[Federal Register Volume 85, Number 133 (Friday, July 10, 2020)]
[Proposed Rules]
[Pages 41439-41442]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14255]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 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.
 
 ========================================================================
 

  Federal Register / Vol. 85, No. 133 / Friday, July 10, 2020 / 
Proposed Rules  

[[Page 41439]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 531

RIN 3206-AO05


General Schedule Locality Pay Areas

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: On behalf of the President's Pay Agent, the Office of 
Personnel Management is issuing proposed regulations to establish a new 
Des Moines, IA, locality pay area and to include Imperial County, CA, 
in the Los Angeles-Long Beach, CA, locality pay area as an area of 
application. The proposed changes in locality pay area definitions 
would be applicable on the first day of the first applicable pay period 
beginning on or after January 1, 2021, subject to issuance of final 
regulations. Locality pay rates for the new Des Moines, IA, locality 
pay area would be set by the President after the new locality pay area 
would be established by regulation.

DATES: We must receive comments on or before August 10, 2020.

ADDRESSES: You may submit comments, identified by docket number and/or 
Regulatory Information Number (RIN) and title, by the following method:
     Federal Rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.

All submissions received must include the agency name and docket number 
or RIN for this document. The general policy for comments and other 
submissions from members of the public is to make these submissions 
available for public viewing at http://www.regulations.gov as they are 
received without change, including any personal identifiers or contact 
information.

FOR FURTHER INFORMATION CONTACT: Joe Ratcliffe by email at [email protected] or by telephone at (202) 606-2838.

SUPPLEMENTARY INFORMATION: Section 5304 of title 5, United States Code, 
authorizes locality pay for General Schedule (GS) employees with duty 
stations in the United States and its territories and possessions. 
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 are based on appropriate factors, 
which may include local labor market patterns, commuting patterns, and 
the practices of other employers. The Pay Agent considers 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 Council, which submits annual 
recommendations to the Pay Agent about the administration of the 
locality pay program, including the geographic boundaries of locality 
pay areas. (The Federal Salary Council's recommendations are posted on 
the OPM website athttps://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/general-schedule/#url=Federal-Salary-Council.) The 
establishment or modification of pay area boundaries conforms to the 
notice and comment provisions of the Administrative Procedure Act (5 
U.S.C. 553).
    This proposal provides notice and requests comments on proposed 
regulations to implement the Pay Agent's plan to establish a new Des 
Moines, IA, locality pay area and to include Imperial County, CA, in 
the Los Angeles-Long Beach, CA, locality pay area as an area of 
application. (Annual Pay Agent reports on locality pay are posted on 
the OPM website athttps://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/general-schedule/#url=Pay-Agent-Reports.) As further 
discussed below, those changes were tentatively approved, pending 
appropriate rulemaking, in the December 19, 2019, report of the 
President's Pay Agent.

Establishing a New Des Moines, IA, Locality Pay Area

    Locality pay is set by comparing GS and non-Federal pay rates for 
the same levels of work in each locality pay area. Non-Federal salary 
survey data used to set locality pay rates are collected by the Bureau 
of Labor Statistics (BLS). BLS uses a method that permits Occupational 
Employment Statistics (OES) data to be used for locality pay. OES data 
are available for metropolitan statistical areas (MSAs) and combined 
statistical areas (CSAs) throughout the Country and permit evaluation 
of salary levels in many more locations than could be covered under the 
prior National Compensation Survey alone.
    The Federal Salary Council has been monitoring comparisons of GS 
and non-Federal pay in the ``Rest of U.S.'' MSAs and CSAs with 2,500 or 
more GS employees. Based on its review, the Federal Salary Council has 
recommended new locality pay areas be established for MSAs and CSAs 
with pay gaps averaging more than 10 percentage points above that for 
the ``Rest of U.S.'' locality pay area over an extended period, has 
identified the Des Moines-Ames-West Des Moines, IA CSA as such a 
metropolitan area, and has recommended that the Pay Agent establish 
that CSA as a new locality pay area. The President's Pay Agent has 
agreed to issue proposed regulations that would make that change by 
modifying 5 CFR 531.603(b) accordingly. Locality pay rates for the new 
locality pay area would be set by the President at a later date after 
it would be established by regulation.

Criteria for Areas of Application

    Locality pay areas consist of (1) the MSA or CSA comprising the 
basic locality pay area and, where criteria recommended by the Federal 
Salary Council and approved by the Pay Agent are met, (2) areas of 
application. Areas of application are locations that are adjacent to 
the basic locality pay area and meet approved criteria for inclusion in 
the locality pay area. Those criteria are explained below.
    The Pay Agent's current criteria for evaluating locations adjacent 
to a basic locality pay area for possible inclusion in the locality pay 
area as areas of application are as follows: For adjacent CSAs and 
adjacent multi-county MSAs the criteria are 1,500 or more GS

[[Page 41440]]

employees and an employment interchange rate of at least 7.5 percent. 
For adjacent single counties, the criteria are 400 or more GS employees 
and an employment interchange rate of at least 7.5 percent. The 
employment interchange rate is defined as the sum of the percentage of 
employed residents of the area under consideration who work in the 
basic locality pay area and the percentage of the employment in the 
area under consideration that is accounted for by workers who reside in 
the basic locality pay area. (The employment interchange rate is 
calculated by including all workers in assessed locations, not just 
Federal employees.) No locations adjacent to the Des Moines-Ames-West 
Des Moines, IA CSA meet these criteria.
    The Pay Agent also has criteria for evaluating Federal facilities 
that cross county lines into a separate locality pay area. 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.

Imperial County, CA

    In the Federal Salary Council meetings on April 10, 2018, and 
November 13, 2018, the Council heard testimony regarding Imperial 
County, CA, currently considered a ``Rest of U.S.'' location that is 
adjacent to both the Los Angeles-Long Beach, CA, and San Diego-
Carlsbad, CA, basic locality pay areas and has approximately 1,860 GS 
employees receiving a ``Rest of U.S.'' locality pay adjustment. 
Imperial County is unusual in that it is adjacent to two current 
locality pay areas and also shares a long border with Mexico.
    The applicable criteria for Imperial County are those applied for 
locations evaluated as single counties. To meet those criteria, 
Imperial County would need 400 or more GS employees and an employment 
interchange rate of 7.5 percent or more with the Los Angeles or San 
Diego basic locality pay areas. With approximately 1,860 GS employees, 
Imperial County meets the GS employment criterion, but it does not meet 
the requisite employment interchange rate for either the Los Angeles 
basic locality pay area (4.67 percent) or the San Diego basic locality 
pay area (3.03 percent). However, while both of those employment 
interchange rates are below 7.5 percent, the sum of the two employment 
interchange rates is 7.70 percent. We agree with the Council that the 
situation with respect to Imperial County is comparable to a single-
county location that would otherwise qualify as an area of application 
by virtue of being adjacent to only one basic locality pay area with an 
employment interchange rate of 7.5 percent or more. We also agree that, 
when a location is to be established as an area of application and is 
adjacent to two locality pay areas, the location should be included in 
the locality pay area with which it has the higher employment 
interchange rate. Accordingly, we propose that Imperial County, CA, be 
established as an area of application to the Los Angeles locality pay 
area.

Regulatory Impact Analysis

    OPM has examined the impact of this rule as required by Executive 
Order 12866 and Executive Order 13563, which direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public, 
health, and safety effects, distributive impacts, and equity). A 
regulatory impact analysis must be prepared for major rules with 
economically significant effects of $100 million or more in any 1 year. 
This rule has been not designated as a ``significant regulatory 
action,'' under Executive Order 12866, and it is not ``economically 
significant'' as measured by the $100 million threshold. Establishing a 
new locality pay area could have the long-term effect of increasing pay 
for Federal employees in affected locations if the President 
establishes higher locality pay percentages for the new locality pay 
area, and establishing Imperial County, CA, as an area of application 
will increase applicable locality pay rates for that county. In 
addition, studies suggest that increasing wages can raise the wages of 
other workers when employers need to compete for personnel. However, 
when locality pay percentages are adjusted, the practice has been to 
allocate a percent of the total GS payroll for locality pay raises and 
to have the overall cost for such pay raises be the same, regardless of 
the number of locality pay areas. Also, the increase in pay rates 
resulting from the addition of Imperial County, CA, to the Los Angeles 
locality pay area would affect a relatively small number of Federal 
employees. Thus, the changes in locality pay areas under this final 
rule are not expected to result in economic effects reaching the $100 
million threshold.

Reducing Regulation and Controlling Regulatory Costs

    This proposed rule, if finalized as proposed, is expected to impose 
no more than de minimis costs and thus be neither an E.O. 13771 
regulatory action nor an E.O. 13771 deregulatory action.

Regulatory Flexibility Act

    OPM certifies that this rule will not have a significant economic 
impact on a substantial number of small entities as this rule only 
applies to Federal agencies and employees.

Federalism

    OPM has examined this rule in accordance with Executive Order 
13132, Federalism, and has determined that this rule will not have any 
negative impact on the rights, roles and responsibilities of State, 
local, or tribal governments.

Civil Justice Reform

    This regulation meets the applicable standard set forth in 
Executive Order 12988.

Unfunded Mandates Act of 1995

    This rule will not result in the expenditure by state, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any year and it will not significantly or uniquely 
affect small governments. Therefore, no actions were deemed necessary 
under the provisions of the Unfunded Mandates Reform Act of 1995.

Congressional Review Act

    This action pertains to agency management, personnel, and 
organization and does not substantially affect the rights or 
obligations of nonagency parties and, accordingly, is not a ``rule'' as 
that term is used by the Congressional Review Act (Subtitle E of the 
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)). 
Therefore, the reporting requirement of 5 U.S.C. 801 does not apply.

Paperwork Reduction Act

    This rule does not impose any new reporting or record-keeping 
requirements subject to the Paperwork Reduction Act.

List of Subjects in 5 CFR Part 531

    Government employees, Law enforcement officers, Wages.


[[Page 41441]]


Office of Personnel Management.
Alexys Stanley,
Regulatory Affairs Analyst.

    Accordingly, OPM proposes to amend 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 Public Law 
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), 5305, 
5333, 5334(a) and (b), and 7701(b)(2); Subpart D also issued under 5 
U.S.C. 5335 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, and 5941(a), 
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 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.

* * * * *
    (b) The following are locality pay areas for the purposes of this 
subpart:
    (1) Alaska--consisting of the State of Alaska;
    (2) Albany-Schenectady, NY-MA--consisting of the Albany-
Schenectady, NY CSA and also including Berkshire County, MA;
    (3) Albuquerque-Santa Fe-Las Vegas, NM--consisting of the 
Albuquerque-Santa Fe-Las Vegas, NM CSA and also including McKinley 
County, NM;
    (4) Atlanta--Athens-Clarke County--Sandy Springs, GA-AL--consisting 
of the Atlanta--Athens-Clarke County--Sandy Springs, GA CSA and also 
including Chambers County, AL;
    (5) Austin-Round Rock, TX--consisting of the Austin-Round Rock, TX 
MSA;
    (6) Birmingham-Hoover-Talladega, AL--consisting of the Birmingham-
Hoover-Talladega, AL CSA and also including Calhoun County, AL;
    (7) Boston-Worcester-Providence, MA-RI-NH-ME--consisting of the 
Boston-Worcester-Providence, MA-RI-NH-CT CSA, except for Windham 
County, CT, and also including Androscoggin County, ME, Cumberland 
County, ME, Sagadahoc County, ME, and York County, ME;
    (8) Buffalo-Cheektowaga, NY--consisting of the Buffalo-Cheektowaga, 
NY CSA;
    (9) Burlington-South Burlington, VT--consisting of the Burlington-
South Burlington, VT MSA;
    (10) Charlotte-Concord, NC-SC--consisting of the Charlotte-Concord, 
NC-SC CSA;
    (11) Chicago-Naperville, IL-IN-WI--consisting of the Chicago-
Naperville, IL-IN-WI CSA;
    (12) Cincinnati-Wilmington-Maysville, OH-KY-IN--consisting of the 
Cincinnati-Wilmington-Maysville, OH-KY-IN CSA and also including 
Franklin County, IN;
    (13) Cleveland-Akron-Canton, OH--consisting of the Cleveland-Akron-
Canton, OH CSA and also including Harrison County, OH;
    (14) Colorado Springs, CO--consisting of the Colorado Springs, CO 
MSA and also including Fremont County, CO, and Pueblo County, CO;
    (15) Columbus-Marion-Zanesville, OH--consisting of the Columbus-
Marion-Zanesville, OH CSA;
    (16) Corpus Christi-Kingsville-Alice, TX--consisting of the Corpus 
Christi-Kingsville-Alice, TX CSA;
    (17) Dallas-Fort Worth, TX-OK--consisting of the Dallas-Fort Worth, 
TX-OK CSA and also including Delta County, TX;
    (18) Davenport-Moline, IA-IL--consisting of the Davenport-Moline, 
IA-IL CSA;
    (19) Dayton-Springfield-Sidney, OH--consisting of the Dayton-
Springfield-Sidney, OH CSA and also including Preble County, OH;
    (20) Denver-Aurora, CO--consisting of the Denver-Aurora, CO CSA and 
also including Larimer County, CO;
    (21) Des Moines-Ames-West Des Moines, IA--consisting of the Des 
Moines-Ames-West Des Moines, IA CSA;
    (22) Detroit-Warren-Ann Arbor, MI--consisting of the Detroit-
Warren-Ann Arbor, MI CSA;
    (23) Harrisburg-Lebanon, PA--consisting of the Harrisburg-York-
Lebanon, PA CSA, except for Adams County, PA, and York County, PA, and 
also including Lancaster County, PA;
    (24) Hartford-West Hartford, CT-MA--consisting of the Hartford-West 
Hartford, CT CSA and also including Windham County, CT, Franklin 
County, MA, Hampden County, MA, and Hampshire County, MA;
    (25) Hawaii--consisting of the State of Hawaii;
    (26) Houston-The Woodlands, TX--consisting of the Houston-The 
Woodlands, TX CSA and also including San Jacinto County, TX;
    (27) Huntsville-Decatur-Albertville, AL--consisting of the 
Huntsville-Decatur-Albertville, AL CSA;
    (28) Indianapolis-Carmel-Muncie, IN--consisting of the 
Indianapolis-Carmel-Muncie, IN CSA and also including Grant County, IN;
    (29) Kansas City-Overland Park-Kansas City, MO-KS--consisting of 
the Kansas City-Overland Park-Kansas City, MO-KS CSA and also including 
Jackson County, KS, Jefferson County, KS, Osage County, KS, Shawnee 
County, KS, and Wabaunsee County, KS;
    (30) Laredo, TX--consisting of the Laredo, TX MSA;
    (31) Las Vegas-Henderson, NV-AZ--consisting of the Las Vegas-
Henderson, NV-AZ CSA;
    (32) Los Angeles-Long Beach, CA--consisting of the Los Angeles-Long 
Beach, CA CSA and also including Imperial County, CA, Kern County, CA, 
San Luis Obispo County, CA, and Santa Barbara County, CA;
    (33) Miami-Fort Lauderdale-Port St. Lucie, FL--consisting of the 
Miami-Fort Lauderdale-Port St. Lucie, FL CSA and also including Monroe 
County, FL;
    (34) Milwaukee-Racine-Waukesha, WI--consisting of the Milwaukee-
Racine-Waukesha, WI CSA;
    (35) Minneapolis-St. Paul, MN-WI--consisting of the Minneapolis-St. 
Paul, MN-WI CSA;
    (36) New York-Newark, NY-NJ-CT-PA--consisting of the New York-
Newark, NY-NJ-CT-PA CSA and also including all of Joint Base McGuire-
Dix-Lakehurst;
    (37) Omaha-Council Bluffs-Fremont, NE-IA--consisting of the Omaha-
Council Bluffs-Fremont, NE-IA CSA;
    (38) Palm Bay-Melbourne-Titusville, FL--consisting of the Palm Bay-
Melbourne-Titusville, FL MSA;
    (39) Philadelphia-Reading-Camden, PA-NJ-DE-MD--consisting of the 
Philadelphia-Reading-Camden, PA-NJ-DE-MD CSA, except for Joint Base 
McGuire-Dix-Lakehurst;
    (40) Phoenix-Mesa-Scottsdale, AZ--consisting of the Phoenix-Mesa-
Scottsdale, AZ MSA;
    (41) Pittsburgh-New Castle-Weirton, PA-OH-WV--consisting of the 
Pittsburgh-New Castle-Weirton, PA-OH-WV CSA;
    (42) Portland-Vancouver-Salem, OR-WA--consisting of the Portland-
Vancouver-Salem, OR-WA CSA;
    (43) Raleigh-Durham-Chapel Hill, NC--consisting of the Raleigh-
Durham-Chapel Hill, NC CSA and also including Cumberland County, NC, 
Hoke County, NC, Robeson County, NC, Scotland County, NC, and Wayne 
County, NC;
    (44) Richmond, VA--consisting of the Richmond, VA MSA and also 
including Cumberland County, VA, King and Queen County, VA, and Louisa 
County, VA;
    (45) Sacramento-Roseville, CA-NV--consisting of the Sacramento-
Roseville, CA CSA and also including Carson City, NV, and Douglas 
County, NV;

[[Page 41442]]

    (46) San Antonio-New Braunfels-Pearsall, TX--consisting of the San 
Antonio-New Braunfels-Pearsall, TX CSA;
    (47) San Diego-Carlsbad, CA--consisting of the San Diego-Carlsbad, 
CA MSA;
    (48) San Jose-San Francisco-Oakland, CA--consisting of the San 
Jose-San Francisco-Oakland, CA CSA and also including Monterey County, 
CA;
    (49) Seattle-Tacoma, WA--consisting of the Seattle-Tacoma, WA CSA 
and also including Whatcom County, WA;
    (50) St. Louis-St. Charles-Farmington, MO-IL--consisting of the St. 
Louis-St. Charles-Farmington, MO-IL CSA;
    (51) Tucson-Nogales, AZ--consisting of the Tucson-Nogales, AZ CSA 
and also including Cochise County, AZ;
    (52) Virginia Beach-Norfolk, VA-NC--consisting of the Virginia 
Beach-Norfolk, VA-NC CSA;
    (53) Washington-Baltimore-Arlington, DC-MD-VA-WV-PA--consisting of 
the Washington-Baltimore-Arlington, DC-MD-VA-WV-PA CSA and also 
including Kent County, MD, Adams County, PA, York County, PA, King 
George County, VA, and Morgan County, WV; and
    (54) Rest of U.S.--consisting of those portions of the United 
States and its territories and possessions as listed in 5 CFR 591.205 
not located within another locality pay area.
[FR Doc. 2020-14255 Filed 7-9-20; 8:45 am]
BILLING CODE 6325-39-P