Raises large enough to close the reported gap have never been paid due to the cost and methodology used to calculate it. Image: New Point Press/Shutterstock.com
By: FEDweek StaffFederal employees now lag private sector employees in comparable jobs in salary by 27.54 percent, according to the latest figures from the Federal Salary Council, up from the 24.09 percent it reported last autumn.
The overall pay gap number, based on Labor Department data, is passed on to a higher-level group, the President’s Pay Agent, which then makes recommendations to the White House on pay raises. Federal employee organizations and their supporters in Congress cite the number in arguing for larger raises, although raises large enough to close the reported gap have never been paid due to the potential cost and due to controversy over the methods used to calculate it.
The Pay Agent’s most recent report, issued in October, said that while the annual pay gap figures reflect the process required by law, that process has “lacked credibility since the beginning of locality pay in 1994 . . . The current pay comparison methodology used in the locality pay program ignores the fact that non-federal pay in a local labor market varies substantially between different occupational groups.”
The salary council also produces salary comparisons by GS locality, which are then used in allocating the among them the portion of the annual raise devoted to locality pay. For 2024, it again found that the gaps remain the largest in city areas where locality rates already are among the highest, including San Francisco-Oakland-Jan Jose, New York, Seattle, Washington, D.C. and Los Angeles. The gap remains the smallest in the lowest-paid, the catchall “rest of the U.S.” for areas outside city zones with their own pay rates.
While the January 2024 federal employee pay raise is not yet definite, it most likely will consist of a 4.7 percent across the board increase, with funds equivalent to another 0.5 percent raise divided up as locality pay. That would result in raises ranging from several tenths of a percentage point above 5.2 in the localities with the largest reported gaps to several tenths below 5.2 in the rest of the U.S. locality and others where the reported gaps are below the average.
Based on past recommendations, rules have been proposed to create new localities in the Fresno, Calif.; Reno, Nev.; Rochester, N.Y.; and Spokane, Wash., areas, and to expand the boundaries of most of the now-existing localities. That would provide an additional pay boost to some 33,000 employees by moving them from the rest of the U.S locality into an area with its own designated rate.
The recent Pay Agent report said those rules are expected to be finalized in time to be effective with the January 2024 raise. The salary council did not recommend creating any additional localities for 2025.
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