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R40079
Nonforeign Cost-of-Living Allowances and Possible Transition to Locality Pay
December 01, 2008

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Summary:

More than 41,000 white-collar federal civilian employees, including U.S. Postal Service employees, are stationed in the following ?nonforeign? areas outside the contiguous United States: Alaska, Hawaii, Guam, the Commonwealth of Northern Mariana Islands (CNMI), Puerto Rico, and the U.S. Virgin Islands (USVI). These employees receive nonforeign cost-of-living allowances (COLAs) in addition to their regular pay. Nonforeign COLAs, which are authorized by 5 U.S.C. § 5941 and Executive Order 10000 (as amended), were first enacted in 1948 to aid federal white-collar job recruitment in nonforeign areas outside the contiguous United States or in the Alaska territory where ?living costs [are] substantially higher than in the District of Columbia.? Nonforeign COLAs have faced legal challenges because they create differences in pay between employees who receive a nonforeign COLA and employees within the contiguous United States who, instead, receive locality-based comparability pay.

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December 01, 2008