How Are 2019 GS Pay Scales with Locality Calculated?
Regardless of your tenure as a Civilian Federal Employee, it’s important to understand your salary and how it is calculated to ensure financial security. At the end of 2018, your financial situation will change by locality under the 2019 General Schedule (GS) pay scale, and you may wonder exactly how these changes will impact you based on the area where you live. In this article, we explain the role of locality in the GS pay scale and the impact it has on your earnings.
Understanding the GS Pay Scale
The government pays federal employees through the Office of Personnel Management. The amount a federal employee earns mostly depends on three factors:
GS Pay Grade:
There are 15 grades within the GS scale. Grades rise in accordance with the level of expertise and responsibility required for the specific position.
GS Pay Step:
There are 10 step rates within each grade. A higher step grade is equivalent to a higher salary and shifting step rates typically resulting from a promotion or consecutive years of employment.
The amount paid to an employee depends on the region where they work, which can account for fluctuating cost-of-living expenses.
GS pay grade and pay step both factor into the base pay of a position. However, the base pay for a job in Ohio may better align with cost-of-living expenses than the same position in California, for example. Because of this, base pay is then adjusted by locality before an employee receives payment.
Calculating Locality Pay Rates
A base pay value is adjusted by a specific percentage rate determined by locality. To calculate the percentage adjustment each year, the U.S. Bureau of Labor Statistics issues the National Compensation Survey. This survey gathers a variety of data, including salary levels of non-federal employees in specific geographic locations. A comparison of these salaries and the base pay levels of federal employees working at a similar capacity helps assist in calculating the locality pay adjustment.
There are 47 locality areas, set by the Office of Management and Budget using defined Metropolitan Statistical Areas and Combine Statistical Areas. Hawaii and Alaska have their pay scales, while other locations around the contiguous United States that do not fall into a locality pay area are grouped as ‘Rest of United States.’ Locality pay is only relevant for Federal employees working in U.S. states, territories, and possessions.
Pay areas may be adjusted each year as proposals are made. For example, a 2018 proposed rule by the Office of Personnel Management detailed adjustments to four pay areas, one being to place McKinley County, New Mexico in the Albuquerque-Santa Fe-Las Vegas, New Mexico pay area instead of remaining in the rest of U.S. pay area.
How Locality Pay Rates Impact You
Often, Federal employees earn more than the base pay rate when salaries depend on the GS pay scale with locality. For example, the base pay rate for an employee at GS grade 8 and GS step 4 in 2018 was $43,679. If the employee lived in Chicago, Illinois, then the adjusted pay rate was $55,678, as a 2018 GS pay increase and locality adjustment increased pay by 1.9 percent. It is possible to predict how locality is calculated into your pay scale by viewing the locality area pay definitions provided by the Office of Personnel Management.
Stay Informed and Secure
WAEPA has been helping Civilian Federal Employees live informed and secure lives since 1943. Financial security, along with Group Term Life Insurance* coverage, can have many benefits for you and your family. To learn more about Group Term Life Insurance** and the other resources and benefits we offer our members, contact us today!
*Underwritten by New York Life Insurance Company, 51 Madison Ave., New York, NY 10010 on Policy Form GMR
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This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.