[Federal Register Volume 70, Number 242 (Monday, December 19, 2005)]
[Rules and Regulations]
[Pages 74996-74998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-24212]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 531

RIN 3206-AK78


General Schedule Locality Pay Areas

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: On behalf of the President's Pay Agent, the Office of 
Personnel Management is issuing final regulations on locality pay areas 
for General Schedule employees. The final regulations 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 the Federal Correctional Complex 
Butner, NC, to the Raleigh locality pay area under revised criteria for 
evaluating Federal facilities that cross locality pay area boundaries; 
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 will become effective in 
January 2006.

DATES: The regulations are effective January 1, 2006. The regulations 
are applicable on the first day of the first pay period beginning on or 
after January 1, 2006.

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). In 2005, 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 OMB as the basis for 
locality pay area definitions.
    On June 20, 2005, OPM issued a proposed rule on behalf of the Pay 
Agent to--
     Create new locality pay areas for Buffalo, Phoenix, and 
Raleigh;
     Merge the Kansas City, St. Louis, and Orlando locality pay 
areas with the Rest of U.S. locality pay area;
     Include several new areas of application in the new 
Raleigh locality pay area; and
     Add Fannin County, TX, to the Dallas locality pay area, 
Culpepper County, VA, to the Washington, DC, locality pay area, and 
change the name of the Santa Barbara-Santa Maria-Goleta, CA, 
Metropolitan Statistical Area within the Los Angeles locality pay area.

Comments Received

    We received 31 comments on the proposed regulations. Several of the 
commenters requested that separate locality pay areas be established in 
additional locations due to high living costs. The suggested areas 
included Eureka, CA; Fresno, CA; Las Vegas, NV; Norfolk, VA; Preston 
County, WV; Salt Lake City, UT; Tampa, FL; and Toledo, OH. Norfolk, 
Salt Lake City, and Tampa have been surveyed for the locality pay 
program in the past, but the surveys indicated that pay levels in each 
location were below pay levels in the RUS locality pay area.
    Living costs are not directly considered in setting locality pay or 
defining locality pay areas. Locality pay is set by comparing GS and 
non-Federal pay for the same levels of work to allow the Government to 
recruit and retain an adequate workforce. Locality pay is not designed 
to equalize living standards for GS employees across the country. Since 
living costs are just one of many factors that affect the supply and 
demand for labor, they are not considered separately.
    Several commenters were opposed to merging the Kansas City, St. 
Louis, and Orlando locality pay areas with the RUS area and expressed 
concerns about the impact on pay for employees in those areas. Salary 
survey results consistently show that the pay disparity in these three 
areas is below that in the RUS locality pay area. Since the purpose of 
locality pay is to enable the Government to offer higher pay in high-
pay areas, there is no policy-based justification for continuing these 
three cities as separate locality pay areas.
    Commenters expressed several other concerns about Kansas City, St. 
Louis,

[[Page 74997]]

and Orlando. These included that pay levels are higher in the core city 
than the broader locality pay area, that including outlying areas 
reduces pay levels, that living costs are higher in the suburbs than in 
the inner cities, that reductions in locality rates will cause staffing 
problems, and that recent increases in oil prices have affected 
employees in these three areas. Some or all of these same factors may 
also apply in any of the other locality pay areas, but they do not 
justify treating Kansas City, St. Louis, and Orlando differently than 
the other areas. The Pay Agent does not anticipate any significant 
staffing difficulties in Kansas City, St. Louis, or Orlando due to this 
action because the differences between the RUS rate and the current 
locality rates in these areas are small and the regulations are 
expected to become effective at the same time as an across-the-board GS 
pay increase.
    A number of commenters focused on the geographic coverage of 
existing locality pay areas. Some commenters recommended adding 
Colorado Springs to the Denver locality pay area, adding Toledo to the 
Detroit locality pay area, adding Fort Dix to the New York locality pay 
area, including San Diego in the Los Angeles locality pay area, 
including more locations in Pennsylvania near York County in the 
Washington-Baltimore locality pay area, extending locality pay to 
employees in foreign areas or in Alaska and Hawaii, and including 
nurses and other medical personnel in Fannin County, TX, who are paid 
under title 38, United States Code, in the Dallas locality pay area.
    Colorado Springs, Toledo, Fort Dix, and the additional areas in 
Pennsylvania do not pass the criteria recommended by the Federal Salary 
Council for including a location in an existing locality pay area. San 
Diego is already surveyed separately, and recent survey results 
indicate that pay levels in San Diego are similar to those in the Los 
Angeles locality pay area. While the Federal Salary Council considered 
combining several existing locality pay areas in 2003 in order to free 
up survey resources (including merging the Los Angeles and San Diego 
locality pay areas), they took no action on the proposal because BLS 
indicated there would not be any significant reduction in survey work. 
Because the areas under consideration were all large areas, they would 
still have to be surveyed separately for BLS' nationwide products, 
including the Employment Cost Index.
    Section 5304 of title 5, United States Code, does not provide for 
locality payments in foreign areas or in Alaska or Hawaii, so the Pay 
Agent cannot extend locality payments to employees in those areas.
    The Department of Veterans Affairs is responsible for setting pay 
for employees covered by title 38, United States Code, and is not 
required to use the locality pay area boundaries established by the 
President's Pay Agent under the GS locality pay program for those 
employees.
    Finally, both the American Federation of Government Employees and 
the prison wardens at the Federal Correctional Facility, Butner, NC, 
expressed support for adding the entire facility to the new Raleigh 
locality pay area.

The Federal Correctional Complex, Butner, NC

    The final regulations 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 124 permanently assigned 
GS employees, is in Granville County, outside the Raleigh CSA but less 
than a mile from the county line. Granville County, with a total of 
about 134 GS employees, does not pass the GS employment criterion 
previously recommended by the Federal Salary Council for including an 
adjacent county in a higher-paying locality pay area. Likewise, the 
portion of the prison in Granville County, with 124 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 concluded that 
it would not be administratively feasible or desirable to include only 
part of the prison facility in the new Raleigh locality pay area and 
proposed to include the entire correctional facility in that area.
    The Pay Agent requested that the Federal Salary Council consider 
this matter when it met in 2005. At its meeting on October 3, 2005, the 
Council voted to amend its recommended criteria for evaluating Federal 
facilities that cross locality pay area boundaries. The Pay Agent 
concurs with the Council's recommended revision, as set forth here:
    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 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.

Impact of Changes

    The changes in locality pay area boundaries move about 34,000 GS 
employees to the RUS locality pay area and move about 25,000 GS 
employees from the RUS locality pay area to a separate metropolitan 
locality pay area.

Waiver of Delay in Effective Date

    In order to give practical effect to these regulations at the 
earliest possible moment, I find that good cause exists for making this 
rule effective in less than 30 days. The delay in effective date is 
waived so that affected agencies and employees may benefit from the new 
locality pay area definitions on the effective date of the January 2006 
GS pay adjustment.

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 will not have a significant 
economic impact on a substantial number of small entities because they 
will 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.
Linda M. Springer,
Director.

0
Accordingly, OPM is amending 5 CFR part 531 as follows:

PART 531--PAY UNDER THE GENERAL SCHEDULE

0
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.

[[Page 74998]]

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 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

0
2. In Sec.  531.603, paragraph (b) is revised to read as follows:


Sec.  531.603  Locality pay areas.

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    (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 CSA;
    (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 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 MSA;
    (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 CSA, plus the Fayetteville, NC MSA, the Goldsboro, NC MSA, 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-PA-VA-WV--
consisting of the Washington-Baltimore-Northern Virginia, DC-MD-VA-WV 
CSA, plus the Hagerstown-Martinsburg, MD-WV MSA, the York-Hanover-
Gettysburg, PA CSA, 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.
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[FR Doc. 05-24212 Filed 12-16-05; 8:45 am]
BILLING CODE 6325-39-P