General Schedule Locality Pay Areas, 65607-65612 [2015-27380]
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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.
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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
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SUPPLEMENTARY INFORMATION:
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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
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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
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‘‘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
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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
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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—
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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
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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
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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 https://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
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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
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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 https://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
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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.
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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;
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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).
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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).
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Fmt 4700
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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
week.
========================================================================
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 https://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 https://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