Final Regulations on Pay in Non-Foreign Areas The U.S. Office of Personnel Management (OPM) has issued final regulations on pay administration rules for employees in “non-foreign areas,” which include Alaska, Hawaii, Guam, Puerto Rico, the Virgin Islands, and certain other areas listed in 5 CFR 591.205. Please find the subject memorandum, Final Regulations on Pay in Non-Foreign Areas, from Angela Bailey, Associate Director, Employee Services, at the following website: http://chcoc.gov/transmittals/TransmittalDetails.aspx?TransmittalID=4398.
Cost of Living Allowance:
The U.S. Government pays cost-of-living allowances (COLAs) to white-collar civilian Federal employees in Alaska, Hawaii, Guam and the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. Approximately 49,000 employees, including U.S. Postal Service employees, receive these COLAs. Section 5941 of title 5, United States Code, and Executive Order 10000 (as amended) authorize the payment of COLAs in nonforeign areas.
To set the COLA rates, the Office of Personnel Management (OPM) surveys the prices of over 300 items, including goods and services, housing, transportation, and miscellaneous expenses. OPM conducts these surveys in each of the COLA areas and in the Washington, DC, area.
The Federal Employees Pay Comparability Act of 1990 (FEPCA) established a locality pay system for General Schedule (GS) employees which was implemented in January 1994. It provides for pay adjustments based on survey comparisons with non-Federal rates on a locality basis. Its goal was to narrow the pay gap between Federal and non-Federal salaries over a nine-year period and is payable within each locality determined to have a pay disparity greater than 5 percent.
Locality pay applies to GS employees in the continental United States (CONUS). It does not cover overseas GS employees. Employees entitled to a higher rate of pay than the locality pay rate for their area receive the higher rate.
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