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REPORT TO CONGRESS

SALINAS-MONTEREY, CALIFORNIA, FEDERAL WAGE SYSTEM WAGE AREA

The FWS pay determination process is maintained through the cooperative efforts of agency management and employee organization representatives. By law, employee representatives are active at every level of the pay determination process. Several levels of responsibility have been established for the efficient management of the prevailing rate determination process. OPM establishes Governmentwide policies. The Department of Defense serves as the agent for FWS wage surveys and establishes FWS wage schedules following OPM's policies and procedures. In each of the 132 appropriated fund wage areas, a local wage survey committee is responsible for carrying out local wage surveys under OPM and DOD guidelines.

Under 5 U.S.C. 5343, the Director of OPM is responsible for defining FWS wage area boundaries. In practice, OPM defines FWS wage area boundaries based on recommendations of FPRAC. OPM frequently receives inquiries from members of the public, employees, union representatives, local wage survey committees, Federal agency representatives, and Members of Congress on how and why FWS wage area boundaries are set the way they are. OPM frequently receives recommendations on how an interested party thinks a particular wage area should be defined.

OPM listens carefully to recommendations on wage area boundaries and keeps track of where concerns originate. However, OPM acts to change the definition of an FWS wage area only after receiving advice from FPRAC. OPM has established regulatory criteria that FPRAC uses as the basis for making recommendations on FWS wage area boundaries. For FPRAC to consider a proposal to change an FWS wage area boundary, a member of the Committee must introduce the matter for discussion. Any labor or management member of FPRAC may introduce a subject for discussion by the Committee. OPM initiates a review of FWS wage area boundaries following each census. The next system-wide review of FWS wage area boundaries will begin in 2003 after we receive new demographic information from the 2000 census.

We have received recommendations from employees, union representatives, and Members of Congress concerning the definition of the Salinas-Monterey wage area. For the last few years, the Local Wage Survey Committee for the Salinas-Monterey wage area has recommended that the wage area be abolished and its counties combined with the San Francisco wage area. The Local Wage Survey Committee based its recommendation on factors such as the number and types of companies in the Salinas-Monterey wage area, the types of work performed in local private sector companies, the cost of living in the wage area, and the fact that white-collar Federal employees in Monterey are included in the San Francisco-Oakland-San Jose, CA General Schedule locality pay area.

The members of FPRAC have not supported the abolishment of the Salinas-Monterey wage area in the past because it meets all of the criteria recommended by the Committee to remain a separate wage area. None of the employee or agency representatives on FPRAC have requested further review of the definition of the Salinas-Monterey wage area based on the Local Wage Survey Committee's recommendations. OPM plans to initiate a review of all FWS wage area boundaries, based on new census data, in 2003. However, because of the continuing interest in the definition of this wage area, OPM recently presented the Salinas-Monterey wage area issue to FPRAC for its consideration. The following sections of this report describe the Salinas-Monterey wage area, local wage survey findings for the wage area, and the existing pay flexibilities available to Federal agencies to ensure that they are able to attract and retain a qualified workforce.

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