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U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

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Presidents Pay Agent

The President's Pay Agent

Washington, DC
December 6, 2007


SUBJECT: Annual Report on General Schedule Locality-Based Comparability Payments

The law requires the President's Pay Agent to submit a report each year showing the locality-based comparability payments we would recommend for General Schedule employees in the following fiscal year if the adjustments were to be made in accordance with section 5304 of title 5, United States Code. In keeping with this statutory requirement, this report shows the adjustments that would be dictated for January 2009 if the methodology and rates required by current law were to be implemented. Given the current national emergency, however, we believe it would be unwise to allow the locality pay increases shown in this report to take effect in January 2009. You do not need to make a decision on the 2009 rates at this time.

Our plans for locality pay area boundaries in 2009 and our decisions on the methodology for comparing Federal and non-Federal rates of pay also are contained in this report. The development of these recommendations has been greatly facilitated by the thoughtful work of the Federal Salary Council.

We continue to believe in the need for fundamental reforms of the white-collar Federal pay system. As we have previously reported, the Pay Agent has serious concerns about the utility of a process that requires a single percentage adjustment in the pay of all white-collar civilian Federal employees in each locality pay area without regard to the differing labor markets for major occupational groups or the performance of individual employees. In addition, we continue to have major methodological concerns about the underlying model for estimating pay gaps, and will continue to address them in subsequent survey years.

Finally, we also continue to believe it is imperative to develop performance-sensitive compensation systems that will contribute to a Government that is more citizen-centered, results-oriented, and market-based. We prefer a new system that will empower Federal agencies to better manage, develop, and reward employees in order to better serve the American people.

The President's Pay Agent:

Elaine L. Chao
Secretary of Labor

James A. Nussle
Director, Office of
Management and Budget

Linda M. Springer
Director, Office of
Personnel Management