I am pleased to announce that the U.S. Office of Personnel Management (OPM) has issued final regulations on pay administration rules for employees in “non-foreign areas,” which include Alaska, Hawaii, Guam, Puerto Rico, the Virgin Islands, and certain other areas listed in 5 CFR 591.205. Some of these regulations are necessary to address the effects of implementing the Non-Foreign Area Retirement and Equity Assurance Act of 2009, as contained in subtitle B of title XIX of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84, October 28, 2009). The regulations are available at http://www.opm.gov/cfr/fedregis.

The regulations provide for:

• Considering locality pay and non-foreign area cost-of-living allowances (COLAs) when evaluating the need for special rates;
• Computing special rate supplements using an alternate method in non-foreign areas;
• Authorizing OPM to establish separate special rate schedules that temporarily maintain higher special rates for current non-foreign area employees in a covered category;
• Considering locality rates as basic pay for the purpose of computing non-foreign area COLAs and post differentials;
• Allowing a retained rate established based on a special rate payable in a non-foreign area that is in excess of the applicable limitation on special rates on January 1, 2012, to exceed the rate payable for level IV of the Executive Schedule; and
• Allowing temporary and term employees in non-foreign areas to be eligible for a retained rate in certain circumstances.

For further information, employees should contact their agency’s human resources office.  If there are further questions or concerns, the appropriate headquarters-level agency human resources office may contact Pay and Leave at OPM at pay-leave-policy@opm.gov.  Requests from individual employees will be returned or forwarded to the appropriate agency human resources office.