General Schedule Locality Pay Areas, 65607-65612 [2015-27380]

Download as PDF 65607 Rules and Regulations Federal Register Vol. 80, No. 207 Tuesday, October 27, 2015 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each week. OFFICE OF PERSONNEL MANAGEMENT 5 CFR Part 531 RIN 3206–AM88 General Schedule Locality Pay Areas Office of Personnel Management. ACTION: Final rule. AGENCY: The Office of Personnel Management is issuing final regulations on behalf of the President’s Pay Agent. These final regulations link the definitions of General Schedule (GS) locality pay area boundaries to updated metropolitan area definitions established by the Office of Management and Budget (OMB) in February 2013. These final regulations also establish 13 new locality pay areas, which the Federal Salary Council recommended after reviewing pay levels in all ‘‘Rest of U.S.’’ metropolitan statistical areas and combined statistical areas with 2,500 or more GS employees. DATES: The regulations are effective November 27, 2015. The regulations are applicable on the first day of the first pay period beginning on or after January 1, 2016. FOR FURTHER INFORMATION CONTACT: Joe Ratcliffe, (202) 606–2838; fax: (202) 606–0824; email: pay-leave-policy@ opm.gov. SUMMARY: Section 5304 of title 5, United States Code (U.S.C.), authorizes locality pay for General Schedule (GS) employees with duty stations in the United States and its territories and possessions. Section 5304(f) authorizes the President’s Pay Agent (the Secretary of Labor, the Director of the Office of Management and Budget (OMB), and the Director of the Office of Personnel Management (OPM)) to determine locality pay areas. The boundaries of locality pay areas tkelley on DSK3SPTVN1PROD with RULES SUPPLEMENTARY INFORMATION: VerDate Sep<11>2014 16:49 Oct 26, 2015 Jkt 238001 must be based on appropriate factors, which may include local labor market patterns, commuting patterns, and the practices of other employers. The Pay Agent must give thorough consideration to the views and recommendations of the Federal Salary Council, a body composed of experts in the fields of labor relations and pay policy and representatives of Federal employee organizations. The President appoints the members of the Federal Salary Council, which submits annual recommendations on the locality pay program to the Pay Agent. The establishment or modification of locality pay area boundaries must conform to the notice and comment provisions of the Administrative Procedure Act (5 U.S.C. 553). On June 1, 2015, OPM published a proposed rule in the Federal Register on behalf of the Pay Agent. (See 80 FR 30955.) The proposed rule proposed linking locality pay area definitions to metropolitan areas defined by OMB in February 2013, and proposed establishing 13 new locality pay areas: Albany-Schenectady, NY; AlbuquerqueSanta Fe-Las Vegas, NM; Austin-Round Rock, TX; Charlotte-Concord, NC–SC; Colorado Springs, CO; DavenportMoline, IA–IL; Harrisburg-Lebanon, PA; Kansas City-Overland Park-Kansas City, MO–KS; Laredo, TX; Las VegasHenderson, NV–AZ; Palm BayMelbourne-Titusville, FL; St. Louis-St. Charles-Farmington, MO–IL; and Tucson-Nogales, AZ. The proposed rule did not propose modifying the standard commuting and GS employment criteria used in the locality pay program to evaluate, as possible areas of application, locations adjacent to the metropolitan area comprising the basic locality pay area. (A basic locality pay area is an OMB-defined metropolitan area on which the definition of a locality pay area is based, and an area of application is a location that is not part of a basic locality pay area but is included in the locality pay area.) However, the proposed rule proposed using updated commuting patterns data to calculate commuting interchange rates to evaluate, as potential areas of application, locations adjacent to the metropolitan area comprising the basic locality pay area. The updated commuting patterns data used to calculate commuting interchange rates were collected as part of the American PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 Community Survey between 2006 and 2010. In January 2014, the Federal Salary Council recommended use of those commuting patterns data in order to calculate commuting interchange rates used in the locality pay program. (The commuting interchange rate is the sum of the percentage of employed residents of the area under consideration who work in the basic locality pay area and the percentage of the employment in the area under consideration that is accounted for by workers who reside in the basic locality pay area. The commuting interchange rate is calculated by including all workers in assessed locations, not just Federal employees.) The proposed rule provided a 30-day comment period. The Pay Agent reviewed comments received through July 1, 2015. After considering those comments, the Pay Agent has decided to implement the locality pay area definitions in the proposed rule, with three additional changes. Those changes, which are further discussed below, are a name change for one locality pay area; the addition of Berkshire County, MA, to the AlbanySchenectady, NY, locality pay area; and the addition of Harrison County, OH, to the Cleveland-Akron-Canton, OH, locality pay area. Based on questions OPM staff received on the definition of the ‘‘Harrisburg-York-Lebanon, PA’’ locality pay area defined in the proposed rule, the Pay Agent has decided to change the name of that locality pay area to ‘‘Harrisburg-Lebanon, PA.’’ The definition of the locality pay area remains the same as in the proposed rule, and the name change is intended to help clarify that York County, PA, is not included in the Harrisburg-Lebanon, PA, locality pay area. Before the name change, that locality pay area’s name was based on the name of the February 2013 Harrisburg-York-Lebanon, PA, Combined Statistical Area, the OMBdefined metropolitan area to which the definition of the Harrisburg-Lebanon, PA, locality pay area is linked. However, York County, PA, which has been an area of application to the Washington-Baltimore locality pay area since January 2005, will remain in the Washington-Baltimore-Arlington, DC– MD–VA–WV–PA, locality pay area. In the proposed rule, the Pay Agent invited comment on how to address E:\FR\FM\27OCR1.SGM 27OCR1 tkelley on DSK3SPTVN1PROD with RULES 65608 Federal Register / Vol. 80, No. 207 / Tuesday, October 27, 2015 / Rules and Regulations ‘‘Rest of U.S.’’ locations that are almost but not completely surrounded by potentially higher-paying locality pay areas. After considering comments received, the Pay Agent has decided to include, as areas of application, Berkshire County, MA, in the AlbanySchenectady, NY, locality pay area and Harrison County, OH, in the ClevelandAkron-Canton, OH, locality pay area. While not completely surrounded by potentially higher-paying locality pay areas, each of those two counties is bordered by three separate locality pay areas. This action includes Berkshire County, MA, and Harrison County, OH, in an adjacent locality pay area with which each county has the highest commuting interchange rate. This policy is consistent with the Pay Agent’s treatment, in the proposed rule and under these final regulations, of completely surrounded locations. Berkshire County, MA, and Harrison County, OH, if left in the ‘‘Rest of U.S.’’ locality pay area, would each have a land boundary more than 75 percent bordered by three separate locality pay areas. In addition, Berkshire and Harrison Counties each have commuting interchange rates, with the three locality pay areas they border, that sum to more than 7.5 percent. (The Pay Agent notes that the two completely surrounded locations included in separate locality pay areas under these final regulations—Kent County, MD, which will be included in the WashingtonBaltimore-Arlington, DC–MD–VA–WV– PA, locality pay area, and Lancaster County, PA, which will be included in the Harrisburg-Lebanon, PA, locality pay area—also have significant commuting interchange rates. Kent and Lancaster Counties each have commuting interchange rates of more than 7.5 percent with the locality pay area to which they will become areas of application under these final regulations.) In analyzing counties almost but not completely surrounded by separate locality pay areas under the locality pay area definitions proposed in the proposed rule, the Pay Agent also considered the driving distance by road between an evaluated county’s most populous duty station, in terms of GS employment, and the most populous duty station, in terms of GS employment, in the closest county within the adjacent locality pay area with the highest commuting interchange rate. (Driving distances and commuting interchange rates served different purposes in the analysis of locations almost but not completely surrounded by potentially higher-paying locality pay areas. While commuting VerDate Sep<11>2014 16:49 Oct 26, 2015 Jkt 238001 interchange rates were used to indicate the extent to which a location is part of each adjacent locality pay area’s local labor market, driving distances were considered as an indicator of the potential for GS employees to commute to a higher-paying locality pay area.) For both Berkshire County, MA, and Harrison County, OH, the driving distance is less than 50 miles between the county’s most populous duty station, in terms of GS employment, and the most populous duty station, in terms of GS employment, in the closest county within the adjacent locality pay area with the highest commuting interchange rate. The Pay Agent does not believe that a ‘‘Rest of U.S.’’ county being mostly bordered by separate locality pay areas necessarily warrants action unless there is evidence of a substantial labor market linkage with one or more neighboring locality pay areas. However, the Pay Agent believes the aforementioned information on commuting and driving distances for Berkshire County, MA, and Harrison County, OH, when considered along with the extent to which each of these counties is bordered by three separate locality pay areas, does warrant action. The other single-county ‘‘Rest of U.S.’’ locations bordered by three separate locality pay areas have a smaller percentage of land boundary bordered by separate locality pay areas and/or have lesser commuting or greater driving distances to the adjacent locality pay areas. (No single-county ‘‘Rest of U.S.’’ locations are bordered by more than three separate locality pay areas.) Individuals concerned about agency recruitment or retention capabilities in locations bordered by multiple separate locality pay areas and remaining in the ‘‘Rest of U.S.’’ locality pay area under these final regulations may provide testimony to the Federal Salary Council on locations of concern. Impact and Implementation Using February 2013 OMB-defined metropolitan area definitions as the basis for locality pay area boundaries and using updated commuting patterns data to evaluate potential areas of application will add a number of counties now included in the ‘‘Rest of U.S.’’ locality pay area to separate locality pay areas, which will impact about 6,300 GS employees. Establishing 13 new locality pay areas will impact about 102,000 GS employees. Implementing the 13 new locality pay areas will not automatically change locality pay rates now applicable in those areas because locality pay percentages are established by Executive order under the President’s authority in PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 5 U.S.C. 5304 or 5304a, and the President decides each year whether to adjust locality pay percentages. When locality pay percentages are increased, past practice has been to allocate a percent of the total GS payroll for locality raises and to have the overall dollar cost for such pay raises be the same, regardless of the number of locality pay areas. If a percent of the total GS payroll is allocated for locality pay increases, the addition of new areas could result in a smaller amount to allocate for locality pay increases in existing areas. Implementing higher locality pay rates in the 13 new locality pay areas could thus result in relatively lower pay increases for employees in existing locality pay areas than they would otherwise receive. Comments on the Proposed Rule OPM received 707 comments on the proposed rule. Most commenters supported the proposed changes in the definitions of locality pay areas. Many commenters expressed the belief that various indicators of living costs should be considered in defining locality pay areas or in setting locality pay. Living costs are not directly considered in the locality pay program. Locality pay is not designed to equalize living standards for GS employees across the country. Under 5 U.S.C. 5304, locality pay rates are based on comparisons of GS pay and non-Federal pay at the same work levels in a locality pay area. Relative living costs may indirectly affect non-Federal pay levels, but living costs are just one of many factors that affect the supply of and demand for labor, and therefore labor costs, in a locality pay area. Some commenters disagreed it is appropriate to establish 13 new locality pay areas. A number of those commenters expressed concern that existing locality pay areas’ future pay levels could be set lower than they otherwise would, due to establishment of new locality pay areas. The President’s Pay Agent continues to believe it is appropriate to establish the 13 new locality pay areas. The goal of the locality pay program is to reduce disparities between GS pay and nonFederal pay for the same levels of work in locations where such disparities are significant. The Federal Salary Council recommended the 13 new locality pay areas after reviewing pay levels in all ‘‘Rest of U.S.’’ metropolitan statistical areas and combined statistical areas with 2,500 or more GS employees. The Federal Salary Council found that the percentage difference between GS and non-Federal pay levels for the same levels of work—i.e., the pay disparity— E:\FR\FM\27OCR1.SGM 27OCR1 tkelley on DSK3SPTVN1PROD with RULES Federal Register / Vol. 80, No. 207 / Tuesday, October 27, 2015 / Rules and Regulations in these 13 locations was substantially greater than the ‘‘Rest of U.S.’’ pay disparity over an extended period. Because pay disparities calculated for the ‘‘Rest of U.S.’’ locality pay area are based on average pay across many metropolitan areas throughout the United States with varying pay levels, and because pay in those metropolitan areas can change over time, the Pay Agent believes it is appropriate to monitor pay levels in ‘‘Rest of U.S.’’ metropolitan areas to the extent it is feasible to do so. When such monitoring reveals that a metropolitan area has a pay disparity significantly exceeding the overall ‘‘Rest of U.S.’’ pay disparity over an extended period, the Pay Agent believes it is appropriate to establish the metropolitan area as a separate locality pay area. Some commenters disagreed it is appropriate to use February 2013 OMBdefined metropolitan areas to define locality pay areas. Some of those commenters made living-cost comparisons between different portions of the February 2013 OMB metropolitan areas, e.g., comparisons between the central and outlying portions of those metropolitan areas. Some commenters expressed concern that future locality pay levels might be set lower than they otherwise would due to including certain portions of a metropolitan area, such as its outlying locations, in a locality pay area. Some commenters suggested splitting OMB-defined metropolitan areas into separate locality pay areas so that some locations in a metropolitan area could receive higher pay rates than other locations within the metropolitan area. Prior to implementation of locality pay, the Federal Salary Council recommended, and the Pay Agent approved, the use of OMB-defined metropolitan areas as the basis for locality pay area boundaries, and OMBdefined metropolitan areas have been the basis for locality pay area boundaries since locality pay was implemented in 1994. (A detailed history of the use of OMB-defined metropolitan areas in the locality pay program can be found in the Federal Salary Council’s January 2014 recommendations, which are posted on the OPM Web site at https:// www.opm.gov/policy-data-oversight/ pay-leave/pay-systems/generalschedule/federal-salary-council/ recommendation13.pdf.) The Pay Agent continues to believe it is appropriate to use OMB-defined metropolitan areas as the basis for locality pay area boundaries and has no evidence that it is appropriate to split an OMB-defined metropolitan area into VerDate Sep<11>2014 16:49 Oct 26, 2015 Jkt 238001 separate locality pay areas. Since OMBdefined metropolitan areas will continue to serve as the basis for locality pay area boundaries, the Pay Agent believes it makes sense to update the metropolitan areas used in the locality pay program to the February 2013 OMBdefined metropolitan areas, since the definitions of those metropolitan areas reflect the most recent information on population distribution and commuting patterns. Departing from the practice of defining basic locality pay areas based on OMB-defined metropolitan areas or splitting those metropolitan areas into separate locality pay areas would be a significant change, and the implications would have to be carefully considered. Individuals interested in recommending alternatives to defining basic locality pay areas based on entire OMB-defined metropolitan areas may provide testimony to the Federal Salary Council. Some commenters disagreed it is appropriate to establish new areas of application or maintain existing ones, with some commenters expressing concern that future locality pay levels could be set lower than they otherwise would due to including new areas of application in locality pay areas. Prior to implementation of locality pay, the Federal Salary Council recommended, and the Pay Agent agreed, that OMBdefined metropolitan areas not be the sole basis for defining locality pay areas. Ever since locality pay was implemented in 1994, criteria have been used in the locality pay program to evaluate, as potential areas of application, locations adjacent to the metropolitan area comprising the basic locality pay area. The Pay Agent continues to believe it is appropriate to establish areas of application when approved criteria for doing so are met. Some commenters disagreed it is appropriate to retain, in their current locality pay area, locations that would otherwise move to a potentially lowerpaying locality pay area as a result of using February 2013 OMB-defined metropolitan areas as the basis for locality pay area boundaries. The Pay Agent continues to believe it is appropriate to retain such locations in their current locality pay area. If such a location were moved to a lower-paying locality pay area, current GS employees in the location might be entitled to pay retention under 5 U.S.C. 5363 and 5 CFR part 536 and would not have a reduction in pay. GS employees hired after movement of the location to the lower-paying locality pay area would not be entitled to pay retention and would receive the lower locality pay rates that would be applicable in the location. The Pay Agent believes such PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 65609 an outcome would be disruptive for agencies and employees in affected locations. A number of commenters objected that locations not included in a separate locality pay area were to remain in the ‘‘Rest of U.S.’’ locality pay area under the proposed rule. Some of those locations are metropolitan areas for which the Federal Salary Council has studied disparities between non-Federal pay and Federal pay (pay disparities) over several years of data and found that the pay disparities do not significantly exceed the pay disparity for the ‘‘Rest of U.S.’’ locality pay area over the same period. Other locations referred to in this category of comments do not meet the criteria for areas of application. In some cases, commenters cited possible recruitment and retention difficulties the commenters believe agencies may have in certain locations that would remain in the ‘‘Rest of U.S.’’ locality pay area when these final regulations are put into effect. The Pay Agent has no evidence that the changes these final regulations will make in locality pay area definitions will create recruitment and retention challenges for Federal employers. However, should recruitment and retention challenges exist in a location, Federal agencies have considerable administrative authority to address those challenges through the use of current pay flexibilities. Information on these flexibilities is posted on the OPM Web site at http://www.opm.gov/policy-dataoversight/pay-leave/pay-and-leaveflexibilities-for-recruitment-andretention. A number of commenters expressed their views on pay levels in locality pay areas. Some commenters suggested specific locality pay percentages to apply to new or existing locality pay areas, and some commenters offered opinions on the extent to which pay increases are needed in some locality pay areas compared to others. Such comments as these are outside of the scope of these final regulations. The purpose of these final regulations is to define the boundaries of locality pay areas. The role of the Pay Agent with regard to locality pay percentages is to report annually to the President what locality pay percentages would go into effect under the Federal Employees Pay Comparability Act of 1990. The President establishes a base General Schedule and sets locality pay percentages each year by Executive order. Some commenters expressed concern that certain Federal pay systems outside of the General Schedule would not benefit from the changes planned for E:\FR\FM\27OCR1.SGM 27OCR1 tkelley on DSK3SPTVN1PROD with RULES 65610 Federal Register / Vol. 80, No. 207 / Tuesday, October 27, 2015 / Rules and Regulations definitions of GS locality pay areas. Other commenters suggested that Federal retirees should receive increased retirement payments if, before they retired, they worked in a ‘‘Rest of U.S.’’ duty station that will now be included in a higher-paying locality pay area. Such comments as these are outside of the scope of these final regulations. The purpose of these final regulations is to define locality pay areas for current Federal employees who receive locality pay under 5 U.S.C. 5304, not to set pay levels for Federal employees who do not receive locality pay under 5 U.S.C. 5304 or to determine retirement payments. A number of comments reflected misunderstanding of the proposed rule’s definitions of locality pay areas, with some comments indicating a belief that certain counties actually included in a proposed locality pay area were excluded. The definitions of locality pay areas are based on combined statistical areas (CSAs) and metropolitan statistical areas (MSAs). Because over time counties can be added to CSAs and MSAs, and because the Pay Agent wanted any such changes in CSAs and MSAs to be reflected automatically in the definitions of locality pay areas, rather than list every county in each locality pay area, these final regulations will define locality pay areas by listing the CSA and MSA comprising the basic locality pay area, with areas of application listed as single counties. These final regulations define CSA as the geographic scope of a CSA, as defined in OMB Bulletin No. 13–01, plus any areas subsequently added to the CSA by OMB, and define MSA as the geographic scope of an MSA, as defined in OMB Bulletin No. 13–01, plus any areas subsequently added to the MSA by OMB. (OMB Bulletin 13–01 can be found at https:// www.whitehouse.gov/sites/default/files/ omb/bulletins/2013/b-13-01.pdf.) A number of comments concerned locations which, under the locality pay area definitions in the proposed rule, would remain in the ‘‘Rest of U.S.’’ locality pay area and be bordered by multiple locality pay areas. For the reasons discussed above in the ‘‘Supplementary Information’’ section of this final rule, after evaluating singlecounty locations bordered by multiple locality pay areas, the Pay Agent has decided to include, as areas of application, Berkshire County, MA, in the Albany-Schenectady, NY, locality pay area and Harrison County, OH, in the Cleveland-Akron-Canton, OH, locality pay area. Individuals concerned about locations that are bordered by multiple separate locality pay areas and VerDate Sep<11>2014 16:49 Oct 26, 2015 Jkt 238001 remain in the ‘‘Rest of U.S.’’ locality pay area, under the locality pay area definitions implemented by these final regulations, may provide testimony to the Federal Salary Council on locations of concern. Several commenters expressed concern that U.S. counties that are isolated off the coast of the U.S. mainland, and which do not meet criteria for areas of application, remain in the ‘‘Rest of U.S.’’ locality pay area under the changes these regulations will make in the definitions of locality pay areas. Some of these comments anecdotally referred to recruitment and retention challenges the commenters attributed to the locations being limited to ‘‘Rest of U.S.’’ locality pay. Federal agencies have considerable discretionary authority to provide pay and leave flexibilities to address significant recruitment and retention challenges, and information on these flexibilities is posted on the OPM Web site at http://www.opm.gov/policy-dataoversight/pay-leave/pay-and-leaveflexibilities-for-recruitment-andretention. One commenter opposed any movement of ‘‘Rest of U.S.’’ locations to separate pay areas, and said the Government should find less costly alternatives, such as moving Federal employment sites to areas with lower living or labor costs and increasing the use of telework. The Pay Agent does not believe that the need to vary pay levels geographically based on labor costs can be substantially reduced in the near term by relocating Government agencies’ duty stations or expanding telework programs. In addition, such a comment is outside the scope of these final regulations. The purpose of these regulations is to establish locality pay area boundaries the Pay Agent has determined to be appropriate. One commenter suggested that adjacent locality pay areas be combined into single locality pay areas, with resultant cost savings to the Government. Such a change would be a significant departure from current practices in the locality pay program and could have significant implications. The implications for adjacent locality pay areas are unknown and would have to be carefully considered. Individuals interested in pursuing this idea may provide testimony to the Federal Salary Council. Some comments reflected a mistaken belief that the calculation of commuting interchange rates in the locality pay program includes only commuting by Federal employees, rather than commuting by all types of workers in assessed locations. Some commenters PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 expressed the opinion that commuting interchange rates including only commuting for Federal employees should be considered in defining locality pay areas. In evaluating locations adjacent to basic locality pay areas as potential areas of application, commuting by all types of workers, not just Federal employees, is used as a criterion. Commuting interchange rates used in the locality pay program are a measure of economic linkage between a basic locality pay area and an adjacent location. Commuting interchange rates used in the locality pay program are used to indicate the extent to which a location is part of the locality pay area’s entire local labor market, not to indicate the extent to which Federal employees commute between locations. Executive Order 13563 and Executive Order 12866 OMB has reviewed this rule in accordance with E.O. 13563 and E.O. 12866. Regulatory Flexibility Act I certify that these regulations would not have a significant economic impact on a substantial number of small entities because they would apply only to Federal agencies and employees. List of Subjects in 5 CFR Part 531 Government employees, Law enforcement officers, Wages. Office of Personnel Management. Beth F. Cobert, Acting Director. Accordingly, OPM is amending 5 CFR part 531 as follows: PART 531—PAY UNDER THE GENERAL SCHEDULE 1. The authority citation for part 531 continues to read as follows: ■ Authority: 5 U.S.C. 5115, 5307, and 5338; sec. 4 of Pub. L. 103–89, 107 Stat. 981; and E.O. 12748, 56 FR 4521, 3 CFR, 1991 Comp., p. 316; Subpart B also issued under 5 U.S.C. 5303(g), 5305, 5333, 5334(a) and (b), and 7701(b)(2); Subpart D also issued under 5 U.S.C. 5335 and 7701(b)(2); Subpart E also issued under 5 U.S.C. 5336; Subpart F also issued under 5 U.S.C. 5304, 5305, and 5941(a), E.O. 12883, 58 FR 63281, 3 CFR, 1993 Comp., p. 682 and E.O. 13106, 63 FR 68151, 3 CFR, 1998 Comp., p. 224. Subpart F—Locality-Based Comparability Payments 2. In § 531.602, the definitions of CSA and MSA are revised to read as follows: ■ § 531.602 Definitions. * * E:\FR\FM\27OCR1.SGM * 27OCR1 * * Federal Register / Vol. 80, No. 207 / Tuesday, October 27, 2015 / Rules and Regulations CSA means the geographic scope of a Combined Statistical Area, as defined by the Office of Management and Budget (OMB) in OMB Bulletin No. 13–01, plus any areas subsequently added to the CSA by OMB. * * * * * MSA means the geographic scope of a Metropolitan Statistical Area, as defined by the Office of Management and Budget (OMB) in OMB Bulletin No. 13– 01, plus any areas subsequently added to the MSA by OMB. * * * * * ■ 3. In § 531.603, paragraph (b) is revised to read as follows: § 531.603 Locality pay areas. tkelley on DSK3SPTVN1PROD with RULES * * * * * (b) The following are locality pay areas for the purposes of this subpart: (1) Alaska—consisting of the State of Alaska; (2) Albany-Schenectady, NY— consisting of the Albany-Schenectady, NY CSA and also including Berkshire County, MA; (3) Albuquerque-Santa Fe-Las Vegas, NM—consisting of the AlbuquerqueSanta Fe-Las Vegas, NM CSA; (4) Atlanta—Athens-Clarke County— Sandy Springs, GA–AL—consisting of the Atlanta—Athens-Clarke County— Sandy Springs, GA CSA and also including Chambers County, AL; (5) Austin-Round Rock, TX— consisting of the Austin-Round Rock, TX MSA; (6) Boston-Worcester-Providence, MA–RI–NH–CT–ME—consisting of the Boston-Worcester-Providence, MA–RI– NH–CT CSA, except for Windham County, CT, and also including Androscoggin County, ME, Cumberland County, ME, Sagadahoc County, ME, and York County, ME; (7) Buffalo-Cheektowaga, NY— consisting of the Buffalo-Cheektowaga, NY CSA; (8) Charlotte-Concord, NC–SC— consisting of the Charlotte-Concord, NC–SC CSA; (9) Chicago-Naperville, IL–IN–WI— consisting of the Chicago-Naperville, IL–IN–WI CSA; (10) Cincinnati-WilmingtonMaysville, OH–KY–IN—consisting of the Cincinnati-Wilmington-Maysville, OH–KY–IN CSA and also including Franklin County, IN; (11) Cleveland-Akron-Canton, OH— consisting of the Cleveland-AkronCanton, OH CSA and also including Harrison County, OH; (12) Colorado Springs, CO—consisting of the Colorado Springs, CO MSA and also including Fremont County, CO, and Pueblo County, CO; VerDate Sep<11>2014 16:49 Oct 26, 2015 Jkt 238001 (13) Columbus-Marion-Zanesville, OH—consisting of the ColumbusMarion-Zanesville, OH CSA; (14) Dallas-Fort Worth, TX–OK— consisting of the Dallas-Fort Worth, TX– OK CSA and also including Delta County, TX, and Fannin County, TX; (15) Davenport-Moline, IA–IL— consisting of the Davenport-Moline, IA– IL CSA; (16) Dayton-Springfield-Sidney, OH— consisting of the Dayton-SpringfieldSidney, OH CSA and also including Preble County, OH; (17) Denver-Aurora, CO—consisting of the Denver-Aurora, CO CSA and also including Larimer County, CO; (18) Detroit-Warren-Ann Arbor, MI— consisting of the Detroit-Warren-Ann Arbor, MI CSA; (19) Harrisburg-Lebanon, PA— consisting of the Harrisburg-YorkLebanon, PA CSA, except for Adams County, PA, and York County, PA, and also including Lancaster County, PA; (20) Hartford-West Hartford, CT– MA—consisting of the Hartford-West Hartford, CT CSA and also including Windham County, CT, Franklin County, MA, Hampden County, MA, and Hampshire County, MA; (21) Hawaii—consisting of the State of Hawaii; (22) Houston-The Woodlands, TX— consisting of the Houston-The Woodlands, TX CSA and also including San Jacinto County, TX; (23) Huntsville-Decatur-Albertville, AL—consisting of the HuntsvilleDecatur-Albertville, AL CSA; (24) Indianapolis-Carmel-Muncie, IN—consisting of the IndianapolisCarmel-Muncie, IN CSA and also including Grant County, IN; (25) Kansas City-Overland ParkKansas City, MO–KS—consisting of the Kansas City-Overland Park-Kansas City, MO–KS CSA and also including Jackson County, KS, Jefferson County, KS, Osage County, KS, Shawnee County, KS, and Wabaunsee County, KS; (26) Laredo, TX—consisting of the Laredo, TX MSA; (27) Las Vegas-Henderson, NV–AZ— consisting of the Las Vegas-Henderson, NV–AZ CSA; (28) Los Angeles-Long Beach, CA— consisting of the Los Angeles-Long Beach, CA CSA and also including Kern County, CA, and Santa Barbara County, CA; (29) Miami-Fort Lauderdale-Port St. Lucie, FL—consisting of the Miami-Fort Lauderdale-Port St. Lucie, FL CSA and also including Monroe County, FL; (30) Milwaukee-Racine-Waukesha, WI—consisting of the MilwaukeeRacine-Waukesha, WI CSA; PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 65611 (31) Minneapolis-St. Paul, MN–WI— consisting of the Minneapolis-St. Paul, MN–WI CSA; (32) New York-Newark, NY–NJ–CT– PA—consisting of the New YorkNewark, NY–NJ–CT–PA CSA and also including all of Joint Base McGuire-DixLakehurst; (33) Palm Bay-Melbourne-Titusville, FL—consisting of the Palm BayMelbourne-Titusville, FL MSA; (34) Philadelphia-Reading-Camden, PA–NJ–DE–MD—consisting of the Philadelphia-Reading-Camden, PA–NJ– DE–MD CSA, except for Joint Base McGuire-Dix-Lakehurst; (35) Phoenix-Mesa-Scottsdale, AZ— consisting of the Phoenix-MesaScottsdale, AZ MSA; (36) Pittsburgh-New Castle-Weirton, PA–OH–WV—consisting of the Pittsburgh-New Castle-Weirton, PA– OH–WV CSA; (37) Portland-Vancouver-Salem, OR– WA—consisting of the PortlandVancouver-Salem, OR–WA CSA; (38) Raleigh-Durham-Chapel Hill, NC—consisting of the Raleigh-DurhamChapel Hill, NC CSA and also including Cumberland County, NC, Hoke County, NC, Robeson County, NC, Scotland County, NC, and Wayne County, NC; (39) Richmond, VA—consisting of the Richmond, VA MSA and also including Cumberland County, VA, King and Queen County, VA, and Louisa County, VA; (40) Sacramento-Roseville, CA–NV— consisting of the Sacramento-Roseville, CA CSA and also including Carson City, NV, and Douglas County, NV; (41) San Diego-Carlsbad, CA— consisting of the San Diego-Carlsbad, CA MSA; (42) San Jose-San Francisco-Oakland, CA—consisting of the San Jose-San Francisco-Oakland, CA CSA and also including Monterey County, CA; (43) Seattle-Tacoma, WA—consisting of the Seattle-Tacoma, WA CSA and also including Whatcom County, WA; (44) St. Louis-St. Charles-Farmington, MO–IL—consisting of the St. Louis-St. Charles-Farmington, MO–IL CSA; (45) Tucson-Nogales, AZ—consisting of the Tucson-Nogales, AZ CSA and also including Cochise County, AZ; (46) Washington-Baltimore-Arlington, DC–MD–VA–WV–PA—consisting of the Washington-Baltimore-Arlington, DC– MD–VA–WV–PA CSA and also including Kent County, MD, Adams County, PA, York County, PA, King George County, VA, and Morgan County, WV; and (47) Rest of U.S.—consisting of those portions of the United States and its territories and possessions as listed in 5 E:\FR\FM\27OCR1.SGM 27OCR1 65612 Federal Register / Vol. 80, No. 207 / Tuesday, October 27, 2015 / Rules and Regulations CFR 591.205 not located within another locality pay area. [FR Doc. 2015–27380 Filed 10–26–15; 8:45 am] BILLING CODE 6325–39–P FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 390 RIN 3064–AE19 Removal of Transferred OTS Regulations Regarding Electronic Operations Federal Deposit Insurance Corporation. ACTION: Final rule. AGENCY: The Federal Deposit Insurance Corporation (‘‘FDIC’’) is adopting a final rule to rescind and remove from the Code of Federal Regulations the transferred regulation entitled ‘‘Electronic Operations.’’ This regulation was included in the regulations that were transferred to the FDIC from the Office of Thrift Supervision (‘‘OTS’’) on July 21, 2011, in connection with the implementation of applicable provisions of title III of the Dodd-Frank Wall Street Reform and Consumer Protection Act (‘‘Dodd-Frank Act’’). There is no corresponding FDIC Electronic Operations rule and the rule is deemed obsolete, unnecessary, and burdensome. Therefore, the FDIC has decided to rescind and remove the regulation in its entirety. DATES: The final rule is effective on November 27, 2015. FOR FURTHER INFORMATION CONTACT: Jennifer Maree, Legal Division, (202) 898–6543; Frederick Coleman, Division of Risk Management Supervision, (703) 254–0452. SUPPLEMENTARY INFORMATION: SUMMARY: I. Background tkelley on DSK3SPTVN1PROD with RULES A. The Dodd-Frank Act Title III of the Dodd-Frank Act 1 provided for a substantial reorganization of the regulation of State and Federal savings associations and their holding companies. Beginning July 21, 2011, the transfer date established by section 311 of the Dodd-Frank Act, codified at 12 U.S.C. 5411, the powers, duties, and functions formerly performed by the OTS were divided among the FDIC, as to State savings associations, the Office of the Comptroller of the Currency (‘‘OCC’’), as to Federal savings 1 Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111–203, 124 Stat. 1376 (2010). VerDate Sep<11>2014 16:49 Oct 26, 2015 Jkt 238001 associations, and the Board of Governors of the Federal Reserve System (‘‘FRB’’), as to savings and loan holding companies. Section 316(b) of the Dodd-Frank Act, codified at 12 U.S.C. 5414(b), provides the manner of treatment for all orders, resolutions, determinations, regulations, and advisory materials that had been issued, made, prescribed, or allowed to become effective by the OTS. The section provides that if such materials were in effect on the day before the transfer date, they continue to be in effect and are enforceable by or against the appropriate successor agency until they are modified, terminated, set aside, or superseded in accordance with applicable law by such successor agency, by any court of competent jurisdiction, or by operation of law. Section 316(c) of the Dodd-Frank Act, codified at 12 U.S.C. 5414(c), further directed the FDIC and the OCC to consult with one another and to publish a list of the continued OTS regulations which would be enforced by the FDIC and the OCC, respectively. On June 14, 2011, the FDIC’s Board of Directors approved a ‘‘List of OTS Regulations to be Enforced by the OCC and the FDIC Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act.’’ This list was published by the FDIC and the OCC as a Joint Notice in the Federal Register on July 6, 2011.2 Although section 312(b)(2)(B)(i)(II) of the Dodd-Frank Act, codified at 12 U.S.C. 5412(b)(2)(B)(i)(II), granted the OCC rulemaking authority relating to both State and Federal savings associations, nothing in the Dodd-Frank Act affected the FDIC’s existing authority to issue regulations under the Federal Deposit Insurance Act (‘‘FDI Act’’) and other laws as the ‘‘appropriate Federal banking agency’’ or under similar statutory terminology. Section 312(c) of the Dodd-Frank Act amended the definition of ‘‘appropriate Federal banking agency’’ contained in section 3(q) of the FDI Act, 12 U.S.C. 1813(q), to add State savings associations to the list of entities for which the FDIC is designated as the ‘‘appropriate Federal banking agency.’’ As a result, when the FDIC acts as the designated ‘‘appropriate Federal banking agency’’ (or under similar terminology) for State savings associations, as it does here, the FDIC is authorized to issue, modify and rescind regulations involving such associations, as well as for State nonmember banks and insured branches of foreign banks. As noted, on June 14, 2011, pursuant to this authority, the FDIC’s Board of Directors reissued and redesignated certain transferring OTS regulations. These transferred OTS regulations were published as new FDIC regulations in the Federal Register on August 5, 2011.3 When it republished the transferred OTS regulations as new FDIC regulations, the FDIC specifically noted that its staff would evaluate the transferred OTS rules and might later recommend incorporating the transferred OTS regulations into other FDIC rules, amending them, or rescinding them, as appropriate. One of the OTS rules transferred to the FDIC requires State savings associations to notify the FDIC at least 30 days before establishing a transactional Web site. The OTS rule, formerly found at 12 CFR part 555, subpart B (‘‘part 555, subpart B’’), was transferred to the FDIC with only technical changes and is now found in the FDIC’s rules at 12 CFR part 390, subpart L (‘‘part 390, subpart L’’), entitled ‘‘Electronic Operations.’’ The FDIC has no such corresponding rule. After careful review of part 390, subpart L, the FDIC has decided to rescind part 390, subpart L, in its entirety, because, as discussed below, it is obsolete, unnecessary, and burdensome. II. Proposed Rule A. Removal of Part 390, Subpart L (Former OTS Part 555, Subpart B) On July 21, 2014, the FDIC published a Notice of Proposed Rulemaking (‘‘Proposed Rule’’) regarding the removal of part 390, subpart L, which governs electronic operations of State savings associations.4 The Proposed Rule would have removed part 390, subpart L, from the CFR in an effort to streamline FDIC regulations for all FDIC-supervised institutions. As discussed in the Proposed Rule, the FDIC carefully reviewed the transferred rule, part 390, subpart L, and determined that it should be rescinded because it is obsolete, unnecessary, and burdensome. III. Comments The FDIC issued the Proposed Rule with a 60-day comment period, which closed on September 19, 2014. No comments on the Proposed Rule were received by the FDIC. Consequently, the final rule (‘‘Final Rule’’) is adopted as proposed without any changes. IV. Explanation of the Final Rule As discussed in the Proposed Rule, the OTS enacted the Electronic Operations rule, part 390, subpart L, 3 76 2 76 PO 00000 FR 39247 (July 6, 2011). Frm 00006 Fmt 4700 Sfmt 4700 4 79 E:\FR\FM\27OCR1.SGM FR 47652 (Aug. 5, 2011). FR 42231 (July 21, 2014). 27OCR1

Agencies

[Federal Register Volume 80, Number 207 (Tuesday, October 27, 2015)]
[Rules and Regulations]
[Pages 65607-65612]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-27380]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
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Federal Register / Vol. 80, No. 207 / Tuesday, October 27, 2015 / 
Rules and Regulations

[[Page 65607]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 531

RIN 3206-AM88


General Schedule Locality Pay Areas

AGENCY: Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management is issuing final 
regulations on behalf of the President's Pay Agent. These final 
regulations link the definitions of General Schedule (GS) locality pay 
area boundaries to updated metropolitan area definitions established by 
the Office of Management and Budget (OMB) in February 2013. These final 
regulations also establish 13 new locality pay areas, which the Federal 
Salary Council recommended after reviewing pay levels in all ``Rest of 
U.S.'' metropolitan statistical areas and combined statistical areas 
with 2,500 or more GS employees.

DATES: The regulations are effective November 27, 2015. The regulations 
are applicable on the first day of the first pay period beginning on or 
after January 1, 2016.

FOR FURTHER INFORMATION CONTACT: Joe Ratcliffe, (202) 606-2838; fax: 
(202) 606-0824; email: pay-leave-policy@opm.gov.

SUPPLEMENTARY INFORMATION: Section 5304 of title 5, United States Code 
(U.S.C.), authorizes locality pay for General Schedule (GS) employees 
with duty stations in the United States and its territories and 
possessions. Section 5304(f) authorizes the President's Pay Agent (the 
Secretary of Labor, the Director of the Office of Management and Budget 
(OMB), and the Director of the Office of Personnel Management (OPM)) to 
determine locality pay areas. The boundaries of locality pay areas must 
be based on appropriate factors, which may include local labor market 
patterns, commuting patterns, and the practices of other employers. The 
Pay Agent must give thorough consideration to the views and 
recommendations of the Federal Salary Council, a body composed of 
experts in the fields of labor relations and pay policy and 
representatives of Federal employee organizations. The President 
appoints the members of the Federal Salary Council, which submits 
annual recommendations on the locality pay program to the Pay Agent. 
The establishment or modification of locality pay area boundaries must 
conform to the notice and comment provisions of the Administrative 
Procedure Act (5 U.S.C. 553).
    On June 1, 2015, OPM published a proposed rule in the Federal 
Register on behalf of the Pay Agent. (See 80 FR 30955.) The proposed 
rule proposed linking locality pay area definitions to metropolitan 
areas defined by OMB in February 2013, and proposed establishing 13 new 
locality pay areas: Albany-Schenectady, NY; Albuquerque-Santa Fe-Las 
Vegas, NM; Austin-Round Rock, TX; Charlotte-Concord, NC-SC; Colorado 
Springs, CO; Davenport-Moline, IA-IL; Harrisburg-Lebanon, PA; Kansas 
City-Overland Park-Kansas City, MO-KS; Laredo, TX; Las Vegas-Henderson, 
NV-AZ; Palm Bay-Melbourne-Titusville, FL; St. Louis-St. Charles-
Farmington, MO-IL; and Tucson-Nogales, AZ. The proposed rule did not 
propose modifying the standard commuting and GS employment criteria 
used in the locality pay program to evaluate, as possible areas of 
application, locations adjacent to the metropolitan area comprising the 
basic locality pay area. (A basic locality pay area is an OMB-defined 
metropolitan area on which the definition of a locality pay area is 
based, and an area of application is a location that is not part of a 
basic locality pay area but is included in the locality pay area.) 
However, the proposed rule proposed using updated commuting patterns 
data to calculate commuting interchange rates to evaluate, as potential 
areas of application, locations adjacent to the metropolitan area 
comprising the basic locality pay area. The updated commuting patterns 
data used to calculate commuting interchange rates were collected as 
part of the American Community Survey between 2006 and 2010. In January 
2014, the Federal Salary Council recommended use of those commuting 
patterns data in order to calculate commuting interchange rates used in 
the locality pay program. (The commuting interchange rate is the sum of 
the percentage of employed residents of the area under consideration 
who work in the basic locality pay area and the percentage of the 
employment in the area under consideration that is accounted for by 
workers who reside in the basic locality pay area. The commuting 
interchange rate is calculated by including all workers in assessed 
locations, not just Federal employees.)
    The proposed rule provided a 30-day comment period. The Pay Agent 
reviewed comments received through July 1, 2015. After considering 
those comments, the Pay Agent has decided to implement the locality pay 
area definitions in the proposed rule, with three additional changes. 
Those changes, which are further discussed below, are a name change for 
one locality pay area; the addition of Berkshire County, MA, to the 
Albany-Schenectady, NY, locality pay area; and the addition of Harrison 
County, OH, to the Cleveland-Akron-Canton, OH, locality pay area.
    Based on questions OPM staff received on the definition of the 
``Harrisburg-York-Lebanon, PA'' locality pay area defined in the 
proposed rule, the Pay Agent has decided to change the name of that 
locality pay area to ``Harrisburg-Lebanon, PA.'' The definition of the 
locality pay area remains the same as in the proposed rule, and the 
name change is intended to help clarify that York County, PA, is not 
included in the Harrisburg-Lebanon, PA, locality pay area. Before the 
name change, that locality pay area's name was based on the name of the 
February 2013 Harrisburg-York-Lebanon, PA, Combined Statistical Area, 
the OMB-defined metropolitan area to which the definition of the 
Harrisburg-Lebanon, PA, locality pay area is linked. However, York 
County, PA, which has been an area of application to the Washington-
Baltimore locality pay area since January 2005, will remain in the 
Washington-Baltimore-Arlington, DC-MD-VA-WV-PA, locality pay area.
    In the proposed rule, the Pay Agent invited comment on how to 
address

[[Page 65608]]

``Rest of U.S.'' locations that are almost but not completely 
surrounded by potentially higher-paying locality pay areas. After 
considering comments received, the Pay Agent has decided to include, as 
areas of application, Berkshire County, MA, in the Albany-Schenectady, 
NY, locality pay area and Harrison County, OH, in the Cleveland-Akron-
Canton, OH, locality pay area. While not completely surrounded by 
potentially higher-paying locality pay areas, each of those two 
counties is bordered by three separate locality pay areas. This action 
includes Berkshire County, MA, and Harrison County, OH, in an adjacent 
locality pay area with which each county has the highest commuting 
interchange rate. This policy is consistent with the Pay Agent's 
treatment, in the proposed rule and under these final regulations, of 
completely surrounded locations.
    Berkshire County, MA, and Harrison County, OH, if left in the 
``Rest of U.S.'' locality pay area, would each have a land boundary 
more than 75 percent bordered by three separate locality pay areas. In 
addition, Berkshire and Harrison Counties each have commuting 
interchange rates, with the three locality pay areas they border, that 
sum to more than 7.5 percent. (The Pay Agent notes that the two 
completely surrounded locations included in separate locality pay areas 
under these final regulations--Kent County, MD, which will be included 
in the Washington-Baltimore-Arlington, DC-MD-VA-WV-PA, locality pay 
area, and Lancaster County, PA, which will be included in the 
Harrisburg-Lebanon, PA, locality pay area--also have significant 
commuting interchange rates. Kent and Lancaster Counties each have 
commuting interchange rates of more than 7.5 percent with the locality 
pay area to which they will become areas of application under these 
final regulations.)
    In analyzing counties almost but not completely surrounded by 
separate locality pay areas under the locality pay area definitions 
proposed in the proposed rule, the Pay Agent also considered the 
driving distance by road between an evaluated county's most populous 
duty station, in terms of GS employment, and the most populous duty 
station, in terms of GS employment, in the closest county within the 
adjacent locality pay area with the highest commuting interchange rate. 
(Driving distances and commuting interchange rates served different 
purposes in the analysis of locations almost but not completely 
surrounded by potentially higher-paying locality pay areas. While 
commuting interchange rates were used to indicate the extent to which a 
location is part of each adjacent locality pay area's local labor 
market, driving distances were considered as an indicator of the 
potential for GS employees to commute to a higher-paying locality pay 
area.) For both Berkshire County, MA, and Harrison County, OH, the 
driving distance is less than 50 miles between the county's most 
populous duty station, in terms of GS employment, and the most populous 
duty station, in terms of GS employment, in the closest county within 
the adjacent locality pay area with the highest commuting interchange 
rate.
    The Pay Agent does not believe that a ``Rest of U.S.'' county being 
mostly bordered by separate locality pay areas necessarily warrants 
action unless there is evidence of a substantial labor market linkage 
with one or more neighboring locality pay areas. However, the Pay Agent 
believes the aforementioned information on commuting and driving 
distances for Berkshire County, MA, and Harrison County, OH, when 
considered along with the extent to which each of these counties is 
bordered by three separate locality pay areas, does warrant action. The 
other single-county ``Rest of U.S.'' locations bordered by three 
separate locality pay areas have a smaller percentage of land boundary 
bordered by separate locality pay areas and/or have lesser commuting or 
greater driving distances to the adjacent locality pay areas. (No 
single-county ``Rest of U.S.'' locations are bordered by more than 
three separate locality pay areas.) Individuals concerned about agency 
recruitment or retention capabilities in locations bordered by multiple 
separate locality pay areas and remaining in the ``Rest of U.S.'' 
locality pay area under these final regulations may provide testimony 
to the Federal Salary Council on locations of concern.

Impact and Implementation

    Using February 2013 OMB-defined metropolitan area definitions as 
the basis for locality pay area boundaries and using updated commuting 
patterns data to evaluate potential areas of application will add a 
number of counties now included in the ``Rest of U.S.'' locality pay 
area to separate locality pay areas, which will impact about 6,300 GS 
employees.
    Establishing 13 new locality pay areas will impact about 102,000 GS 
employees. Implementing the 13 new locality pay areas will not 
automatically change locality pay rates now applicable in those areas 
because locality pay percentages are established by Executive order 
under the President's authority in 5 U.S.C. 5304 or 5304a, and the 
President decides each year whether to adjust locality pay percentages. 
When locality pay percentages are increased, past practice has been to 
allocate a percent of the total GS payroll for locality raises and to 
have the overall dollar cost for such pay raises be the same, 
regardless of the number of locality pay areas. If a percent of the 
total GS payroll is allocated for locality pay increases, the addition 
of new areas could result in a smaller amount to allocate for locality 
pay increases in existing areas. Implementing higher locality pay rates 
in the 13 new locality pay areas could thus result in relatively lower 
pay increases for employees in existing locality pay areas than they 
would otherwise receive.

Comments on the Proposed Rule

    OPM received 707 comments on the proposed rule. Most commenters 
supported the proposed changes in the definitions of locality pay 
areas.
    Many commenters expressed the belief that various indicators of 
living costs should be considered in defining locality pay areas or in 
setting locality pay. Living costs are not directly considered in the 
locality pay program. Locality pay is not designed to equalize living 
standards for GS employees across the country. Under 5 U.S.C. 5304, 
locality pay rates are based on comparisons of GS pay and non-Federal 
pay at the same work levels in a locality pay area. Relative living 
costs may indirectly affect non-Federal pay levels, but living costs 
are just one of many factors that affect the supply of and demand for 
labor, and therefore labor costs, in a locality pay area.
    Some commenters disagreed it is appropriate to establish 13 new 
locality pay areas. A number of those commenters expressed concern that 
existing locality pay areas' future pay levels could be set lower than 
they otherwise would, due to establishment of new locality pay areas. 
The President's Pay Agent continues to believe it is appropriate to 
establish the 13 new locality pay areas. The goal of the locality pay 
program is to reduce disparities between GS pay and non-Federal pay for 
the same levels of work in locations where such disparities are 
significant. The Federal Salary Council recommended the 13 new locality 
pay areas after reviewing pay levels in all ``Rest of U.S.'' 
metropolitan statistical areas and combined statistical areas with 
2,500 or more GS employees. The Federal Salary Council found that the 
percentage difference between GS and non-Federal pay levels for the 
same levels of work--i.e., the pay disparity--

[[Page 65609]]

in these 13 locations was substantially greater than the ``Rest of 
U.S.'' pay disparity over an extended period. Because pay disparities 
calculated for the ``Rest of U.S.'' locality pay area are based on 
average pay across many metropolitan areas throughout the United States 
with varying pay levels, and because pay in those metropolitan areas 
can change over time, the Pay Agent believes it is appropriate to 
monitor pay levels in ``Rest of U.S.'' metropolitan areas to the extent 
it is feasible to do so. When such monitoring reveals that a 
metropolitan area has a pay disparity significantly exceeding the 
overall ``Rest of U.S.'' pay disparity over an extended period, the Pay 
Agent believes it is appropriate to establish the metropolitan area as 
a separate locality pay area.
    Some commenters disagreed it is appropriate to use February 2013 
OMB-defined metropolitan areas to define locality pay areas. Some of 
those commenters made living-cost comparisons between different 
portions of the February 2013 OMB metropolitan areas, e.g., comparisons 
between the central and outlying portions of those metropolitan areas. 
Some commenters expressed concern that future locality pay levels might 
be set lower than they otherwise would due to including certain 
portions of a metropolitan area, such as its outlying locations, in a 
locality pay area. Some commenters suggested splitting OMB-defined 
metropolitan areas into separate locality pay areas so that some 
locations in a metropolitan area could receive higher pay rates than 
other locations within the metropolitan area.
    Prior to implementation of locality pay, the Federal Salary Council 
recommended, and the Pay Agent approved, the use of OMB-defined 
metropolitan areas as the basis for locality pay area boundaries, and 
OMB-defined metropolitan areas have been the basis for locality pay 
area boundaries since locality pay was implemented in 1994. (A detailed 
history of the use of OMB-defined metropolitan areas in the locality 
pay program can be found in the Federal Salary Council's January 2014 
recommendations, which are posted on the OPM Web site at https://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/general-schedule/federal-salary-council/recommendation13.pdf.)
    The Pay Agent continues to believe it is appropriate to use OMB-
defined metropolitan areas as the basis for locality pay area 
boundaries and has no evidence that it is appropriate to split an OMB-
defined metropolitan area into separate locality pay areas. Since OMB-
defined metropolitan areas will continue to serve as the basis for 
locality pay area boundaries, the Pay Agent believes it makes sense to 
update the metropolitan areas used in the locality pay program to the 
February 2013 OMB-defined metropolitan areas, since the definitions of 
those metropolitan areas reflect the most recent information on 
population distribution and commuting patterns. Departing from the 
practice of defining basic locality pay areas based on OMB-defined 
metropolitan areas or splitting those metropolitan areas into separate 
locality pay areas would be a significant change, and the implications 
would have to be carefully considered. Individuals interested in 
recommending alternatives to defining basic locality pay areas based on 
entire OMB-defined metropolitan areas may provide testimony to the 
Federal Salary Council.
    Some commenters disagreed it is appropriate to establish new areas 
of application or maintain existing ones, with some commenters 
expressing concern that future locality pay levels could be set lower 
than they otherwise would due to including new areas of application in 
locality pay areas. Prior to implementation of locality pay, the 
Federal Salary Council recommended, and the Pay Agent agreed, that OMB-
defined metropolitan areas not be the sole basis for defining locality 
pay areas. Ever since locality pay was implemented in 1994, criteria 
have been used in the locality pay program to evaluate, as potential 
areas of application, locations adjacent to the metropolitan area 
comprising the basic locality pay area. The Pay Agent continues to 
believe it is appropriate to establish areas of application when 
approved criteria for doing so are met.
    Some commenters disagreed it is appropriate to retain, in their 
current locality pay area, locations that would otherwise move to a 
potentially lower-paying locality pay area as a result of using 
February 2013 OMB-defined metropolitan areas as the basis for locality 
pay area boundaries. The Pay Agent continues to believe it is 
appropriate to retain such locations in their current locality pay 
area. If such a location were moved to a lower-paying locality pay 
area, current GS employees in the location might be entitled to pay 
retention under 5 U.S.C. 5363 and 5 CFR part 536 and would not have a 
reduction in pay. GS employees hired after movement of the location to 
the lower-paying locality pay area would not be entitled to pay 
retention and would receive the lower locality pay rates that would be 
applicable in the location. The Pay Agent believes such an outcome 
would be disruptive for agencies and employees in affected locations.
    A number of commenters objected that locations not included in a 
separate locality pay area were to remain in the ``Rest of U.S.'' 
locality pay area under the proposed rule. Some of those locations are 
metropolitan areas for which the Federal Salary Council has studied 
disparities between non-Federal pay and Federal pay (pay disparities) 
over several years of data and found that the pay disparities do not 
significantly exceed the pay disparity for the ``Rest of U.S.'' 
locality pay area over the same period. Other locations referred to in 
this category of comments do not meet the criteria for areas of 
application. In some cases, commenters cited possible recruitment and 
retention difficulties the commenters believe agencies may have in 
certain locations that would remain in the ``Rest of U.S.'' locality 
pay area when these final regulations are put into effect. The Pay 
Agent has no evidence that the changes these final regulations will 
make in locality pay area definitions will create recruitment and 
retention challenges for Federal employers. However, should recruitment 
and retention challenges exist in a location, Federal agencies have 
considerable administrative authority to address those challenges 
through the use of current pay flexibilities. Information on these 
flexibilities is posted on the OPM Web site at http://www.opm.gov/policy-data-oversight/pay-leave/pay-and-leave-flexibilities-for-recruitment-and-retention.
    A number of commenters expressed their views on pay levels in 
locality pay areas. Some commenters suggested specific locality pay 
percentages to apply to new or existing locality pay areas, and some 
commenters offered opinions on the extent to which pay increases are 
needed in some locality pay areas compared to others. Such comments as 
these are outside of the scope of these final regulations. The purpose 
of these final regulations is to define the boundaries of locality pay 
areas. The role of the Pay Agent with regard to locality pay 
percentages is to report annually to the President what locality pay 
percentages would go into effect under the Federal Employees Pay 
Comparability Act of 1990. The President establishes a base General 
Schedule and sets locality pay percentages each year by Executive 
order.
    Some commenters expressed concern that certain Federal pay systems 
outside of the General Schedule would not benefit from the changes 
planned for

[[Page 65610]]

definitions of GS locality pay areas. Other commenters suggested that 
Federal retirees should receive increased retirement payments if, 
before they retired, they worked in a ``Rest of U.S.'' duty station 
that will now be included in a higher-paying locality pay area. Such 
comments as these are outside of the scope of these final regulations. 
The purpose of these final regulations is to define locality pay areas 
for current Federal employees who receive locality pay under 5 U.S.C. 
5304, not to set pay levels for Federal employees who do not receive 
locality pay under 5 U.S.C. 5304 or to determine retirement payments.
    A number of comments reflected misunderstanding of the proposed 
rule's definitions of locality pay areas, with some comments indicating 
a belief that certain counties actually included in a proposed locality 
pay area were excluded. The definitions of locality pay areas are based 
on combined statistical areas (CSAs) and metropolitan statistical areas 
(MSAs). Because over time counties can be added to CSAs and MSAs, and 
because the Pay Agent wanted any such changes in CSAs and MSAs to be 
reflected automatically in the definitions of locality pay areas, 
rather than list every county in each locality pay area, these final 
regulations will define locality pay areas by listing the CSA and MSA 
comprising the basic locality pay area, with areas of application 
listed as single counties. These final regulations define CSA as the 
geographic scope of a CSA, as defined in OMB Bulletin No. 13-01, plus 
any areas subsequently added to the CSA by OMB, and define MSA as the 
geographic scope of an MSA, as defined in OMB Bulletin No. 13-01, plus 
any areas subsequently added to the MSA by OMB. (OMB Bulletin 13-01 can 
be found at https://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf.)
    A number of comments concerned locations which, under the locality 
pay area definitions in the proposed rule, would remain in the ``Rest 
of U.S.'' locality pay area and be bordered by multiple locality pay 
areas. For the reasons discussed above in the ``Supplementary 
Information'' section of this final rule, after evaluating single-
county locations bordered by multiple locality pay areas, the Pay Agent 
has decided to include, as areas of application, Berkshire County, MA, 
in the Albany-Schenectady, NY, locality pay area and Harrison County, 
OH, in the Cleveland-Akron-Canton, OH, locality pay area. Individuals 
concerned about locations that are bordered by multiple separate 
locality pay areas and remain in the ``Rest of U.S.'' locality pay 
area, under the locality pay area definitions implemented by these 
final regulations, may provide testimony to the Federal Salary Council 
on locations of concern.
    Several commenters expressed concern that U.S. counties that are 
isolated off the coast of the U.S. mainland, and which do not meet 
criteria for areas of application, remain in the ``Rest of U.S.'' 
locality pay area under the changes these regulations will make in the 
definitions of locality pay areas. Some of these comments anecdotally 
referred to recruitment and retention challenges the commenters 
attributed to the locations being limited to ``Rest of U.S.'' locality 
pay. Federal agencies have considerable discretionary authority to 
provide pay and leave flexibilities to address significant recruitment 
and retention challenges, and information on these flexibilities is 
posted on the OPM Web site at http://www.opm.gov/policy-data-oversight/pay-leave/pay-and-leave-flexibilities-for-recruitment-and-retention.
    One commenter opposed any movement of ``Rest of U.S.'' locations to 
separate pay areas, and said the Government should find less costly 
alternatives, such as moving Federal employment sites to areas with 
lower living or labor costs and increasing the use of telework. The Pay 
Agent does not believe that the need to vary pay levels geographically 
based on labor costs can be substantially reduced in the near term by 
relocating Government agencies' duty stations or expanding telework 
programs. In addition, such a comment is outside the scope of these 
final regulations. The purpose of these regulations is to establish 
locality pay area boundaries the Pay Agent has determined to be 
appropriate.
    One commenter suggested that adjacent locality pay areas be 
combined into single locality pay areas, with resultant cost savings to 
the Government. Such a change would be a significant departure from 
current practices in the locality pay program and could have 
significant implications. The implications for adjacent locality pay 
areas are unknown and would have to be carefully considered. 
Individuals interested in pursuing this idea may provide testimony to 
the Federal Salary Council.
    Some comments reflected a mistaken belief that the calculation of 
commuting interchange rates in the locality pay program includes only 
commuting by Federal employees, rather than commuting by all types of 
workers in assessed locations. Some commenters expressed the opinion 
that commuting interchange rates including only commuting for Federal 
employees should be considered in defining locality pay areas. In 
evaluating locations adjacent to basic locality pay areas as potential 
areas of application, commuting by all types of workers, not just 
Federal employees, is used as a criterion. Commuting interchange rates 
used in the locality pay program are a measure of economic linkage 
between a basic locality pay area and an adjacent location. Commuting 
interchange rates used in the locality pay program are used to indicate 
the extent to which a location is part of the locality pay area's 
entire local labor market, not to indicate the extent to which Federal 
employees commute between locations.

Executive Order 13563 and Executive Order 12866

    OMB has reviewed this rule in accordance with E.O. 13563 and E.O. 
12866.

Regulatory Flexibility Act

    I certify that these regulations would not have a significant 
economic impact on a substantial number of small entities because they 
would apply only to Federal agencies and employees.

List of Subjects in 5 CFR Part 531

    Government employees, Law enforcement officers, Wages.

Office of Personnel Management.
Beth F. Cobert,
Acting Director.
    Accordingly, OPM is amending 5 CFR part 531 as follows:

PART 531--PAY UNDER THE GENERAL SCHEDULE

0
1. The authority citation for part 531 continues to read as follows:

    Authority:  5 U.S.C. 5115, 5307, and 5338; sec. 4 of Pub. L. 
103-89, 107 Stat. 981; and E.O. 12748, 56 FR 4521, 3 CFR, 1991 
Comp., p. 316; Subpart B also issued under 5 U.S.C. 5303(g), 5305, 
5333, 5334(a) and (b), and 7701(b)(2); Subpart D also issued under 5 
U.S.C. 5335 and 7701(b)(2); Subpart E also issued under 5 U.S.C. 
5336; Subpart F also issued under 5 U.S.C. 5304, 5305, and 5941(a), 
E.O. 12883, 58 FR 63281, 3 CFR, 1993 Comp., p. 682 and E.O. 13106, 
63 FR 68151, 3 CFR, 1998 Comp., p. 224.

Subpart F--Locality-Based Comparability Payments

0
2. In Sec.  531.602, the definitions of CSA and MSA are revised to read 
as follows:


Sec.  531.602  Definitions.

* * * * *

[[Page 65611]]

    CSA means the geographic scope of a Combined Statistical Area, as 
defined by the Office of Management and Budget (OMB) in OMB Bulletin 
No. 13-01, plus any areas subsequently added to the CSA by OMB.
* * * * *
    MSA means the geographic scope of a Metropolitan Statistical Area, 
as defined by the Office of Management and Budget (OMB) in OMB Bulletin 
No. 13-01, plus any areas subsequently added to the MSA by OMB.
* * * * *

0
3. In Sec.  531.603, paragraph (b) is revised to read as follows:


Sec.  531.603  Locality pay areas.

* * * * *
    (b) The following are locality pay areas for the purposes of this 
subpart:
    (1) Alaska--consisting of the State of Alaska;
    (2) Albany-Schenectady, NY--consisting of the Albany-Schenectady, 
NY CSA and also including Berkshire County, MA;
    (3) Albuquerque-Santa Fe-Las Vegas, NM--consisting of the 
Albuquerque-Santa Fe-Las Vegas, NM CSA;
    (4) Atlanta--Athens-Clarke County--Sandy Springs, GA-AL--consisting 
of the Atlanta--Athens-Clarke County--Sandy Springs, GA CSA and also 
including Chambers County, AL;
    (5) Austin-Round Rock, TX--consisting of the Austin-Round Rock, TX 
MSA;
    (6) Boston-Worcester-Providence, MA-RI-NH-CT-ME--consisting of the 
Boston-Worcester-Providence, MA-RI-NH-CT CSA, except for Windham 
County, CT, and also including Androscoggin County, ME, Cumberland 
County, ME, Sagadahoc County, ME, and York County, ME;
    (7) Buffalo-Cheektowaga, NY--consisting of the Buffalo-Cheektowaga, 
NY CSA;
    (8) Charlotte-Concord, NC-SC--consisting of the Charlotte-Concord, 
NC-SC CSA;
    (9) Chicago-Naperville, IL-IN-WI--consisting of the Chicago-
Naperville, IL-IN-WI CSA;
    (10) Cincinnati-Wilmington-Maysville, OH-KY-IN--consisting of the 
Cincinnati-Wilmington-Maysville, OH-KY-IN CSA and also including 
Franklin County, IN;
    (11) Cleveland-Akron-Canton, OH--consisting of the Cleveland-Akron-
Canton, OH CSA and also including Harrison County, OH;
    (12) Colorado Springs, CO--consisting of the Colorado Springs, CO 
MSA and also including Fremont County, CO, and Pueblo County, CO;
    (13) Columbus-Marion-Zanesville, OH--consisting of the Columbus-
Marion-Zanesville, OH CSA;
    (14) Dallas-Fort Worth, TX-OK--consisting of the Dallas-Fort Worth, 
TX-OK CSA and also including Delta County, TX, and Fannin County, TX;
    (15) Davenport-Moline, IA-IL--consisting of the Davenport-Moline, 
IA-IL CSA;
    (16) Dayton-Springfield-Sidney, OH--consisting of the Dayton-
Springfield-Sidney, OH CSA and also including Preble County, OH;
    (17) Denver-Aurora, CO--consisting of the Denver-Aurora, CO CSA and 
also including Larimer County, CO;
    (18) Detroit-Warren-Ann Arbor, MI--consisting of the Detroit-
Warren-Ann Arbor, MI CSA;
    (19) Harrisburg-Lebanon, PA--consisting of the Harrisburg-York-
Lebanon, PA CSA, except for Adams County, PA, and York County, PA, and 
also including Lancaster County, PA;
    (20) Hartford-West Hartford, CT-MA--consisting of the Hartford-West 
Hartford, CT CSA and also including Windham County, CT, Franklin 
County, MA, Hampden County, MA, and Hampshire County, MA;
    (21) Hawaii--consisting of the State of Hawaii;
    (22) Houston-The Woodlands, TX--consisting of the Houston-The 
Woodlands, TX CSA and also including San Jacinto County, TX;
    (23) Huntsville-Decatur-Albertville, AL--consisting of the 
Huntsville-Decatur-Albertville, AL CSA;
    (24) Indianapolis-Carmel-Muncie, IN--consisting of the 
Indianapolis-Carmel-Muncie, IN CSA and also including Grant County, IN;
    (25) Kansas City-Overland Park-Kansas City, MO-KS--consisting of 
the Kansas City-Overland Park-Kansas City, MO-KS CSA and also including 
Jackson County, KS, Jefferson County, KS, Osage County, KS, Shawnee 
County, KS, and Wabaunsee County, KS;
    (26) Laredo, TX--consisting of the Laredo, TX MSA;
    (27) Las Vegas-Henderson, NV-AZ--consisting of the Las Vegas-
Henderson, NV-AZ CSA;
    (28) Los Angeles-Long Beach, CA--consisting of the Los Angeles-Long 
Beach, CA CSA and also including Kern County, CA, and Santa Barbara 
County, CA;
    (29) Miami-Fort Lauderdale-Port St. Lucie, FL--consisting of the 
Miami-Fort Lauderdale-Port St. Lucie, FL CSA and also including Monroe 
County, FL;
    (30) Milwaukee-Racine-Waukesha, WI--consisting of the Milwaukee-
Racine-Waukesha, WI CSA;
    (31) Minneapolis-St. Paul, MN-WI--consisting of the Minneapolis-St. 
Paul, MN-WI CSA;
    (32) New York-Newark, NY-NJ-CT-PA--consisting of the New York-
Newark, NY-NJ-CT-PA CSA and also including all of Joint Base McGuire-
Dix-Lakehurst;
    (33) Palm Bay-Melbourne-Titusville, FL--consisting of the Palm Bay-
Melbourne-Titusville, FL MSA;
    (34) Philadelphia-Reading-Camden, PA-NJ-DE-MD--consisting of the 
Philadelphia-Reading-Camden, PA-NJ-DE-MD CSA, except for Joint Base 
McGuire-Dix-Lakehurst;
    (35) Phoenix-Mesa-Scottsdale, AZ--consisting of the Phoenix-Mesa-
Scottsdale, AZ MSA;
    (36) Pittsburgh-New Castle-Weirton, PA-OH-WV--consisting of the 
Pittsburgh-New Castle-Weirton, PA-OH-WV CSA;
    (37) Portland-Vancouver-Salem, OR-WA--consisting of the Portland-
Vancouver-Salem, OR-WA CSA;
    (38) Raleigh-Durham-Chapel Hill, NC--consisting of the Raleigh-
Durham-Chapel Hill, NC CSA and also including Cumberland County, NC, 
Hoke County, NC, Robeson County, NC, Scotland County, NC, and Wayne 
County, NC;
    (39) Richmond, VA--consisting of the Richmond, VA MSA and also 
including Cumberland County, VA, King and Queen County, VA, and Louisa 
County, VA;
    (40) Sacramento-Roseville, CA-NV--consisting of the Sacramento-
Roseville, CA CSA and also including Carson City, NV, and Douglas 
County, NV;
    (41) San Diego-Carlsbad, CA--consisting of the San Diego-Carlsbad, 
CA MSA;
    (42) San Jose-San Francisco-Oakland, CA--consisting of the San 
Jose-San Francisco-Oakland, CA CSA and also including Monterey County, 
CA;
    (43) Seattle-Tacoma, WA--consisting of the Seattle-Tacoma, WA CSA 
and also including Whatcom County, WA;
    (44) St. Louis-St. Charles-Farmington, MO-IL--consisting of the St. 
Louis-St. Charles-Farmington, MO-IL CSA;
    (45) Tucson-Nogales, AZ--consisting of the Tucson-Nogales, AZ CSA 
and also including Cochise County, AZ;
    (46) Washington-Baltimore-Arlington, DC-MD-VA-WV-PA--consisting of 
the Washington-Baltimore-Arlington, DC-MD-VA-WV-PA CSA and also 
including Kent County, MD, Adams County, PA, York County, PA, King 
George County, VA, and Morgan County, WV; and
    (47) Rest of U.S.--consisting of those portions of the United 
States and its territories and possessions as listed in 5

[[Page 65612]]

CFR 591.205 not located within another locality pay area.

[FR Doc. 2015-27380 Filed 10-26-15; 8:45 am]
BILLING CODE 6325-39-P