Pay Under the General Schedule; Locality-Based Comparability Payments

AGENCY:

Office of Personnel Management.

ACTION:

Final rule.

SUMMARY:

The Office of Personnel Management (OPM) is issuing final regulations to change the boundaries of two locality pay areas for 2001 by adding areas of application to the Boston-Worcester-Lawrence, MA-NH-ME-CT, locality pay area and the San Francisco-Oakland-San Jose, CA, locality pay area. We are adding the State of Rhode Island as an area of application to the Boston locality pay area and Monterey County, CA, as an area of application to the San Francisco locality pay area. These changes are based on recommendations of the Federal Salary Council, a body composed of experts in the fields of labor relations or pay setting and representatives of Federal employee organizations. Based on comments received on the proposed regulations, we are also adding to the Boston locality pay area the portion of Bristol County, MA, not already included in the Boston area.

EFFECTIVE DATE:

The regulations are effective on January 1, 2001, and are applicable on the first day of the first pay period beginning on or after January 1, 2001.

FOR FURTHER INFORMATION CONTACT:

Allan Hearne, (202) 606-2838; FAX: (202) 606-4264; EMAIL: payleave@opm.gov.

SUPPLEMENTARY INFORMATION:

On August 16, 2000, the Office of Personnel Management (OPM) published proposed regulations to add two locations as areas of application to existing locality pay areas. Section 5304(f) of title 5, United States Code, 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 provide for such pay localities as the Pay Agent considers appropriate. 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 or pay setting and representatives of Federal employee organizations. The President appoints the members of the Federal Salary Council, and they submit annual recommendations to the Pay Agent about the locality pay program for General Schedule employees. The establishment or modification of pay area boundaries must conform with the notice and comment provisions of the Administrative Procedure Act (5 U.S.C. 553).

Based on the Council's recommendations in 1993, the Pay Agent approved using Metropolitan Statistical Area (MSA) boundaries as the basis for defining locality pay areas. OMB establishes MSAs based on population size, population density, and commuting patterns. The Council also recommended and the Pay Agent approved criteria for adding adjacent counties as “areas of application.”

In its letter of October 22, 1999, to the Pay Agent, the Federal Salary Council recommended making two changes in the area of application criteria for 2001. The first change would create a new set of “Full State” criteria to treat a State smaller than 115 percent of the average county size as a single county for application of the existing county criteria. This change would make the State of Rhode Island an area of application to the Boston locality pay area. The Council recommended this change because nearby higher-paying locality pay areas virtually surround Rhode Island, agencies in Rhode Island have reported difficulties in filling positions because of higher locality rates in Boston and Hartford, and counties in Rhode Island are so small that no single county passes the existing criteria.

The second change would amend the population density portion of the current criteria by reducing the “percent of population living in urbanized areas” criterion from 90 percent to 80 percent. This change would qualify Monterey County, CA, as an area of application to the San Francisco locality pay area. The Council recommended this change because a significant portion of Monterey County is devoted to Federal parkland and military installations, making it difficult to pass the population density criterion even though there is a significant level of commuting between Monterey and San Francisco.

In its 1999 report to the President, the Pay Agent tentatively agreed to make the changes recommended by the Federal Salary Council. The revised criteria for adding an adjacent area as an area of application are:

A. County-wide areas of application. To be included in the pay area, the affected county must—

1. currently be in the Rest of U.S. pay area and be contiguous to a pay locality (exclusive of any other areas of application);

2. contain at least 2,000 General Schedule (GS) employees;

3. have a significant level of urbanization based on 1990 Census data, defined as a population density of more than 200 persons per square mile or at least 80 percent of the population in urbanized areas; and

4. demonstrate some economic linkage with the pay locality, defined as commuting at a level of 5 percent or more into or from the county under consideration and the central core of the metropolitan area as identified by the Census Bureau.

B. Partial-county areas of application in New England. To be in the pay area, the partial county must—

1. currently be in the Rest of U.S. pay area and be contiguous to the pay locality (exclusive of any other areas of application);

2. contain at least 2,000 GS employees;

3. be part of an entire county that has a population density of more than 200 persons per square mile or at least 80 percent of the population in urbanized areas; and

4. be part of an entire county that demonstrates some economic linkage with the pay locality, defined as commuting at a level of 5 percent or more into or from the county under consideration and the central core of the metropolitan area as identified by the Census Bureau.

C. Federal facilities crossing pay locality boundaries. To be in the pay locality, the portion of a Federal facility which crosses pay locality boundaries and which is not in the pay locality must—

1. contain at least 1,000 GS employees;

2. have the duty stations of the majority of GS employees within 10 miles of the locality; and

3. have a significant number of its employees commuting from the pay locality.

D. Full-State areas of application. In order to be evaluated for area of application status, an entire State may be considered as one county for purposes of applying the county-wide area-of-application criteria if—

1. no part of the State is already in a separate metropolitan pay area;

2. the State is adjacent to the pay area (exclusive of any other areas of application); and

3. the State is smaller than 115 percent of the average county size in square miles in the lower 48 States plus Washington, DC, as determined by OPM using land area data published by the Census Bureau and the number of counties in the United States as determined by the Census Bureau.

After application of the above criteria, the entire State must still pass the county-wide area-of-application criteria before it can become an area of application.

We received more than 800 comments on the proposed regulations. Virtually all of the comments were in support of the proposed changes. A few comments focused on issues outside the scope of the proposed rule, such as when other areas might become separate locality pay areas.

We also received a number of comments about a portion of Bristol County, MA, that lies between the Boston Consolidated Metropolitan Statistical Area (CMSA) and the State of Rhode Island. There are eight cities/townships in this small strip, which is about 10 miles wide (east to west) at it widest and about 30 miles long (north to south). Although there is a significant amount of commuting to and from both Providence and Boston from this area, all of the cities/townships in this area are part of the Providence MSA because there is a greater level of commuting to and from Providence.

Commenters, including affected employees, Members of Congress, an employing agency, and the Greater Boston Federal Executive Board, concluded that Federal agencies in these areas will not be able to recruit and retain an adequate workforce if employees can drive 10 miles or less in virtually any direction and receive the higher Boston locality pay rate. After reviewing the comments and other pertinent data on this small area, including commuting patterns and population density, we have concluded that all of Bristol County, MA, should be included in the Boston locality pay area. The Pay Agent believes that excluding these eight cities/townships would create an egregious situation, unique under the locality pay program. This small area, which has significant ties to both Providence and Boston, is virtually surrounded by the Boston locality pay area and the new Rhode Island area of application. In addition, the entire area is within easy commuting distance of the rest of the Boston locality pay area. There are no other similarly situated areas.

Therefore, the final regulations include both the State of Rhode Island and all of Bristol County, MA, in the Boston-Worcester-Lawrence, MA-NH-ME-CT, locality pay area. In addition, as originally recommended by the Federal Salary Council and proposed by the Pay Agent, the final regulations include Monterey County, CA, in the San Francisco-Oakland-San Jose, CA, locality pay area.

E.O. 12866, Regulatory Review

The Office of Management and Budget has reviewed this rule in accordance with E.O. 12866.

Regulatory Flexibility Act

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

List of Subjects in 5 CFR Part 531

• Government employees
• Law enforcement officers
• Wages

Accordingly, OPM is amending part 531 of title 5, Code of Federal Regulations, 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), 5333, 5334(a), and 7701(b)(2);

Subpart C also issued under 5 U.S.C. 5304, 5305, and 5553; sections 302 and 404 of FEPCA, Pub. L. 101-509, 104 Stat. 1462 and 1466; and section 3(7) of Pub. L. 102-378, 106 Stat. 1356;

Subpart D also issued under 5 U.S.C. 5335(g) 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(g)(1), and 5553; and E.O. 12883, 58 FR 63281, 3 CFR, 1993 Comp., p. 682;

Subpart G also issued under 5 U.S.C. 5304, 5305, and 5553; section 302 of the Federal Employees Pay Comparability Act of 1990 (FEPCA), Pub. L. 101-509, 104 Stat. 1462; and E.O. 2786, 56 FR 67453, 3 CFR, 1991 Comp., p. 376.

Subpart F—Locality-Based Comparability Payments

2. In § 531.603, paragraphs (b)(2) and (b)(29) are revised to read as follows: