[Federal Register Volume 85, Number 200 (Thursday, October 15, 2020)]
[Rules and Regulations]
[Pages 65187-65189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-22320]



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 Rules and Regulations
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
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  Federal Register / Vol. 85, No. 200 / Thursday, October 15, 2020 / 
Rules and Regulations  

[[Page 65187]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 531

RIN 3206-AO05


General Schedule Locality Pay Areas

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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

SUMMARY: On behalf of the President's Pay Agent, the Office of 
Personnel Management (OPM) is issuing final regulations to establish a 
new Des Moines-Ames-West 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. Those changes in locality 
pay area definitions are applicable on the first day of the first pay 
period beginning on or after January 1, 2021. Locality pay rates for 
the new Des Moines-Ames-West Des Moines, IA, locality pay area will be 
set by the President.

DATES: The regulations are effective November 16, 2020. The regulations 
are applicable on the first day of the first pay period beginning on or 
after January 1, 2021.

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 
(U.S.C.), authorizes locality pay for General Schedule (GS) employees 
with duty stations in the United States and its territories and 
possessions. Section 5304(f) 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 on the locality pay program to the Pay Agent. 
The establishment or modification of locality pay area boundaries must 
conform to the notice and comment provisions of the Administrative 
Procedure Act (5 U.S.C. 553).
    On July 10, 2020, OPM published a proposed rule in the Federal 
Register on behalf of the Pay Agent. (See 85 FR 41439.) The proposed 
rule proposed establishing a new Des Moines-Ames-West Des Moines, IA, 
locality pay area and including Imperial County, CA, in the Los 
Angeles-Long Beach, CA, locality pay area as an area of application.
    The proposed rule provided a 30-day comment period. Accordingly, 
the Pay Agent reviewed comments received through August 10, 2020. After 
considering those comments, the Pay Agent has decided to implement the 
locality pay area definitions in the proposed rule.

Impact and Implementation

    Establishing a new Des Moines-Ames-West Des Moines, IA, locality 
pay area will impact about 3,100 GS employees. Locality pay rates now 
applicable in that area will not change automatically because locality 
pay percentages are established by Executive order under the 
President's authority in 5 U.S.C. 5304 or 5304a, and the President 
decides each year whether to adjust locality pay percentages. When 
locality pay percentages are adjusted, past practice has been to 
allocate a percent of the total GS payroll for locality pay raises and 
to have the overall dollar cost for such pay raises be the same, 
regardless of the number of locality pay areas. If a percent of the 
total GS payroll is allocated for locality pay increases, the addition 
of a new locality pay area results in a somewhat smaller amount to 
allocate for locality pay increases in existing areas. Implementing 
higher locality pay rates in the new Des Moines-Ames-West Des Moines, 
IA, locality pay area could thus result in relatively lower pay 
increases for employees in existing locality pay areas than they would 
otherwise receive.
    Including Imperial County, CA, in the Los Angeles-Long Beach, CA, 
locality pay area as an area of application will impact about 1,860 GS 
employees.

Comments on the Proposed Rule

    OPM received 28 comments on the proposed rule. Most of those 
comments supported the proposed changes in the definitions of locality 
pay areas.
    Some commenters who opposed the creation of the Des Moines-Ames-
West Des Moines, IA, locality pay area commented that indicators of 
living costs should be considered in defining locality pay areas or in 
setting locality pay. Living costs are not directly considered in the 
locality pay program. Under 5 U.S.C. 5304, locality pay rates are based 
on comparisons of GS pay and non-Federal pay at the same work levels in 
a locality pay area, and as explained in the proposed rule the Des 
Moines-Ames-West Des Moines, IA, locality pay area is being established 
based on such pay comparisons. While relative living costs may 
indirectly affect non-Federal pay levels, living costs are just one of 
many factors that affect the supply of and demand for labor, and 
therefore labor costs, in a locality pay area.
    Some commenters suggested that Imperial County, CA, be established 
as an area of application to the San Diego-Carlsbad, CA, locality pay 
area rather than the Los Angeles-Long Beach, CA, locality pay area. One 
commenter suggested that, in addition to considering overall employment 
interchange rates, the Pay Agent should consider how much of the 
employment interchange is between Imperial County and outlying portions 
of the basic locality pay area as opposed to its core. As explained in 
the proposed rule, we agree with the Federal Salary Council 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. Imperial County has a greater rate of employment interchange with 
the Los Angeles-Long Beach, CA, basic locality pay area than with the 
San Diego-Carlsbad, CA, basic locality pay area. Individuals concerned 
about the criteria by which locality pay

[[Page 65188]]

areas are defined may provide testimony to the Federal Salary Council.
    Some commenters objected that certain locations were to remain in 
the ``Rest of U.S.'' (RUS) locality pay area under the proposed rule. 
Locations that will remain in the RUS locality pay area do not meet 
approved criteria for being established as a new locality pay area or 
an area of application. Some commenters expressed concern about 
possible recruitment and retention difficulties the commenters believe 
agencies may have in such locations. The Pay Agent has no evidence that 
the changes these final regulations will make in locality pay area 
definitions will create recruitment and retention challenges for 
Federal employers. However, should recruitment and retention challenges 
exist in a location, Federal agencies have considerable administrative 
authority to address those challenges through the use of current pay 
flexibilities. Information on these flexibilities is posted on the OPM 
website at http://www.opm.gov/policy-data-oversight/pay-leave/pay-and-leave-flexibilities-for-recruitment-and-retention.
    One commenter appeared to believe that two counties in the 
Washington-Baltimore-Arlington, DC-MD-VA-WV-PA, Combined Statistical 
Area defined in OMB Bulletin No. 18-03 would not be included in the 
Washington-Baltimore-Arlington, DC-MD-VA-WV-PA, locality pay area, 
which is not the case. As explained in the proposed rule, locality pay 
areas consist of (1) the metropolitan statistical area (MSA) or 
combined statistical area (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. Regarding 
the MSAs and CSAs comprising basic locality pay areas, these final 
regulations define MSA as the geographic scope of an MSA as defined in 
OMB Bulletin No. 18-03 and define CSA as the geographic scope of a CSA 
as defined in OMB Bulletin No. 18-03. (OMB Bulletin No. 18-03 is posted 
at https://www.whitehouse.gov/wp-content/uploads/2018/04/OMB-BULLETIN-NO.-18-03-Final.pdf.) Where a locality pay area defined in these 
regulations lists one or more locations in addition to the MSA or CSA 
comprising the basic locality pay area, those additional locations are 
areas of application that meet criteria recommended by the Federal 
Salary Council and approved by the President's Pay Agent. OPM plans to 
post the definitions of locality pay areas on its website soon after 
these final regulations are issued.
    One commenter appeared to believe that a Des Moines-Ames-West Des 
Moines, IA, locality pay area had already been established prior to 
publication of the proposed rule. That is not the case.
    One commenter suggested that each GS employee's total basic pay 
remain the same but be redistributed to provide more for the base GS 
pay rate and less for the locality payment. Such a change would require 
a change in law and is outside the scope of these regulations.

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 designated as a ``not significant regulatory 
action,'' under Executive Order 12866, and it is not ``economically 
significant'' as measured by the $100 million threshold.

Reducing Regulation and Controlling Regulatory Costs

    This rule is not an Executive Order 13771 regulatory action because 
this rule is not subject to Executive Order 12866.

Regulatory Flexibility Act

    OPM certifies that this rule will not have a significant economic 
impact on a substantial number of small entities.

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.

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

    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 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-

[[Page 65189]]

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;
    (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. 2020-22320 Filed 10-14-20; 8:45 am]
BILLING CODE 6325-39-P