[Federal Register Volume 70, Number 117 (Monday, June 20, 2005)]
[Proposed Rules]
[Pages 35383-35385]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-12033]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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 

  Federal Register / Vol. 70, No. 117 / Monday, June 20, 2005 / 
Proposed Rules  

[[Page 35383]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 531

RIN 3206-AK78


General Schedule Locality Pay Areas

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: On behalf of the President's Pay Agent, the Office of 
Personnel Management is issuing proposed regulations on the locality 
pay program for General Schedule employees. The proposed regulations 
would merge the Kansas City, St. Louis, and Orlando locality pay areas 
with the Rest of U.S. locality pay area; create new locality pay areas 
for Buffalo, NY; Phoenix, AZ; and Raleigh, NC; add Fannin County, TX, 
to the Dallas-Fort Worth locality pay area; and make minor changes in 
the official description of the Los Angeles-Long Beach-Riverside and 
Washington-Baltimore-Northern Virginia locality pay areas. The new 
locality pay area definitions would become effective in January 2006.

DATES: We must receive comments on or before August 19, 2005.

ADDRESSES: Send or deliver comments to Donald J. Winstead, Deputy 
Associate Director for Pay and Performance Policy, Office of Personnel 
Management, Room 7H31, 1900 E Street, NW., Washington, DC 20415-8200; 
FAX: (202) 606-4264; or e-mail: [email protected].

FOR FURTHER INFORMATION CONTACT: Allan Hearne, (202) 606-2838; FAX: 
(202) 606-4264; e-mail: [email protected].

SUPPLEMENTARY INFORMATION: Section 5304 of title 5, United States Code, 
authorizes locality pay for General Schedule (GS) employees with duty 
stations in the contiguous United States and the District of Columbia. 
By law, locality pay is set by comparing GS pay rates with non-Federal 
pay rates for the same levels of work in each locality pay area. Non-
Federal pay levels are estimated by means of salary surveys conducted 
by the Bureau of Labor Statistics (BLS). Currently, there are 32 
locality pay areas: 31 separate metropolitan locality pay areas and a 
``Rest of U.S.'' (RUS) locality pay area that consists of all locations 
in the contiguous United States that are not part of one of the 31 
separate metropolitan locality pay areas.
    Section 5304(f) of title 5, United States Code, authorizes the 
President's Pay Agent (the Secretary of Labor, the Director of the 
Office of Management and Budget (OMB), and the Director of the Office 
of Personnel Management (OPM)) to determine locality pay areas. The 
boundaries of locality pay areas must be based on appropriate factors, 
which may include local labor market patterns, commuting patterns, and 
the practices of other employers. The Pay Agent must give thorough 
consideration to the views and recommendations of the Federal Salary 
Council, a body composed of experts in the fields of labor relations 
and pay policy and representatives of Federal employee organizations. 
The President appoints the members of the Federal Salary Council, which 
submits annual recommendations to the President's Pay Agent about the 
locality pay program. Based on recommendations of the Federal Salary 
Council, we use Metropolitan Statistical Area (MSA) and Combined 
Statistical Area (CSA) definitions established by the Office of 
Management and Budget as the basis for locality pay area definitions.

Merging Three Locality Pay Areas With the RUS Locality Pay Area

    The Federal Salary Council recommended in 2003 that the Pay Agent 
merge the Kansas City, St. Louis, and Orlando locality pay areas with 
the RUS locality pay area in 2005 and ask BLS to reallocate its survey 
resources to cover other areas. The Council made this recommendation 
because pay comparisons between General Schedule pay and non-Federal 
pay show that the overall pay disparity in those areas has been below 
that for the RUS locality pay area for several years. The RUS area 
serves as the ``base'' rate, since it is not reasonable to allow a 
locality pay rate in a metropolitan area to be below the catch-all RUS 
area rate that would apply just outside the metropolitan area. The 
Council determined that BLS survey resources would be better used in 
other locations currently in the RUS locality pay area where non-
Federal pay levels might warrant higher locality pay and where large 
numbers of GS employees work. The Pay Agent concurred with this 
recommendation in its 2003 report to the President, but later requested 
that the Council review the matter further.
    After reviewing more recent salary survey data, the Council 
recommended in 2004 that the Kansas City, St. Louis, and Orlando 
locality pay areas be merged with the RUS locality pay area in 2006. 
The Pay Agent concurred with this recommendation in its 2004 report to 
the President. This proposed regulation would implement the Council's 
recommendation by merging the Kansas City, St. Louis, and Orlando 
locality pay areas with the Rest of U.S. locality pay area in January 
2006.

New Locality Pay Areas for 2006

    The Council also recommended in 2004 that existing BLS surveys in 
the Austin, Buffalo, Louisville, Memphis, Phoenix, and Raleigh 
metropolitan areas be redesigned as full-scale locality pay surveys and 
that Buffalo, Phoenix, and Raleigh be made separate locality pay areas 
in 2006. This proposed regulation follows the Council's recommendation 
and would make Buffalo (Cattaraugus, Erie, and Niagara Counties, NY), 
Phoenix (Maricopa and Pinal Counties, AZ), and Raleigh (Chatham, 
Durham, Franklin, Harnett, Johnston, Orange, Person, and Wake Counties, 
NC) separate locality pay areas in 2006.
    The six metropolitan areas listed above each have 2,500 or more GS 
employees and 375,000 or more non-farm workers in the local economy (a 
sufficient base for measuring local pay levels). In addition, smaller-
scale BLS salary surveys indicated that pay levels in each area were 
above those found in the RUS locality pay area. For the 2004 review of 
locality pay, the Pay Agent asked BLS to produce data for these six 
metropolitan areas (including modeled data as done for the existing 
locality pay areas) and compared the survey results to base GS rates 
using its standard locality pay methodology. The Council based its 
recommendation to add three new locality pay areas in 2006 on pay 
comparisons showing that Buffalo, Phoenix, and Raleigh each had a 
Federal/non-Federal pay disparity

[[Page 35384]]

significantly higher than the pay disparity in the RUS locality pay 
area. The pay comparisons for Memphis showed that the pay disparity was 
less than 1 percentage point above the RUS area pay disparity and that 
pay disparities in Austin and Louisville were slightly below the RUS 
area pay disparity. BLS plans to continue work to redesign its salary 
surveys over the next several years, and the Federal Salary Council and 
the Pay Agent plan to review data for all six of these areas in the 
future as additional data become available.

Criteria for Areas of Application Applied to New Locality Pay Areas

    Based on the Council's recommendations, the Pay Agent established 
criteria for evaluating areas adjacent to metropolitan locality pay 
areas for inclusion in that locality pay area.
    The criteria are as follows:
    1. For adjacent MSAs and CSAs: To be included in an adjacent 
locality pay area, an adjacent MSA or CSA currently in the RUS locality 
pay area must have at least 1,500 GS employees and an employment 
interchange measure of at least 7.5 percent.
    2. 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 percent.
    3. For Federal facilities that cross locality pay area boundaries: 
To be included in an adjacent locality pay area, 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 those 
employees must be within 10 miles of the separate locality pay area, 
and a significant number of those employees must commute to work from 
the higher-paying locality pay area.
    To calculate commuting rates, OPM uses the ``Employment Interchange 
Measure'' which is defined by the Bureau of the Census as ``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.''
    Based on the above criteria, no additional areas would be added to 
the new Buffalo or Phoenix locality pay areas, and the following 
additional areas would be included in the new Raleigh locality pay 
area:
     The Fayetteville, NC, Metropolitan Statistical Area (MSA), 
consisting of Hoke and Cumberland Counties, NC;
     The Goldsboro, NC, MSA, consisting of Wayne County, NC; 
and
     The Federal Correctional Complex Butner, NC.

The Federal Correctional Complex Butner, NC

    The proposed regulations would include the Federal Correctional 
Complex Butner, NC, in the new Raleigh locality pay area. Based on 
information provided by the Wardens of the prison complex, about 1,050 
General Schedule employees are stationed at the prison, with an 
additional 375 to be added in the spring of 2006. The Durham/Granville 
County line runs through the prison complex. In fact, the county line 
runs through several of the buildings at the facility, and many 
employees work in more than one building on a daily basis. Most of the 
prison land area and buildings are located in Durham County, inside the 
Raleigh CSA, but the Low Security Institute, with approximately 285 GS 
employees, is in Granville County, outside of the Raleigh CSA but less 
than a mile from the county line. Granville County, with approximately 
295 GS employees, does not pass the GS employment criterion for 
including an adjacent county in a higher-paying locality pay area. 
Likewise, the portion of the prison in Granville County, with 285 GS 
employees, does not pass the 750 GS employment criterion for including 
all of a Federal facility in a locality pay area. However, the Pay 
Agent believes it would not be administratively feasible or desirable 
to include only part of the prison facility in the new Raleigh locality 
pay area and proposes to include the entire correctional facility in 
that area. We request that the Federal Salary Council consider this 
matter when it meets later this year and will defer a final decision on 
this matter until after we hear the Council's views.

Changes in Locality Pay Areas Because of Revisions in Metropolitan 
Statistical Areas

    On February 22, 2005, OMB published OMB Bulletin 05-02 updating 
MSAs. The bulletin adds the Bonham, TX Micropolitan Statistical Area 
(Fannin County, TX) to the Dallas-Fort Worth, TX CSA, and adds the 
Culpeper, VA Micropolitan Statistical Area (Culpeper County, VA) to the 
Washington-Baltimore-Northern Virginia, DC-MD-VA-WV CSA. The Bulletin 
also changes the name of the Santa Barbara-Santa Maria-Goleta, CA MSA 
to the Santa Barbara-Santa Maria, CA MSA.
    In keeping with these changes, the proposed regulations would add 
the Bonham, TX Micropolitan Statistical Area (Fannin County, TX) to the 
Dallas-Fort Worth, TX locality pay area. Under 5 CFR 531.606, any 
additions made by OMB in MSA or CSA definitions affecting locality pay 
areas will result in changes in the affected locality pay area that 
become effective at the beginning of the next calendar year. Because 
Culpeper County, VA already is part of the Washington-Baltimore-
Northern Virginia locality pay area, the boundaries of the Washington-
Baltimore-Northern Virginia area will not change. Finally, we have 
updated the definition of the Los Angeles-Long Beach-Riverside, CA 
locality pay area to reflect the new name of the Santa Barbara-Santa 
Maria, CA MSA.

Impact and Implementation

    The Pay Agent plans to implement the changes in locality pay area 
boundaries, as described above, in January 2006. Overall, the proposed 
changes in locality pay area boundaries would move about 34,000 GS 
employees to the RUS locality pay area and move about 25,000 GS 
employees to a separate metropolitan locality pay area from the RUS 
locality pay area.

E.O. 12866, Regulatory Review

    The Office of Management and Budget has reviewed this rule in 
accordance with E.O. 12866.

Regulatory Flexibility Act

    I certify that these regulations would not have a significant 
economic impact on a substantial number of small entities because they 
would apply only to Federal agencies and employees.

List of Subjects in 5 CFR Part 531

    Government employees, Law enforcement officers, Wages.

Office of Personnel Management.
Dan G. Blair,
Acting Director.

    Accordingly, OPM is proposing to amend 5 CFR part 531 as follows:

PART 531--PAY UNDER THE GENERAL SCHEDULE

    1. The authority citation for part 531 continues to read as 
follows:

    Authority: 5 U.S.C. 5115, 5307, and 5338; sec. 4 of Pub. L. 103-
89, 107 Stat. 981; and E.O. 12748, 56 FR 4521, 3 CFR, 1991 Comp., p. 
316; Subpart B also issued under 5 U.S.C. 5303(g), 5333, 5334(a), 
and 7701(b)(2); Subpart C also issued under 5 U.S.C. 5304, 5305, and 
5553; sections 302 and 404 of

[[Page 35385]]

Federal Employees Pay Comparability Act of 1990 (FEPCA), Pub. L. 
101-509, 104 Stat. 1462 and 1466; and section 3(7) of Pub. L. 102-
378, 106 Stat. 1356; Subpart D also issued under 5 U.S.C. 5335(g) 
and 7701(b)(2); Subpart E also issued under 5 U.S.C. 5336; Subpart F 
also issued under 5 U.S.C. 5304, 5305(g)(1), and 5553; and E.O. 
12883, 58 FR 63281, 3 CFR, 1993 Comp., p. 682 and E.O. 13106, 63 FR 
68151, 3 CFR, 1998 Comp., p. 224; Subpart G also issued under 5 
U.S.C. 5304, 5305, and 5553; section 302 of the FEPCA, Pub. L. 101-
509, 104 Stat. 1462; and E.O. 12786, 56 FR 67453, 3 CFR, 1991 Comp., 
p. 376.

Subpart F--Locality-Based Comparability Payments

    1. In Sec.  531.603, paragraph (b) is revised to read as follows:


Sec.  531.603  Locality pay areas.

* * * * *
    (b) The following are locality pay areas for purposes of this 
subpart:
    (1) Atlanta-Sandy Springs-Gainesville, GA-AL--consisting of the 
Atlanta-Sandy Springs-Gainesville, GA-AL CSA;
    (2) Boston-Worcester-Manchester, MA-NH-ME-RI--consisting of the 
Boston-Worcester-Manchester, MA-NH CSA, plus the Providence-New 
Bedford-Fall River, RI-MA MSA, Barnstable County, MA, and Berwick, 
Eliot, Kittery, South Berwick, and York towns in York County, ME;
    (3) Buffalo-Niagara-Cattaraugus, NY--consisting of the Buffalo-
Niagara-Cattaraugus, NY Combined Statistical Area;
    (4) Chicago-Naperville-Michigan City, IL-IN-WI--consisting of the 
Chicago-Naperville-Michigan City, IL-IN-WI CSA;
    (5) Cincinnati-Middletown-Wilmington, OH-KY-IN--consisting of the 
Cincinnati-Middletown-Wilmington, OH-KY-IN CSA;
    (6) Cleveland-Akron-Elyria, OH--consisting of the Cleveland-Akron-
Elyria, OH CSA;
    (7) Columbus-Marion-Chillicothe, OH--consisting of the Columbus-
Marion-Chillicothe, OH CSA;
    (8) Dallas-Fort Worth, TX--consisting of the Dallas-Fort Worth, TX 
CSA;
    (9) Dayton-Springfield-Greenville, OH--consisting of the Dayton-
Springfield-Greenville, OH CSA;
    (10) Denver-Aurora-Boulder, CO--consisting of the Denver-Aurora-
Boulder, CO CSA, plus the Ft. Collins-Loveland, CO MSA and Weld County, 
CO;
    (11) Detroit-Warren-Flint, MI--consisting of the Detroit-Warren-
Flint, MI CSA, plus Lenawee County, MI;
    (12) Hartford-West Hartford-Willimantic, CT-MA--consisting of the 
Hartford-West Hartford-Willimantic, CT CSA, plus the Springfield, MA 
MSA and New London County, CT;
    (13) Houston-Baytown-Huntsville, TX--consisting of the Houston-
Baytown-Huntsville, TX CSA;
    (14) Huntsville-Decatur, AL--consisting of the Huntsville-Decatur, 
AL CSA;
    (15) Indianapolis-Anderson-Columbus, IN--consisting of the 
Indianapolis-Anderson-Columbus, IN CSA, plus Grant County, IN;
    (16) Los Angeles-Long Beach-Riverside, CA--consisting of the Los 
Angeles-Long Beach-Riverside, CA CSA, plus the Santa Barbara-Santa 
Maria, CA MSA and all of Edwards Air Force Base, CA;
    (17) Miami-Fort Lauderdale-Miami Beach, FL--consisting of the 
Miami-Fort Lauderdale-Miami Beach, FL MSA, plus Monroe County, FL;
    (18) Milwaukee-Racine-Waukesha, WI--consisting of the Milwaukee-
Racine-Waukesha, WI CSA;
    (19) Minneapolis-St. Paul-St. Cloud, MN-WI--consisting of the 
Minneapolis-St. Paul-St. Cloud, MN-WI CSA;
    (20) New York-Newark-Bridgeport, NY-NJ-CT-PA--consisting of the New 
York-Newark-Bridgeport, NY-NJ-CT-PA CSA, plus Monroe County, PA, and 
Warren County, NJ;
    (21) Philadelphia-Camden-Vineland, PA-NJ-DE-MD--consisting of the 
Philadelphia-Camden-Vineland, PA-NJ-DE-MD CSA, plus Kent County, DE, 
Atlantic County, NJ, and Cape May County, NJ;
    (22) Phoenix-Mesa-Scottsdale, AZ--consisting of the Phoenix-Mesa-
Scottsdale, AZ Metropolitan Statistical Area;
    (23) Pittsburgh-New Castle, PA--consisting of the Pittsburgh-New 
Castle, PA CSA;
    (24) Portland-Vancouver-Beaverton, OR-WA--consisting of the 
Portland-Vancouver-Beaverton, OR-WA MSA, plus Marion County, OR, and 
Polk County, OR;
    (25) Raleigh-Durham-Cary, NC--consisting of the Raleigh-Durham-
Cary, NC Combined Statistical Area, plus the Fayetteville, NC 
Metropolitan Statistical Area, the Goldsboro, NC Metropolitan 
Statistical Area, and the Federal Correctional Complex Butner, NC;
    (26) Richmond, VA--consisting of the Richmond, VA MSA;
    (27) Sacramento--Arden--Arcade--Truckee, CA-NV--consisting of the 
Sacramento--Arden-Arcade'Truckee, CA-NV CSA, plus Carson City, NV;
    (28) San Diego-Carlsbad-San Marcos, CA--consisting of the San 
Diego-Carlsbad-San Marcos, CA MSA;
    (29) San Jose-San Francisco-Oakland, CA--consisting of the San 
Jose-San Francisco-Oakland, CA CSA, plus the Salinas, CA MSA and San 
Joaquin County, CA;
    (30) Seattle-Tacoma-Olympia, WA--consisting of the Seattle-Tacoma-
Olympia, WA CSA;
    (31) Washington-Baltimore-Northern Virginia, DC-MD-VA-WV--
consisting of the Washington-Baltimore-Northern Virginia, DC-MD-VA-WV 
CSA, plus the Hagerstown-Martinsburg, MD-WV MSA, and King George 
County, VA; and
    (32) Rest of U.S.--consisting of those portions of the continental 
United States not located within another locality pay area.
* * * * *
[FR Doc. 05-12033 Filed 6-17-05; 8:45 am]
BILLING CODE 6325-39-P