Locality Pay Areas
Under 5 U.S.C. 5304(e)(2)(A), the Federal Salary Council made a recommendation to the Pay Agent on the composition of locality pay areas for 2007. This recommendation was transmitted to the Pay Agent in a memorandum dated October 27, 2006. (See Appendix I.)
New Locality Pay Areas
The Council reviewed pay gaps for Austin, Buffalo, Louisville, Memphis, Phoenix, and Raleigh again this year. These data are from small-scale surveys BLS conducts as part of its data collection for the RUS locality pay area. While we asked BLS to expand the sample in these areas, they have not yet been able to do so. Because these are small-scale RUS surveys, the sample size is generally smaller than would be the case if BLS had conducted full-scale locality pay surveys in each of these areas. Pay Agent staff asked BLS to include these areas in a model with the existing locality pay areas and produce model-filled data files for review.
The pay gaps for these areas using the small-scale NCS surveys with model fills for missing jobs are shown in the table below.
Pay Gaps in Six New Areas
MSA means Metropolitan Statistical Area and CSA means Combined Statistical Area as defined by the Office of Management and Budget.
The Council concluded that we should keep the new Buffalo, Phoenix, and Raleigh locality pay areas just implemented last year, but that Austin, Memphis, and Louisville should remain in the RUS locality pay area. While the Louisville pay gap is 2.62 points above that for the RUS locality pay area, the Council noted that only 110 establishments were surveyed in Louisville and 91 percent of the data were modeled. The Council concluded we should continue to monitor Austin, Louisville, and Memphis as BLS continues with its survey redesign. We agree with the Council's recommendations.
The data for the RUS locality pay area used in this report include data from Austin, Buffalo, Louisville, and Memphis. The Pay Agent instructed BLS to continue to include these surveys in the RUS data until it completes implementation of its survey geographic redesign because each of these surveys represents other areas in BLS' sampling scheme. We have adjusted the RUS pay gap in a cost neutral fashion to net out Buffalo since it is now a separate locality pay area. The other three locations continue to be a part of the RUS area. BLS did not include data from Phoenix in the RUS data this year since Phoenix represented only itself in the BLS geographic design, and the Raleigh survey was cancelled when BLS' budget was reduced in 2004 and the Raleigh data are no longer in the RUS estimates. We used the old Raleigh data this year to calculate the Raleigh pay gap, appropriately aged. We encourage BLS to expedite renewal of its salary survey in the Raleigh area.
Defining Locality Pay Areas
The Federal Salary Council reviewed requests from Federal employees in 42 areas for changes in locality pay area boundaries or new locality pay areas. These requests included increasing locality rates in New Orleans and other areas affected by Hurricane Katrina; splitting the Los Angeles locality pay area; moving Yolo County, CA, from the Sacramento locality pay area to the San Jose-San Francisco locality pay area; and adding Berkshire County, MA, to the Hartford locality pay area. The Council recommended we not make any of the requested changes and we agree. The Council's recommendations are in Appendix I.
OMB made some revisions in CSA definitions in 2006 that affect the Dallas and Philadelphia CSAs. OMB also added the Providence, RI, area to the Boston CSA and the Greeley, Co, area to the Denver CSA. OPM regulations (5 CFR 531.609(d)) provide that areas added to a CSA or MSA by OMB will automatically be added to the corresponding locality pay area the following January. Based on the CSA changes, Grayson County, TX, will be added to the Dallas locality pay area, and Berks County, PA, will be added to the Philadelphia locality pay area in January 2007. The changes to the Boston and Denver CSAs do not affect locality pay area boundaries because the added locations are already included in the respective locality pay area. While these changes in pay area boundaries will occur automatically under existing regulations, OPM plans to provide appropriate notice of these changes and make corresponding changes in the official designations of Boston and Denver locality pay areas.
Locality Pay Areas for 2007
The Pay Agent intends to provide for the same locality pay areas in 2008 as in 2007:
Component counties of MSAs and CSAs are identified in OMB Bulletins available on the Internet at http://www.whitehouse.gov/omb/bulletins/index.html