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Salary Council Makes 2011 Locality Pay Rate Recommendations

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The Federal Salary Council has recommended a 43.75 percent average locality pay rate for federal employees in 2011, but the 2010 civilian pay raise is still a mystery.

The council recommended the highest locality rate for San Francisco at 61.30 percent, with Washington close behind at 60.23 percent. New York City followed with a 53.82 percent recommendation, and Hartford, Conn., was fourth at 50.15 percent. The council recommended a 33.77 percent rate for the Rest of the U.S. category.

Those locality rate recommendations do not mean that federal employees will receive an average 43.75 percent pay raise in 2011. Rather, the base salaries for federal jobs in many areas are adjusted by a percentage that changes annually and is designed to close the gap between federal and private sector salaries in certain occupations. The 43.75 percent represents the average adjustment in salaries that the council believes is necessary to close that gap.

In a memo to Labor Secretary Hilda Solis, Office of Personnel Management Director John Berry, and Office of Management and Budget Director Peter R. Orszag, council members explained that they could not compare their 2011 recommendations to the locality increases for 2010, because that pay raise is still being negotiated. In 2008, the council recommended an average 40.87 percent locality rate for 2010.

“The most recent memorandum produced by the Federal Salary Council indicates that the pay gap between federal employees and their counterparts in the private sector remains an ongoing and serious issue,” said National Treasury Employees Union President Colleen Kelley, a council member.

At its Oct. 19 meeting, the council chose not make any recommendations about the 2010 or 2011 pay raises because of the various bills related to the civilian pay raise in Congress. A portion of the pay raise passed by Congress will be allocated to base pay increases for federal workers and part of it will come in the form of locality pay hikes.

The House in July passed a 2 percent civilian pay raise as part of the fiscal 2010 financial services spending bill, matching the Obama administration’s recommendation. The Senate has not moved on its own version of the bill, which includes a 2.9 percent civilian pay hike. Meanwhile the fiscal 2010 Defense Authorization Act includes a 3.4 percent pay increase for service members.

The salary council also decided not to adjust the pay surveys on which locality pay is based to avoid distorting private sector pay data caused by the large incentives given to some non government workers who are the equivalent of General Schedule level 12 administrative employees.

“Since we are far from full comparability and never implement the rates indicated by the survey results, we do not believe this data anomaly is a critical issue,” the memo said. “We do believe that pay setting for federal employees should be a transparent process and we recommend using the data as delivered by [the Bureau of Labor Statistics, which performs the surveys], as the council does not feel it is appropriate to make ad hoc decisions about which data are suitable and which are not.”