A plan to replace the nonforeign area COLA system with locality pay would address a long-running complaint about that program from managers in affected areas, backers say, although that argument failed to win the day against a procedural issue when the Senate recently considered the matter.
Civil service leaders in the Senate attempted to add the provision to a tobacco policy bill also containing numerous federal benefit provisions. The idea has been pushed for years by the chair of the Senate federal workforce subcommittee, Sen. Daniel Akaka, D-Hawaii, who represents a large portion of the federal employees affected by the program. However, that provision and several others were deemed to be not germane to the underlying bill and the Senate did not let the amendment come to a vote. The House then quickly accepted the Senate’s version of the bill and sent it to the White House.
Sponsors say they will try again, deeming the issue a matter of fairness to employees and good management for the government. The non-foreign area COLA program pays special allowances of up to 25 percent in Hawaii, Alaska and certain territories and possessions outside the contiguous 48 states. While the COLA is not taxable, it doesn’t count toward retirement calculations, which has long been a sore point for managers in those locations who complain that employees late in their careers leave for jobs in the 48 states in order to boost their “high three” salary base—the San Francisco locality, which is the highest-paid locality, is an especially popular destination.
The bill would phase in a switchover during a three-year period with guarantees that employees would not come out behind financially. However, implementation could prove troublesome.
The measure effectively would require the Labor Department to undertake a major new initiative to gather and analyze salary data in those areas much as it does for the GS locality program in general. Labor has struggled for years to produce reliable locality pay data due to shortages of manpower and other resources for that purpose. For example, Labor no longer surveys Anchorage, Alaska, as part of a broader wage survey, and the Federal Salary Council said in a recent report that that survey would have to be reinstated if a pay reform passed. However, Labor told the council at a meeting last fall that it does not have the funds needed to conduct such a survey.