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

Pay Disparities And Comparability Payments

Table 3, below, lists the pay disparity for each pay locality. Table 3 also derives the recommended local comparability payments under 5 U.S.C. 5304(a)(3)(I) for 2010 based on the pay disparities, and it shows the disparities that would remain if the recommended payments were adopted.

The law requires comparability payments only in localities where the pay disparity exceeds 5 percent; the goal was to reduce local pay disparities to no more than 5 percent over a 9-year period (5 U.S.C. 5304(a)(3)(I)). The "Disparity to Close" shown in Table 3 represents the pay disparity to be closed in each area based on the 5 percent remaining disparity threshold. The "Locality Payment" shown in the table represents 100 percent of the disparity to close. The last column shows the pay disparity that would remain in each area if the indicated payments were made. For example, in Atlanta, the 48.21 percent pay disparity would be reduced to 5.00 percent if the locality rate were increased to 41.15 percent (148.21/141.15-1) X 100 = 5.00 percent).

The actual remaining pay disparity as of January 2010 may differ from the calculations for two reasons. First, Federal pay will have increased by the amount of the across-the-board increases that become effective in January 2009 and January 2010. Second, non-Federal pay will have increased by some amount from March 2008 to January 2010. For the purpose of this report, we assume that future changes in Federal and non-Federal pay will effectively cancel each other out and that the pay disparities will remain about the same.

Table 3.
Local Pay Disparities and 2009 Comparability Payments

Average Locality Rate

The average locality comparability rate in 2010, using the basic GS payroll as of March 2008 to weight the individual rates, would be 38.71 percent under the methodology used for this report (based on the disparity to close). The average rate authorized in 2008 was 18.17 percent. At this time, we do not know what locality rates will be approved for 2009. The locality rates included in this report would represent a 17.4 percent average pay increase over 2008 locality rates.

Overall Remaining Pay Disparities

The full pay disparities contained in this report average 45.64 percent using the basic GS payroll to weight the local pay disparities. However, this calculation excludes existing locality payments. When the existing locality payments (i.e., those paid in 2008) are included in the comparison, the overall remaining pay disparity as of March 2008 was (145.64/118.17-1) X 100, or about 23.25 percent. Table 4, below, shows the overall remaining pay disparity in each of the 32 approved locality pay areas as of March 2008.

Table 4.
Remaining Pay Disparities in 2008