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Pay & Leave Pay Administration

Fact Sheet: Administering Locality Rates

Background

Locality-based comparability payments are authorized under 5 U.S.C. 5304 and apply to most General Schedule employees. Regulations are at 5 CFR part 531, subpart F.

Determining a Locality Rate

To determine an employee's locality rate, increase the employee's "scheduled annual rate of pay" by the locality pay percentage authorized by the President for the locality pay area in which the employee's official worksite is located. Locality pay areas are defined in 5 CFR 531.603.

"Scheduled Annual Rate of Pay"

An employee's "scheduled annual rate of pay" consists of -

  1. The General Schedule (GS or GM) base rate for the employee's grade and step (or relative position in the rate range), excluding additional pay of any kind such as locality payments or special rate supplements;
  2. A special base rate for GS law enforcement officers (LEOs) at grades GS-3 through GS-10 under section 403 of the Federal Employees Pay Comparability Act of 1990 (Public Law 101-509); or
  3. For an employee in a category of positions described in 5 U.S.C. 5304(h)(1) for which the President (or designee) has authorized locality payments under 5 U.S.C. 5304(h)(2), the annual rate of pay fixed by law or administrative action, exclusive of any locality-based adjustments (including adjustments equivalent to local special rate supplements under 5 CFR 530, subpart C) or other additional pay of any kind.

Pay Entitlement

An employee must receive the greatest of the following rates of pay, as applicable:

  • The scheduled annual rate of pay payable to the employee;
  • A locality rate under 5 CFR part 531, subpart F, or a similar rate under other legal authority;
  • A special rate under 5 CFR part 530, subpart C, or a similar rate under other legal authority (e.g., 38 U.S.C. 7455); or
  • A retained rate under 5 CFR part 536 or a similar rate under other legal authority.

Basic Pay

A locality rate is basic pay for the purpose of computing the following, as applicable:

  • Retirement deductions and benefits
  • Life insurance premiums and benefits
  • Premium pay and premium pay limitations
  • Severance pay
  • Advances in pay
  • Lump-sum payments for accrued and accumulated annual leave
  • Post differentials under 5 U.S.C. 5925(a) and danger pay allowances under 5 U.S.C. 5928 for an employee temporarily working in a foreign area when the employee's official worksite is located in a locality pay area
  • Post differentials under 5 U.S.C. 5941 and 5 CFR part 591, subpart B, for an employee temporarily working in a nonforeign area when the employee's official worksite is located in a locality pay area”--with “Nonforeign area cost-of-living allowances and post differentials under 5 U.S.C. 5941 and 5 CFR part 591, subpart B
  • Recruitment, relocation, and retention incentives, supervisory differentials, and extended assignment incentives
  • Performance-based cash awards when such awards are computed as a percentage of an employee's rate of basic pay
  • GS pay administration provisions (e.g., promotions) to the extent provided in 5 CFR part 531, subpart B
  • Pay administration provisions for prevailing rate employees which consider rates of basic pay under the GS pay system in setting pay (except as otherwise provided in 5 CFR part 532), subject to the requirement that, if the employee's actual locality rate would not apply at the official worksite for the prevailing rate position, that locality rate must be converted to a corresponding rate on the locality rate schedule for that official worksite; and
  • Grade and pay retention to the extent provided in 5 CFR part 536

A locality rate is basic pay for other provisions as specified in other statutes or OPM regulations, and payments or benefits equivalent to those listed above under other legal authorities, as determined by the head of the agency or other authorized official responsible for administering such payments or benefits. (See 5 U.S.C. 5304(c)(2) and 5 CFR 531.610.)

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