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Federal Pay Raises: How Locality Rates Are Set

Federal Pay Raises: How Locality Rates Are Set

U.S. Office of Personnel Management

For each wage area, OPM identifies a "lead"agency. The “lead” agency is responsible for conducting wage surveys, analyzing data, and issuing wage schedules under the policies and procedures prescribed by OPM. All agencies in a wage area pay their hourly wage employees according to the wage schedules developed by the lead agency.

OPM has identified DOD as the lead agency for each local wage area. OPM does not conduct local wage surveys.

Labor organizations play an important role in the wage determination process by providing representatives at all levels of the wage determination process. The employee unions having the greatest number of wage employees under exclusive recognition designate two of the five members of a lead agency’s national level wage committee. Locally, the union with the most employees under exclusive recognition in a wage area designates one of the three members of each Local Wage Survey Committee. In addition, labor organizations nominate half of the Federal employees who collect wage data from private enterprise employers. A partnership team of one labor data collector and one management data collector visits each surveyed employer.

Comparability: Wage System and General Schedule

Under the FWS, your employer bases your pay on what private industry is paying for comparable levels of work in your local wage area. Employees are paid the full prevailing rate at step 2 of each grade level. Step 5, the highest step in the FWS, is 12 percent above the prevailing rate of pay.

The General Schedule (GS) is a separate pay system covering most white-collar civilian Federal employees. Surveys of non-Federal employers (including State and local governments) determine the pay for GS employees. There are a number of other differences between the GS and FWS in terms of occupational coverage, geographic coverage, pay ranges, and pay adjustment cycles.

Pay Caps and Delays

The preceding sections describe the basic structure of the FWS and its method of setting wages based on local prevailing rates. However, specific legislation may limit or delay annual wage adjustments for some FWS employees.

If you have any questions about the system and how it affects you, please contact your local personnel office.

Locality Rates

The specific locality rates for the following metropolitan areas:
Columbus (OH),
Dallas-Ft. Worth,

Huntsville (AL),
Los Angeles,
Minneapolis-St. Paul,
New York,
Richmond (VA),
San Diego,
San Francisco-San Jose-Oakland,

Click on each of the above links to see a salary table for each metro and a definition of which counties each area includes.

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