Federal Salary Council Announce a Whopping 5% Increase in the Federal-Private Pay Gap to 27.54%, up from 22.5% in 2022
Yesterday, the Federal Salary Council (FSC)—charged with recommending federal employee locality pay system adjustments to the President’s Pay Agent—held a public hearing to vote on recommendations offered by the FSC Working Group regarding locality pay area adjustments for calendar year 2024. NFFE National President Randy Erwin is a presidentially appointed Member of the Federal Salary Council and Executive Director Steve Lenkart is a member of the FSC Working Group.
The FSC is an advisory committee that provides the President’s Pay Agent with recommendations on locality pay issues under the General Schedule pay system. The President’s Pay Agent is composed of the Secretary of Labor and the Directors of the Offices of Personnel Management (OPM) and Management and Budget (OMB). The President’s Pay Agent can accept or deny the recommendations of the FSC and likewise, the President can accept or deny the recommendations of the Pay Agent.
While the FSC makes regular changes to locality pay areas—mostly in the form of inclusions of areas the geographical border a higher pay area, NFFE and other members of the FSC remain frustrated that the requirements for inclusion or augmentation of pay areas does not reflect the rapidly increasing cost of living for many federal employees. For instance, the required minimum threshold of 2,500 affected employees or the three-year minimum for favorable data compilation automatically sets back federal employees in those areas by years or even decades.
Of all the rising costs that burden federal employees, none is more crushing than housing. Housing costs in urban areas always tick up at a steady rate, however more rural areas are seeing increases at extraordinary rates that force federal employees further out because federal wages cannot keep up with regional inflation in those areas. Recognizing the escalation of costs of living across the country, NFFE supports continuing exploration by the Working Group and the Bureau of Labor Statictics (BLS) to identify better options for addressing anomalous local and regional data within and outside of established pay areas.
During the public meeting, the FSC conducted the following business:
- Recognized that the current federal-private pay gap rose from 22.5% in 2022 to 27.54% in 2023 (+5.04%).
- Recognized the significant impact that the EX-IV pay cap level has on effective locality pay administration.
- Recommended adding Yuma County, AZ, to the Phoenix, AZ, locality pay area; and Wyandot County, OH, to the Columbus, OH, locality pay area.
- Recommended continuing statistical analyses with BLS to collect data to show prevailing policy on salary ranges and waiting periods for progression through those ranges.
- Recommended that the Working Group and BLS in 2024 identify options for addressing anomalous non-Federal salary estimates.
On a related note, OPM will issue a final rule on November 16, 2023, notifying the public that the Pay Agent accepted the recommendations of the FSC to include four new areas into locality pay areas in 2024: Fresno-Madera Hanford (CA), Reno-Fernley (NV), Rochester-Batavia-Seneca Falls (NY), and Spokane-Spokane Valley-Coeur d’Alene (WA).