Locality Pay Raises Are Coming Next Month – Here’s What You Need to Know

Categories: Pay

There was good news and not-so-good news regarding the pay raise for 2016. The good news was that for the first time in six years, we finally got an increase in locality pay. In addition to a 1% across-the-board nationwide adjustment, federal employees will receive a locality increase between 0.1% and 0.6% depending on where they work.

Thirteen new localities were added this year, and all will receive slightly more than they would have if they’d remained in the Rest of U.S. locality. None of the locality increases was large.  Only 0.3% of payroll was devoted to locality increases. The President’s Pay Agent—consisting of the heads of the Labor Department, Office of Management and Budget and Office Personnel Management—rejected the recommendation of the Federal Salary Council, on which AFGE has two seats, regarding the formula for allocating locality increases. The method AFGE supported would have evened out the locality increases more than the formula that President Obama chose.  

But the expansion of the number of localities to 13 additional areas was a tremendous achievement. Even though those localities got extremely small locality increases this year, it is important to recognize that they’re now “in the game” and eligible for bigger increases in the future.

The not-so-good news was the size of the overall raise. At 1.3%, it is nowhere near enough to begin to make up lost ground for the three years of frozen pay followed by two years with 1% across-the-board increases and no additional locality pay. The average pay gap between the public and private sectors is 35%, and despite a law instructing Congress to close 95% of that gap, small pay adjustments have grown that gap rather than shrink it.  

Congress and the administration routinely tie themselves in knots trying to deny the accuracy of the pay gap measurement, but it is a solid calculation. The Federal Salary Council uses data from the Bureau of Labor Statistics (BLS), the highest quality data in the nation. The data matches salaries for jobs in the federal government to salaries for comparable jobs in the private sector and state and local government on a city-by-city basis. Closing that gap, as the law instructs the government to do, costs more than Congress wants to spend on federal employees, so year after year, depending on changes in non-federal pay, the gap either stays the same (when we get a decent adjustment) or grows (when our pay is frozen or adjusted by paltry sums like 1% or 1.3%). 

It will be up to AFGE members to mobilize support in Congress and a new administration for bigger and better pay raises in the future.


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