPay
(weighted)
Milwaukee-Racine-Waukesha, WI, CSA29.09%16.73%3.56%
Minneapolis-St. Paul-St. Cloud, MN-32.50%19.43%3.59%
WI, CSA
New York-Newark-Bridgeport, NY-NJ-
CT-PA, CSA, plus Monroe County, PA44.88%26.36%3.97%
and Warren County, NJ
Philadelphia-Camden-Vineland, PA-NJ-
DE-MD, CSA, plus Kent County, DE,33.46%20.14%3.61%
Atlantic County, NJ, and Cape May
County, NJ
Phoenix-Mesa-Scottsdale, AZ, MSA30.52%14.74%3.88%
Pittsburgh-New Castle, PA, CSA22.94%14.93%3.19%
Portland-Vancouver-Beaverton, OR-
WA, MSA, plus Marion County, OR,30.03%18.72%3.45%
and Polk County, OR
Raleigh-Durham-Cary, NC, CSA, plus
the Fayetteville, NC, MSA, the23.40%16.82%3.06%
Goldsboro, NC, MSA, and the Federal
Correctional Complex, Butner, NC
Richmond, VA, MSA25.61%15.40%3.39%
Sacramento - Arden-Arcade - Yuba
City, CA-NV, CSA, plus Carson City,33.34%20.25%3.59%
NV
San Diego-Carlsbad-San Marcos, CA,39.19%22.00%3.91%
MSA
San Jose-San Francisco-Oakland, CA,
CSA, plus the Salinas, CA, MSA and55.34%32.53%4.23%
San Joaquin County, CA
Seattle-Tacoma-Olympia, WA, CSA,31.85%19.75%3.51%
plus Whatcom County, WA
Washington-Baltimore-Northern
Virginia, DC-MD-VA-WV, CSA, plus
the Hagerstown-Martinsburg, MD-WV,44.69%20.89%4.49%
MSA, the York-Hanover-Gettysburg,
PA, CSA, and King George County, VA
Rest of the U.S. (RUS)18.77%13.18%2.99%
Average 31.02% 18.13% 3.58%
^Sources^:^Mem^o^r^aⁿ^d^u^m^f^o^r^th^{e P}^r^esid^en^t’^{s P}^a^y^A^g^en^t^f^r^o^m^th^{e Fed}^e^r^a^{l Salar}^y^Co^uⁿ^c^il,^{Level of}
^C^o^mpar^{ability Payments}^for^Januar^{y 2}^{008 and O}^t^he^r^Ma^tte^{rs P}^e^rtaⁱⁿⁱⁿ^g^to^th^e^Lo^c^a^lity^P^a^y^P^r^o^g^r^a^m
^(Was^hⁱⁿ^g^t^on^:^O^c^t^.^27,^2006),^A^t^t^ach^m^eⁿ^t^.^Rep^o^r^t^oⁿ^Lo^ca^lity-^B^a^s^ed^Co^mp^a^r^a^b^{ility Pa}^ymen^{ts fo}^r

^t^h^{e G}^e^ner^a^l^Schedul^{e, Annual}^Repor^t^of^t^h^{e Pr}^esⁱ^d^ent^’^s^{Pay Agent}^(W^as^hⁱⁿ^g^t^on^{: Decem}^{ber 20,}
^2006),^{p. 16. U}^.^S^.^Presⁱ^d^en^t^(Bu^s^h⁾^{, “}^A^dj^u^s^t^m^en^t^s^of^C^e^rt^aiⁿ^R^a^t^e^s^of^Pay^,^{” Ex}^ecu^tⁱ^v^e^O^r^der^13454,
^Feder^a^{l Regis}^t^er^{, v}^o^{l. 73, J}^aⁿ^u^a^ry^{8, 2008, pp. 1480-}^{1492. MSA}^ref^e^rs^to^a^Metropolitan^Statis^tical
^A^r^{ea. CSA}^r^e^f^e^r^s^to^{a Co}^m^bⁱⁿ^ed^{Statistical A}^r^e^a^{. T}^h^{e lo}^cality^p^a^y^ar^{eas ar}^{e listed}^{at 5}^C.F.R.
^{§531.603. See als}^o^{, U.S. Of}^fⁱ^{ce of}^P^e^rs^onⁿ^e^l^Man^a^g^e^m^eⁿ^t^{, “}^L^ocality^P^a^y^A^r^eas^,”^Feder^a^{l Regis}^t^er^,
^v^o^l^.^{72, Ju}ⁿ^e^{22, 2007, pp. 34361-}^34363.
^No^tes:^A^cco^r^dⁱⁿ^g^to^OP^{M: “}^T^h^e^m^e^th^o^d^u^s^ed^to^{set lo}^cality^r^a^{tes clo}^s^{es a u}ⁿⁱ^f^o^r^m^p^e^r^cen^tag^e^o^f^th^e
^r^e^m^a^{ining lo}^cality^p^a^y^dⁱ^sp^ar^ity^,^af^ter^acco^{unting f}^o^r^cur^r^e^{nt lo}^cality^r^a^tes.^E^v^en^tho^ugh^the^o^v^er^all
^p^a^y^dⁱ^sp^ar^ity^{is h}ⁱ^g^h^e^rⁱⁿ^th^{e San}^J^o^se-^S^an^Fr^an^cisco^lo^cality^p^a^y^ar^{ea, th}^{e p}^a^y^dⁱ^sp^ar^ityⁱⁿ^th^e
^W^a^shⁱⁿ^g^t^oⁿ^{, DC, lo}^cality^p^a^y^ar^{ea in}^cr^eased^f^a^ster^b^e^tw^een^su^r^v^ey^s^so^th^er^e^is^a^lar^g^er^r^e^m^aⁱⁿⁱⁿ^g^p^a^y
^dis^p^arityⁱⁿ^th^{e W}^a^s^hⁱⁿ^g^t^on^{, DC}^{, locality}^pay^{area. Hen}^{ce, th}^e^DC^locality^pay^rais^{e is}^hⁱ^g^h^e^{r in}²⁰⁰⁸
^e^v^eⁿ^tho^{ugh the}^Sa^{n J}^o^se^-Saⁿ^Fr^aⁿ^cⁱ^sc^o^lo^c^a^lity^r^a^te^{is highe}^r^.^”
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