‘Average’ Amount a Tricky Calculation

Blue-collar employees under the wage grade pay system-sometimes called the federal wage system-are supposed to be paid according to prevailing rates in their localities, the boundaries of which differ from those of the GS locality boundaries. However, under language that has been enacted for many years and that is again pending in Congress, wage grade employees have had their raises capped at the GS average amount. That is, they get the higher of the GS average amount or the amount indicted by local wage surveys. The GS average amount for that purpose works out to be slightly higher than the congressionally enacted GS average raise, for technical reasons: the GS raise is funded as if all GS employees were eligible for locality pay, when in fact employees outside the contiguous 48 states don’t get it. Thus, there is some additional funding available for those who do get GS locality pay, which translates into a GS average figure for determining the wage grade pay cap that is slightly higher than the number enacted.