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Obama is First President to Freeze Locality Pay

Obama is First President to Freeze Locality Pay

Alyssa Rosenberg | Government Executive

December 02, 2009

After 2003, the president has been able to freeze or decrease locality pay rates as long as that freeze or reduction “would not immediately create another pay disparity in excess of 5 percent within the locality.” But the President’s Pay Agent, the federal officials who oversee civilian wages, says the gap between public and private sector pay for every locality in the United States currently is larger than 5 percent, so it is impossible for the president to single-handedly create a 5 percent pay gap by adjusting locality pay rates. Under those circumstances, the president has significant leeway to change locality pay.

Jessie Klement, legislative director for the Federal Managers Association, said Obama’s decision would have disparate impacts on federal employees across the country.

“While the president’s decision to also freeze locality rates at 2009 levels may help some feds in areas where the pay gap shrunk, the average pay gap between the public and private sectors still increased in 2009, and civil servants in cities where the gap grew considerably and the cost of living remains high will undoubtedly be negatively impacted by this decision,” she said.

Randy Erwin, legislative director for the National Federation of Federal Employees, said dedicating the entire federal pay raise to base pay could help employees located in areas like the “Rest of the United States” locality, where pay adjustments are lower. But he warned that Obama was underestimating the severity and impact of the gap between public and private sector pay.

“Our biggest concern is the overall percentage pay adjustment that federal workers will receive,” Erwin said, “not the way that number will be split between base pay and locality pay.”

Howard Risher, a compensation specialist who was a consultant to the Office of Personnel Management when the Federal Employees Pay Comparability Act was crafted, said Obama’s decision will not affect other pay increases federal employees are eligible for, including quality step increases, which boost employees’ pay within their current grade.

“Everyone talks about the 2 percent, but those [other increases] are not small amounts,” he said. “They’re not huge by any means, but they’re there.”

NFFE’s Erwin expressed disappointment at Obama’s mention of the Sept. 11 terrorist attacks to justify a national emergency allowing the president to set an alternative pay plan.

“That is the treatment that federal workers came to expect under the previous administration, but not this one,” Erwin said. “The economy isn’t doing well; we understand that. Let’s leave Sept. 11 out of it.”

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