ALLOWANCES AND DIFFERENTIALS

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CFR Regulation

ALLOWANCES AND DIFFERENTIALS

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5 CFR Part 591

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Appendix A to Subpart B of Part 591Appendix A to Subpart B of Part 591—Places and Rates at Which Allowances Are Paid

This appendix lists the places approved for a cost-of-living allowance and shows the authorized allowance rate for each area. The allowance rate shown is paid as a percentage of an employee's rate of basic pay. The rates are subject to change based on the results of future surveys.
Geographic coverage
Allowance rate (percent)
State of Alaska:
City of Anchorage and 80-kilometer (50-mile) radius by road
23
City of Fairbanks and 80-kilometer (50-mile) radius by road
23
City of Juneau and 80-kilometer (50-mile) radius by road
23
Rest of the State
25
State of Hawaii:
City and County of Honolulu
25
Hawaii County, Hawaii
18
County of Kauai
25
County of Maui and County of Kalawao
25
Territory of Guam and Commonwealth of the Northern Mariana Islands
25
Commonwealth of Puerto Rico
14
U.S. Virgin Islands
25

Appendix B to Subpart B of Part 591Appendix B to Subpart B of Part 591—Places and Rates At Which Differentials Are Paid

This appendix lists the places where a post differential has been approved and shows the differential rate to be paid to eligible employees. The differential percentage rate shown is paid as a percentage of an employee's rate of basic pay.
Geographic coverage
Percentage differential rate
American Samoa (including the island of Tutuila, the Manua Islands, and all other islands of the Samoa group east of longitude 171° west of Greenwich, together with Swains Island)
25.0
Johnston Atoll
25.0
Midway Atoll
25.0
Territory of Guam and Commonwealth of the Northern Mariana Islands
20.0
Wake Atoll
25.0

Appendix A to Subpart C of Part 591Appendix A to Subpart C of Part 591—Daily Transportation Allowance Schedule, Commuting Over Land by Private Motor Vehicle to Remote Duty Posts

Schedule I—Effective January 8, 1971, Through July 12, 1975
Round trip distance in excess of 50 miles
Degree A commuting conditions
Degree B commuting conditions
Degree C commuting conditions
up to 9 miles
$0.20
$0.22
$0.24
to 19
.70
.77
.84
to 29
20
32
44
to 39
70
87
04
to 49
20
42
64
to 59
70
97
24
to 69
20
52
84
to 79
70
07
44
to 89
20
62
04
to 99
70
17
64
to 109
20
72
24
to 119
70
27
84
to 129
20
82
44
to 139
70
37
04
to 149
20
92
64
to 159
70
47
24
to 169
20
02
84
and over
70
57
10.00
See footnote at end of Schedule II.
Schedule II—Effective on or after July 13, 1975
Round trip distance in excess of 50 miles
Degree A commuting conditions
Degree B commuting conditions
Degree C commuting conditions
up to 9 miles
$0.30
$0.32
$0.34
to 19
05
12
19
to 29
80
92
04
to 39
55
72
89
to 49
30
52
74
to 59
13
32
68
to 69
80
12
44
to 79
55
92
29
to 89
30
72
14
to 99
05
52
99
to 109
80
32
84
to 119
55
12
69
to 129
30
92
10.00
to 139
10.00
10.00
10.00
to 149
10.00
10.00
10.00
to 159
10.00
10.00
10.00
to 169
10.00
10.00
10.00
and over
10.00
10.00
10.00
Under the statute, $10 a day is the maximum allowance.
Schedule III—Effective on or After December 28, 1980
Round-trip distance in excess of 80 kilometers (50 miles)
Degree A commuting conditions
Degree B commuting conditions
Degree C commuting conditions
Up to 15 km (up to 9 mi)
$0.40
$0.42
$0.44
to 31 km (10 to 19 mi)
40
47
54
to 47 km (20 to 29 mi)
40
52
64
to 63 km (30 to 39 mi)
40
57
74
to 79 km (40 to 49 mi)
40
62
84
to 95 km (50 to 59 mi)
40
67
94
to 111 km (60 to 69 mi)
40
72
04
to 127 km (70 to 79 mi)
40
77
14
to 144 km (80 to 89 mi)
40
82
24
to 160 km (90 to 99 mi)
40
87
00
to 176 km (100 to 109 mi)
00
00
00
to 192 km (110 to 119 mi)
00
00
00
to 208 km (120 to 129 mi)
00
00
00
to 224 km (130 to 139 mi)
00
00
00
to 240 km (140 to 149 mi)
00
00
00
to 256 km (150 to 159 mi)
00
00
00
to 272 km (160 to 169 mi)
00
00
00
km and over (170 mi and over)
00
00
00
Under the statute, $10 a day is the maximum allowance.
Degree A Commuting Conditions
Good paved roads; climatic conditions cause intermittent driving difficulty.
Degree B Commuting Conditions
Roads typically fair but may be good for part of distance or may be unpaved for short distances; climatic conditions during part of a season, in relation to terrain, contribute to additional cost.
Degree C Commuting Conditions
Fair to poor roads; unpaved for part of distance, or travel over range; hilly or mountainous terrain; climatic conditions during most of a season contribute to additional cost.

Appendix B to Subpart C of Part 591Appendix B to Subpart C of Part 591—Daily Inconvenience or Hardship Allowance Schedule, Commuting Over Land by Motor Vehicle to Remote Duty Posts

Round trip distance in excess of 2 hours
Degree A commuting conditions
Degree B commuting conditions
Degree C commuting conditions
up to 15 minutes
$0.50
$0.63
$0.75
to 30
00
25
50
to 45
50
88
25
to 60
00
50
00
to 75
50
13
75
to 90
00
75
50
to 105
50
38
25
to 120
00
00
00
to 135
50
63
75
to 150
00
25
50
to 165
50
88
25
to 180
00
13
00
Degree A Commuting Conditions
Good paved roads; climatic conditions, in relation to type and quality of vehicle, cause minimal discomfort during trip.
Degree B Commuting Conditions
Roads typically fair, but may be good for part of distance and possibly unpaved for short distances; climatic conditions during part of a season, in relation to type and quality of vehicle, result in moderate discomfort during trip.
Degree C Commuting Conditions
Fair to poor roads, unpaved for part of distance, climatic conditions during most of a season, in combination with such factors as type and quality of vehicle and terrain, result in unusual discomfort during trip.

§ 591.101Purpose.

This subpart prescribes the regulations authorized by section 5903 of title 5, United States Code, for the payment of uniform allowances.

§ 591.102Definitions.

Agency means an “Executive agency,” as defined in 5 U.S.C. 105.
Employee means an employee in or under an agency.
Category of employees means any group of employees designated by an agency that has the same basic uniform requirements.
Head of agency means the head of an agency or an official who has been delegated the authority to act for the head of the agency in the matter concerned.
Uniform means a specified article or articles of clothing that may include, but is not limited to, such items as shoes, boots, hats, shirts, slacks, skirts, or outerwear an employee is required by an agency to wear to provide a distinctive and easily identifiable appearance in performing his or her job. A “uniform” does not include protective equipment required for the employee's safety under 5 U.S.C. 7903 or normal business or work attire purchased at the discretion of the employee.
Year means any period of 12 consecutive months designated by an agency as the basis for applying the maximum uniform allowance rates established under this part.

§ 591.103Governmentwide maximum uniform allowance rate.

Unless a higher initial maximum uniform allowance rate is payable under § 591.104 to an employee who is required by statute, regulation, or an agency's written administrative procedures to wear a uniform, the head of each agency concerned, out of funds available, shall—
(a) Pay an allowance for a uniform not to exceed $800 a year; or
(b) Furnish a uniform at a cost not to exceed $800 a year.
(c) Any agency which provides a uniform allowance under paragraph (a) of this section must establish policies to administer the uniform allowance program, including uniform standards acceptable to the agency.

§ 591.104Higher initial maximum uniform allowance rate.

(a) The head of an agency may establish one or more initial maximum uniform allowance rates greater than the Governmentwide maximum uniform allowance rate established under § 591.103.
(b) A higher initial maximum uniform allowance rate established under this section may not exceed the average total uniform cost for the minimum basic uniform for the affected employees and, except as provided in paragraph (c) of this section, applies only to the year in which the employee becomes subject to a requirement to wear the uniform.
(c) An agency that establishes one or more higher initial maximum uniform allowance rates under this section may divide the cost of the minimum basic uniform and continue a higher initial maximum uniform allowance for the year following the year the employee first becomes subject to the requirement to wear the uniform, provided the agency publishes a notice of its intention to continue such payments in the Federal Register for notice and comment.
(d) Before establishing a higher initial maximum uniform allowance rate under this section, an agency shall publish in the Federal Register for notice and comment—
(1) A description and justification of the circumstances requiring a higher initial maximum uniform allowance rate;
(2) An estimate of the number of employees affected;
(3) The specific items required for the basic uniform and the average total uniform cost for the affected employees;
(4) The amount of the proposed higher initial maximum uniform allowance rate to be paid during the year the employee first becomes subject to the uniform requirement;
(5) The proposed effective date of the higher initial maximum uniform allowance rate; and,
(6) The intent of the agency (if any) to divide the cost of a minimum basic uniform and continue to make higher initial maximum basic uniform allowance payments in the year following the year the employee first becomes subject to the uniform requirement.
(e) So that OPM can evaluate agencies' use of this authority and provide the Congress and others with information regarding the use of a higher initial maximum uniform allowance rate, each agency concerned shall maintain such other records and submit to OPM such other reports and data as OPM shall require.
(f) When OPM determines that an agency is using this authority inappropriately, OPM may require its prior approval before that agency establishes any future higher initial maximum uniform allowance rate.
(g) An agency may increase a higher initial maximum uniform allowance rate only as a result of an increase in the average total uniform cost for the affected employees. Before effecting an increase under this paragraph, an agency shall follow the notice and comment procedures required by paragraph (d) of this section.
(h) To establish a higher initial maximum uniform allowance rate applicable to the initial year a new style or type of minimum basic uniform is required for a category of employees, an agency shall use the higher initial maximum uniform allowance procedures provided under this section.

§ 591.105xxx

Link to an amendment published at 91 FR 19063, Apr. 14, 2026.

§ 591.201Definitions.

In this subpart—
Agency means an Executive agency as defined in section 105 of title 5, United States Code, but does not include Government-controlled corporations.
Bureau of Labor Statistics (BLS) means the Bureau of Labor Statistics of the Department of Labor.
Commonwealth of the Northern Mariana Islands (CNMI) means the Commonwealth of the Northern Mariana Islands, which is part of the Guam/CNMI COLA area.
Consumer Expenditure Survey (CES) means the BLS survey of consumers and their expenditures.
Consumer Price Index (CPI) means the BLS survey of the change of consumer prices over time.
Cost-of-living allowance (COLA) means an allowance that the Office of Personnel Management (OPM) establishes under 5 U.S.C. 5941 at a location in a nonforeign area where living costs are substantially higher than in the Washington, DC, area.
Cost-of-living allowance area means a geographic area for which OPM has authorized a COLA. COLA areas are listed in § 591.207.
Detailed Expenditure Category (DEC) means the lowest level of expenditure shown in tabulated nationwide CES data.
Major Expenditure Group (MEG) means one of the nine major groups into which OPM categorizes expenditures. These categories are food, shelter and utilities, clothing, transportation, household furnishings and supplies, medical, education and communication, recreation, and miscellaneous.
Nonforeign area means one of the areas listed in § 591.205.
Office of Personnel Management (OPM) means the Office of Personnel Management.
Official worksite means the official location of an employee's position of record as determined under 5 CFR 531.605.
Position of record means an employee's official position (defined by grade, occupational series, employing agency, law enforcement officer status, and any other condition that determines coverage under a pay schedule (other than official worksite)), as documented on the employee's most recent Notification of Personnel Action (Standard Form 50 or equivalent) and the current position description, excluding any position to which the employee is temporarily detailed. For an employee whose change in official position is followed within 3 workdays by a reduction in force resulting in the employee's separation before he or she is required to report for duty in the new position, the position of record in effect immediately before the position change is deemed to remain the position of record through the date of separation.
Post differential means an allowance OPM establishes under 5 U.S.C. 5941 at a location in a nonforeign area where conditions of environment differ substantially from conditions of environment in the contiguous United States and warrant its payment as a recruitment incentive.
Post differential area means a geographic area for which OPM authorizes a post differential. Post differential areas are listed in § 591.231.
Primary Expenditure Group (PEG) means one of approximately 40 expenditure groups into which OPM categorizes expenditures. A PEG is the first level of categorization under the MEG.
Rate of basic pay means the rate of pay fixed by statute for the position held by an individual, including any supplement included as part of basic pay under this subpart by law or regulation (e.g., a special rate supplement under 5 CFR part 530, subpart C), before any deductions and exclusive of additional pay of any other kind, such as overtime pay, night differential, extra pay for work on holidays, or other allowances and differentials. For firefighters covered by 5 U.S.C. 5545b, straight-time pay for regular overtime hours is basic pay, as provided in § 550.1305(b) of this chapter.
Washington, DC, area or DC area means the District of Columbia; Montgomery County, MD; Prince Georges County, MD; Arlington County, VA; Fairfax County, VA; Prince William County, VA; and the independent cities of Alexandria, Fairfax, Falls Church, Manassas, and Manassas Park, Virginia; and in the context of certain survey items, includes additional geographic locations beyond these jurisdictions.

§ 591.202Why does the Government pay COLAs?

The Government pays COLAs as additional compensation to certain civilian Federal employees in specified nonforeign areas in consideration of higher living costs in the local area compared with living costs in the Washington, DC, area.

§ 591.203Why does the Government pay post differentials?

The Government pays post differentials to certain civilian Federal employees in specified nonforeign areas as a recruitment incentive based on conditions of environment in the local area compared with conditions in the continental United States. Post differentials are designed to attract persons from outside the area to work for the Federal Government in the post differential area.

§ 591.204Who can receive COLAs and post differentials?

(a) Agencies pay COLAs and post differentials authorized under this subpart to civilian Federal employees whose rates of basic pay are fixed by statute. The following pay plans are covered by this subpart:
(1) General Schedule,
(2) Veterans Health Administration (Department of Veterans Affairs),
(3) Foreign Service (including the Senior Foreign Service),
(4) Postal Service (where applicable under title 39, United States Code),
(5) Administrative law judges paid under 5 U.S.C. 5372,
(6) Senior Executive Service (including the Federal Bureau of Investigation and Drug Enforcement Administration Senior Executive Service),
(7) Senior-level and scientific or professional positions paid under 5 U.S.C. 5376, and
(8) Administrative appeals judges paid under 5 U.S.C. 5372b.
(b) At its sole discretion and consistent with the intent of 5 U.S.C. 5941, an agency may apply this subpart to other positions authorized by specific law.
(c) Agencies pay COLAs to employees covered by paragraphs (a) or (b) of this section and whose official worksite is in a COLA area as defined in § 591.207.
(d) Agencies pay post differentials to employees covered by paragraphs (a) or (b) of this section whose official worksite or detail to temporary duty is in a post differential area as defined in § 591.231 and who are eligible to receive a post differential under § 591.233.

§ 591.205Which areas are nonforeign areas?

(a) The nonforeign areas are States, commonwealths, territories, and possessions of the United States outside the 48 contiguous United States and any additional areas the Secretary of State designates as being within the scope of Part II of Executive Order 10000, as amended.
(b) The following areas are nonforeign areas:
(1) State of Alaska;
(2) State of Hawaii;
(3) American Samoa (including the island of Tutuila, the Manua Islands, and all other islands of the Samoa group east of longitude 171 degrees west of Greenwich, together with Swains Island);
(4) Commonwealth of Puerto Rico;
(5) Commonwealth of the Northern Mariana Islands;
(6) Howland, Baker, and Jarvis Islands;
(7) Johnston Atoll;
(8) Kingman Reef;
(9) Midway Atoll;
(10) Navassaa Island;
(11) Palmyra Atoll;
(12) Territory of Guam;
(13) United States Virgin Islands;
(14) Wake Atoll;
(15) Any small guano islands, rocks, or keys that, in pursuance of action taken under the Act of Congress, August 18, 1856, are considered as pertaining to the United States; and
(16) Any other islands outside of the contiguous 48 states to which the U.S. Government reserves claim.

§ 591.206How does OPM establish COLA areas?

(a) OPM designates, within nonforeign areas, areas where agencies pay employees a COLA by virtue of living costs that are substantially higher than those in the Washington, DC, area. In establishing the boundaries of COLA areas, OPM considers—
(1) The existence of a well-defined economic community,
(2) The availability of consumer goods and services,
(3) The concentration of Federal employees covered by this subpart, and
(4) Unique circumstances related to a specific location.
(b) If a department or agency wants OPM to consider establishing or revising the definition of a COLA area, the head of the department or agency or his or her designee must submit a request in writing to OPM.

§ 591.207Which areas are COLA areas?

OPM has established the following COLA areas:
(a) City of Anchorage, AK, and 80-kilometer (50-mile) radius by shortest route using paved roads when available, as measured from the Federal courthouse to the official duty station;
(b) City of Fairbanks, AK, and 80-kilometer (50-mile) radius by shortest route using paved roads when available, as measured from the Federal courthouse to the official duty station;
(c) City of Juneau, AK, and 80-kilometer (50-mile) radius by shortest route using paved roads when available, as measured from the Federal courthouse to the official duty station;
(d) Rest of the State of Alaska;
(e) City and County of Honolulu, HI;
(f) County of Hawaii, HI;
(g) County of Kauai, HI;
(h) County of Maui (including Kalawao County), HI;
(i) Commonwealth of Puerto Rico;
(j) Territory of Guam and Commonwealth of the Northern Mariana Islands; and
(k) U.S. Virgin Islands.

§ 591.208How does OPM establish COLA rates?

OPM establishes COLA rates based on price differences between the COLA area and the Washington, DC, area, plus an adjustment factor. OPM expresses price differences as indexes.
(a) OPM computes price indexes for various categories of consumer expenditures.
(b) OPM combines the price indexes using Consumer expenditure weights to produce an overall price index for the COLA area.
(c) To combine overall price indexes for COLA areas with multiple survey areas, OPM uses employment weights to combine overall price indexes by survey area for COLA areas. The COLA areas that have multiple survey areas are listed in § 591.215(b).
(d) OPM adds an adjustment factor to the overall price index for the COLA area.

§ 591.209What is a price index?

(a) The price index is the COLA area price divided by the DC area price and multiplied by 100.
(b) Example:
COLA Area Average Price for Item A = $1.233
DC Area Average Price for Item A = $1.164
Computation:
$1.233/$1.164 = 1.0592783
1.0592783 × 100 = 105.92783.
(c) In the case of the final index, OPM rounds the index to two decimal places.

§ 591.210What are weights?

(a) A weight is the relative importance or share of a subpart of a group compared with the total for the group. A weight is frequently expressed as a percentage. For example, in a pie chart, each wedge has a percentage that represents its relative importance or the size of the wedge compared with the whole pie.
(b) OPM uses two kinds of weights: Consumer expenditure weights and employment weights.
(1) Consumer expenditure weights. The consumer expenditure weight for a category of expenditures (e.g., Food) is the relative importance or share (often expressed as a percentage) of that category in terms of total consumer expenditures. OPM derives consumer expenditure weights from the tabulated results of the Bureau of Labor Statistics (BLS) Consumer Expenditure Survey (CES).
(2) Employment weights. The employment weight is the relative employment population of the survey area compared with the employment population of the COLA area as a whole. OPM uses the number of General Schedule employees in the survey area to compute employment weights. OPM uses these employment weights as described in § 591.216(b).

§ 591.211What are the categories of consumer expenditures?

OPM uses three different types of categories: Major expenditure groups, primary expenditure groups, and detailed expenditure categories.
(a) Major expenditure groups. OPM groups expenditures into nine major expenditure groups (MEGs). These categories are food, shelter and utilities, clothing, transportation, household furnishings and supplies, medical, education and communication, recreation, and miscellaneous.
(b) Primary expenditure groups. OPM subdivides each MEG into primary expenditure groups (PEGs). There are approximately 40 PEGs.
(c) Detailed expenditure categories. OPM further subdivides each PEG into other categories down to the detailed expenditure categories (DECs), which are generally equivalent to the most detailed level of tabulated CES categories. OPM classifies each DEC into one of the PEGs to aggregate DECs with similar demand and cost characteristics into PEGs. Alternatively, OPM may remove the DEC entirely from the list of expenditures. Therefore, the classification of the DECs into PEGs and sub-PEGs does not necessarily follow that used in published CES tables.

§ 591.212How does OPM select survey items?

(a) OPM selects a sufficient number of items to represent PEGs and reduce overall price index variability. In selecting these items, OPM applies the following guidelines. The item should be—
(1) Relatively important ( i.e., represent a DEC with a relatively large weight) within the PEG;
(2) Relatively easy to find in both COLA and DC areas;
(3) Relatively common, i.e., what people typically buy;
(4) Relatively stable over time, e.g., not a fad item; and
(5) Subject to similar supply and demand functions.
(b) To the extent practical, the items OPM surveys in the COLA area must be identical to the items that OPM surveys in the DC area or be of closely similar quality and quantity, with quantity adjustments as necessary. An example of a quantity adjustment is converting prices for 10 and 12 oz. packages to a price per pound.
(c) Within any DEC, OPM may specify items that differ in quality and quantity from other items specified for the same DEC. However, when OPM compares prices for such items between the COLA area and the DC area, OPM compares prices of like products.

§ 591.213What prices does OPM collect?

(a) OPM surveys the price charged to the consumer at the time of the survey. The price includes any sales, excise, or general business tax passed on to the consumer at the time of sale and any discounts, mark-downs, or “sales” in progress at the time the price was collected.
(b) Exceptions: (1) OPM does not collect coupon prices, clearance prices, going-out-of-business prices, or area-wide distress sale prices.
(2) OPM prices automobiles at dealers and obtains the sticker ( i.e., non-negotiated) price for the model and specified options. The prices are the manufacturer's suggested retail price (including options), destination charges, additional shipping charges, appropriate dealer-added items or options, dealer mark-up, and taxes.
(3) OPM estimates prices for selected items, such as health insurance and K-12 education, based on employee usage of the item. For example, OPM estimates health insurance prices based on the employee's share of the premium costs and weights reflecting Federal enrollment, as reported in OPM's Central Personnel Data File, in the various plans available to Federal employees in each area.

§ 591.214How does OPM collect prices?

(a) OPM collects most prices by visiting or calling retail outlets in each survey area and observing or verbally obtaining the item prices.

(b) OPM prices some items by catalog, Internet, or a similar source. Other items, not normally sold within an area, may be priced in a different area. In either case, the price of such items includes any applicable taxes, shipping, and handling charges. When an item is normally sold within an area but is not available at the time of survey, OPM may, on a case-by-case basis, use the price of the item in a neighboring survey or COLA area.

§ 591.215Where does OPM collect prices in the COLA and DC areas?

(a) Survey areas. Each COLA area has one survey area, except Hawaii County, HI, and the U.S. Virgin Islands COLA areas. Hawaii County has two survey areas: the Hilo area and the Kailua Kona/Waimea area. The U.S. Virgin Islands also has two survey areas: the Island of St. Croix and the Islands of St. Thomas and St. John. The Washington, DC, area has three survey areas: the District of Columbia, the Maryland suburbs of the District of Columbia, and the Virginia suburbs of the District of Columbia. OPM collects non-housing data throughout the survey area, and for selected items such as golf, snow skiing, and air travel, OPM collects non-housing data in additional geographic locations. OPM may collect housing data throughout the survey area or in specific housing data collection areas. The following table shows the survey areas:
Survey Areas
COLA and reference areas
Survey areas and geographic coverage
Anchorage
City of Anchorage. 1
Fairbanks
Fairbanks/North Pole area. 1
Juneau
Juneau/Mendenhall/Douglas area. 1
Rest of Alaska
See paragraph (c) of this section.
Honolulu
City and County of Honolulu.
Hawaii County
Hilo area. 1
Kailua Kona/Waimea area.
Kauai
Kauai Island.
Maui
Maui Island.
Guam & CNMI
Guam.
Puerto Rico
San Juan/Caguas area. 2
U.S. Virgin Islands
St. Croix.
St. Thomas/St. John area. 3
Washington, DC-DC
District of Columbia. 1
Washington, DC-MD
Montgomery County and Prince Georges County. 1
Washington, DC-VA
Arlington County, Fairfax County, Prince William County, City of Alexandria, City of Fairfax, City of Falls Church, City of Manassas, and City of Manassas Park. 1
1 For selected items, such as golf, snow skiing, and air travel, these survey areas may include additional geographic locations beyond these jurisdictions.
2 OPM may collect housing data in other areas in Puerto Rico that have a significant concentration of Federal employees stationed in those areas.
3 OPM collects housing data in St. John. OPM also may collect non-housing data from selected outlets in St. John.
(b) Rest of the State of Alaska COLA area. OPM may collect survey data onsite, use alternative indicators of relative living costs (e.g., price and cost information published by the University of Alaska), or both. If the use of alternative indicators would result in a COLA rate reduction, OPM will conduct onsite surveys in one or more locations in the Rest of the State of Alaska COLA area, before making a reduction, to ensure that the reduction is warranted.
(c) Determining Survey Coverage. To aid OPM in determining survey coverage, OPM may from time to time conduct surveys of Federal employees in the COLA areas and/or the Washington, DC, area to determine where employees shop and what they spend on certain goods or services and to collect other information related to the price surveys and the calculation of price indexes.

§ 591.216How does OPM combine survey data for the DC area and for COLA areas with multiple survey areas?

(a) Washington, DC, area. For each survey item except shelter, OPM averages separately the prices collected in each of the DC survey areas identified in § 591.215(a) and then averages these average prices together using equal weights to compute an overall average by item for the DC area.

(b) COLA areas with multiple survey areas. OPM computes weighted average indexes at the item, PEG, MEG, and/or overall level by using the corresponding indexes and Federal employment weights from each survey area within the COLA area.

§ 591.217In which outlets does OPM collect prices?

OPM collects prices in popular outlets in each survey area. OPM selects these outlets based on their proximity to the housing data collection areas, accessibility by road, physical size, advertising, and other characteristics that reflect sales volume. To the extent practical, OPM prices like items in the same types of outlets in the COLA areas and the Washington, DC, area. As warranted, OPM also may conduct point-of-purchase surveys and select outlets based on the results of those surveys.

§ 591.218How does OPM compute price indexes?

Except for shelter and energy utilities, OPM averages by item the prices collected in each survey area. For the Washington, DC, area, OPM computes a simple average for each item based on the average prices from each DC survey area. On an item-by-item basis, OPM divides the COLA survey area average price by the DC average price and produces a price index.

§ 591.219How does OPM compute shelter price indexes?

(a) In addition to rental and rental equivalence prices and/or estimates, OPM obtains for each unit surveyed information about the important characteristics of the unit, such as size, number of bathrooms, and other amenities that reflect the quality of the unit.

(b) OPM then uses these characteristics and rental prices and/or estimates in hedonic regressions (a type of multiple regression) to compute for each COLA survey area the price index for rental and/or rental equivalent units of comparable quality and size between the COLA survey area and the Washington, DC, area.

§ 591.220How does OPM calculate energy utility cost indexes?

(a) OPM calculates energy utility cost indexes based on the relative cost of maintaining a standard size dwelling in each area at a given ambient temperature and the cost of other energy uses. Although the dwelling size may vary from one COLA survey area to another, OPM compares the utility cost for the same size dwelling in the COLA survey area and the Washington, DC, area.
(b) OPM applies the following six-step process to compute a cost index(es) for heating and cooling a standard home to a given ambient temperature and to combine the cost index(es) by energy type (e.g., electricity and natural gas) with cost indexes for other energy uses.
(1) Step 1. OPM obtains technical information about the requirements by major energy type for heating and cooling a standard size dwelling, built according to current local building practices and codes in each area, given local climatic conditions (e.g., seasonal temperature and humidity). OPM also obtains similar information for use of energy types in other household operations (e.g., hot water, cooking, cleaning, recreation).
(2) Step 2. OPM obtains from the shelter survey, a survey of Federal employees, or other appropriate sources, information on dwelling size and the types and prevalence of heating and cooling equipment and energy types (e.g., electricity, gas, and oil) in each area.
(3) Step 3. OPM computes estimates of total home energy requirements by energy type attributable to heating and cooling plus all other household energy uses for the COLA survey area and the Washington, DC, area.
(4) Step 4. OPM surveys utility prices for each major energy type appropriate to the area.
(5) Step 5. OPM combines the above data to produce for each COLA survey area the cost of maintaining the standard size dwelling at a given ambient temperature and the cost of other household energy uses.
(6) Step 6. OPM compares the COLA survey area cost with the DC area cost to produce a price index.

§ 591.221How does OPM compute the consumer expenditure weights it uses to combine price indexes?

OPM uses the following ten-step process to compute consumer expenditure weights:
(a) Step 1. OPM obtains the latest BLS tabulated CES data nationwide and for the Washington, DC, area.
(b) Step 2. In both the nationwide and DC area tabulated data, OPM replaces the homeowners' expenditures for shelter with estimated rental values of owned homes that are available elsewhere in tabulated CES data. Note: These replacements are consistent with the rental equivalence approach described in § 591.219.
(c) Step 3. OPM selects the central income groups in the nationwide CES tabulation.
(d) Step 4. OPM calculates the expenditure shares ( i.e., percentages) for each central income group by dividing each of its DEC expenditures by total expenditures for the income group. OPM also calculates expenditure shares for total nationwide expenditures by dividing each nationwide DEC expenditure by total nationwide expenditures.
(e) Step 5. OPM computes a democratic distribution of expenditure shares by averaging the central income groups' shares at each DEC and higher level of aggregation.
(f) Step 6. OPM computes a set of ratios by dividing each expenditure share of the nationwide democratic distribution by the corresponding expenditure share of the total national distribution.
(g) Step 7. OPM computes estimated expenditures for Washington DC for each DC DEC and higher level of aggregation that BLS reported by multiplying the reported expenditure by the corresponding ratio derived in Step 6.
(h) Step 8. For each DC DEC and higher level of aggregation that BLS did not report, OPM computes expenditures for DC by distributing the DC expenditure calculated in step 7 using the distribution of expenditure shares derived in step 5.
(i) Step 9. As described in § 591.211(c), OPM classifies each DEC and aggregate into PEGs.
(j) Step 10. OPM computes expenditure weights by dividing each DEC or aggregate by the total expenditure derived from the DC expenditure computed in step 8. Therefore, the sum of the MEGs, PEGs, and DECs, will separately total 100, i.e., so that all consumer expenditures in the original tabulation are accounted for.

§ 591.222How does OPM use the expenditure weights to combine price indexes?

OPM uses a three-step process to combine price indexes.
(a) Step 1. For each DEC represented by one or more items for which OPM could make valid price comparisons (e.g., OPM was able to collect representative prices in both the COLA and DC areas), OPM computes the unweighted geometric average (the nth root of the product of n numbers) of the price index(es) of all item(s) representing the DEC.
(b) Step 2. OPM multiplies the price index for each DEC by its expenditure weight, sums the cross products, and divides by the sum of the weights used in the calculation. This produces a price index for the level of aggregation (e.g., PEG or sub-PEG) in which the DEC is categorized.
(c) Step 3. OPM repeats the process described in Step 2 at each level of aggregation within the PEG to produce a price index for the PEG, at the PEG level to produce an index for the MEG, and at the MEG level to produce the overall price index for the COLA area.

§ 591.223When does OPM conduct COLA surveys?

(a) OPM conducts a survey in each COLA area once every 3 years on a rotational basis and surveys the Washington, DC, area concurrently with each COLA area survey. The order of the COLA area surveys is as follows:
(1) Year 1. All COLA areas in the Commonwealth of Puerto Rico and the U.S. Virgin Islands.
(2) Year 2. All COLA areas in the State of Alaska, except as provided in paragraph (b)(2) of this section.
(3) Year 3. All COLA areas in the State of Hawaii and the Territory of Guam and CNMI.
(b) Exceptions:
(1) Nothing in this subpart precludes OPM from conducting interim surveys or implementing some other change in response to conditions caused by a natural disaster or similar emergency, provided OPM publishes a notice or rule in the Federal Register explaining the change and the reason(s) for it.
(2) As provided in § 591.215(c), OPM does not conduct surveys in the Rest of the State of Alaska COLA area unless COLA rate reductions appear warranted.

§ 591.224How does OPM adjust price indexes between surveys?

(a) OPM adjusts price indexes between the triennial surveys in each COLA area that is not surveyed in that year. To do this, OPM uses the annual or biennial change in the Consumer Price Index (CPI) for the COLA area relative to the annual or biennial change in the CPI for the Washington, DC, area. OPM uses the annual change for those areas surveyed the preceding year. OPM uses the biennial change for those areas surveyed 2 years before.
(b) Paragraph (a) of this section applies beginning with the effective date of the results of the 2005 survey conducted in Puerto Rico and the U.S. Virgin Islands.
(c) Based on additional housing data that may be collected before the 2005 survey conducted in Puerto Rico and the U.S. Virgin Islands, OPM will adjust as warranted the price indexes and COLA rates for Puerto Rico, the U.S. Virgin Islands, and the COLA areas in the State of Alaska. OPM will implement any such adjustments on a one-time basis on the effective date of the results of the 2004 surveys conducted in Hawaii and Guam/CNMI, and subject to § 591.228. OPM will publish such adjustments as provided in § 591.229.

§ 591.225Which CPIs does OPM use?

OPM uses the following CPIs:
(a) For the Washington, DC, area—the BLS Consumer Price Index, All Urban Consumers (CPI-U);
(b) For all COLA areas in the State of Alaska—the BLS CPI-U for Anchorage, AK;
(c) For all COLA areas in the State of Hawaii and for Guam and the CNMI—the BLS CPI-U for Honolulu, HI; and
(d) For Puerto Rico and the U.S. Virgin Islands—the Puerto Rico CPI as produced by the Puerto Rico Department of Work and Human Resources.

§ 591.226How does OPM apply the CPIs?

(a) OPM uses a three-step process to adjust price indexes by relative annual or biennial changes in the CPIs. For steps 1 and 2, OPM computes the annual change by dividing the CPI from 1 year after the survey by the CPI from the time of the survey. OPM computes the biennial change by dividing the CPI from 2 years after the survey by the CPI from the time of the survey.
(1) Step 1. OPM computes the annual or biennial CPI change for the COLA area.
(2) Step 2. OPM computes the annual or biennial CPI change for the DC area.
(3) Step 3. OPM multiplies the COLA area price index from the last survey by the COLA area CPI change computed in step 1 divided by the DC area CPI change computed in step 2. The adjusted price index is rounded to the second decimal place.
(b) Example:
2008
2009
COLA Area CPI
172.2
174.7
DC Area CPI
159.7
161.9
COLA Area Survey Index
117.33
( 1 )
COLA Area CPI Adjusted Index
( 2 )
117.42
1 No survey.
2 N/A
Computation:
117.33 × (174.7/172.2)/(161.9/159.7) = 117.4159, which would round to 117.42.

§ 591.227What adjustment factors does OPM add to the price indexes?

OPM adds to the price index an adjustment factor that reflects differences in need, access to and availability of goods and services, and quality of life in the COLA area relative to the DC area. The following table shows the adjustment factor for each area:
COLA area
Amount
Anchorage, AK
7.0
Fairbanks, AK
9.0
Juneau, AK
9.0
Rest of the State of Alaska
9.0
City and County of Honolulu, HI
5.0
Hawaii County, HI
7.0
Kauai County, HI
7.0
Maui County, HI
7.0
Guam and CNMI
9.0
Commonwealth of Puerto Rico
7.0
U.S. Virgin Islands
9.0
1 Amount added to the price index.

§ 591.228How does OPM convert the price index plus adjustment factor to a COLA rate?

(a) OPM converts the price index plus the adjustment factor to a COLA rate as shown in the following table:
Price index plus adjustment factor
COLA rate subject to paragraph (b) of this section
Equal to or greater than 124.50
25 percent.
Equal to or greater than 102.00 but less than 124.50
Price index plus the adjustment factor, minus 100, expressed to the nearest whole percent.
Less than 102.00
0 percent.
(b) This section is applicable on an area-by-area basis beginning with the effective date of the results of the first survey conducted in each area.
(c) OPM may reduce the COLA rate in any area by no more than 1 percentage point in any 12-month period. Any reduction in the COLA rate for any COLA area cannot be effective until the effective date of the first survey conducted in Hawaii and Guam and CNMI under these regulations.

§ 591.229How does OPM inform agencies and employees of COLA rate changes?

OPM publishes COLA area survey summary reports, MEG and PEG indexes, and COLA rates in the Federal Register. OPM makes survey data and other information available to the public to the extent authorized by the Freedom of Information Act and the Privacy Act.

§ 591.230When does OPM establish post differential areas?

(a) OPM establishes post differential areas in response to agency requests when—
(1) Conditions of environment within the post differential area differ substantially from conditions of environment in the continental United States, and
(2) The major Federal employers within the area believe payment of a post differential is warranted as a recruitment incentive to attract candidates from outside the post differential area to work for the Government in the post differential area.
(b) If a department or agency wants OPM to consider establishing or revising the definition of a post differential area, the head of the department or agency or his or her designee must submit a request in writing to OPM.

§ 591.231Which areas are post differential areas?

OPM has established the following post differential areas:
(a) American Samoa as defined in § 591.205,
(b) Territory of Guam,
(c) Commonwealth of the Northern Mariana Islands,
(d) Johnston Atoll (including Sand Island),
(e) Midway Atoll, and
(f) Wake Atoll.

§ 591.232How does OPM establish and review post differentials?

(a) OPM establishes a post differential by rulemaking if Government agencies require it for recruitment purposes and if one or more of the following conditions exist:
(1) Extraordinarily difficult living conditions,
(2) Excessive physical hardship, and/or
(3) Notably unhealthful conditions.
(b) OPM periodically reviews with Federal agencies whether conditions of environment have changed in the post differential areas and whether payment of the post differential continues to be warranted as a recruitment incentive.

§ 591.233Who can receive a post differential?

An employee must meet all of the following conditions to be eligible to receive a post differential:
(a) The employee must be a citizen or national of the United States,
(b) The employee's official worksite or detail to temporary duty must be in the post differential area, and
(c) Immediately prior to being assigned to duty in the post differential area, the employee must have maintained his or her actual place(s) of residence outside the post differential area for an appropriate period of time (generally at least 1 year or more), except as provided in § 591.234.

§ 591.234Under what circumstances may people recruited locally receive a post differential?

(a) Current residents of the area qualify for a post differential if they were originally recruited from outside the differential area and have been in substantially continuous employment by the United States or by U.S. firms, interests, or organizations.
(b) Examples of persons recruited locally but eligible to receive a post differential include, but are not limited to—
(1) Those who were originally recruited from outside the area and have been in substantially continuous employment by other Federal agencies, contractors of Federal agencies, or international organizations in which the U.S. Government participates and whose conditions of employment provide for their return transportation to places outside the post differential area,
(2) Those who are temporarily present in the post differential area for travel or formal study at the time they are hired and have maintained actual places of residence outside the area for an appropriate period of time, and
(3) Those who are discharged from U.S. military service in the differential area to accept employment with a Federal agency and have maintained actual places of residence outside the differential area for an appropriate period of time.

§ 591.235When do COLA and post differential payments begin?

(a) Agencies begin paying an employee a COLA or post differential on the effective date of the change in the employee's official worksite to an official worksite within the COLA or post differential area or, in the case of local recruitment, on the effective date of the appointment.

(b) For an employee detailed to temporary duty in a post differential area and who is otherwise eligible for a post differential, agencies must begin paying a post differential after 42 consecutive calendar days of temporary duty in the post differential area.

§ 591.236When do COLA and post differential payments end?

Subject to § 591.237(a), agencies stop paying an employee a COLA or post differential on—
(a) Separation,
(b) The effective date of assignment or transfer to a new official worksite outside the COLA or post differential area, or
(c) In the case of an employee on detail to temporary duty in a post differential area, the ending date of the detail.

§ 591.237Under what circumstances may employees on leave or travel receive a COLA and/or post differential?

(a) An employee on leave or travel may receive a COLA or post differential only if the agency anticipates that the employee will return to duty in the area. Exceptions: If the employee does not return to duty in the area, the agency may still pay a COLA and/or a post differential for the period of leave or travel, subject to paragraph (b) of this section, if the agency determines that—
(1) It is in the public interest not to return the employee to the official worksite, or
(2) The employee will not return because of compelling personal reasons or circumstances over which the employee has no control.
(b) Post differentials. Agencies may pay a post differential to an employee only during the employee's first 42 consecutive calendar days of absence from the post differential area.

§ 591.238How do agencies pay COLAs and post differentials?

(a) Agencies pay COLAs and post differentials as a percentage of an employee's hourly rate of basic pay, including a retained rate of pay under 5 U.S.C. 3594(c) or 5363, for those hours during which the employee receives basic pay. This includes all periods of paid leave, detail, or travel status outside the COLA or post differential area.

(b) Agencies pay employees eligible for both a COLA and a post differential the full amount of the COLA, plus so much of the post differential as will not cause the combined total of the COLA and post differential to exceed 25 percent of the hourly rate of basic pay.

§ 591.239How do agencies treat COLAs and post differentials for the purpose of overtime pay and other entitlements?

(a) Agencies include COLAs in the employee's straight time rate of pay and include COLAs and post differentials in an employee's regular rate of pay for computing overtime pay entitlements for nonexempt employees under the Fair Labor Standards Act of 1938, as amended.
(b) Agencies may not include a COLA or post differential as part of an employee's rate of basic pay for the purpose of computing entitlements to overtime pay, retirement, life insurance, or any other additional pay, COLA, or post differential under title 5, United States Code.
(c) Payment of a COLA or post differential is not an equivalent increase in pay within the meaning of 5 U.S.C. 5335.

§ 591.240How are agency and employee representatives involved in the administration of the COLA and post differential programs?

(a) OPM may establish a COLA Advisory Committee in each COLA survey area. The committees are composed of agency and employee representatives from the COLA survey area and one or more representatives from OPM.

(b) To the extent practical, the COLA Advisory Committees coordinate and work with the Survey Implementation Committee established pursuant to Caraballo, et al. v. United States, No. 1997-0027 (D.V.I).

§ 591.241What are the key activities of the COLA Advisory Committees?

(a) The COLA Advisory Committees may—
(1) Advise and assist OPM in planning living-cost surveys;
(2) Provide or arrange for observers for data collection during living-cost surveys;
(3) Advise and assist OPM in the review of survey data;
(4) Advise OPM on its administration of the COLA program, including survey methodology; and
(5) Assist OPM in disseminating information to affected employees about the living-cost surveys and the COLA program.
(b) The committees also may advise OPM on special situations or conditions, such as hurricanes and earthquakes, as they relate to OPM's authority under § 591.223(b) to conduct interim surveys or implement some other change in response to conditions caused by a natural disaster or similar emergency.

68 sections

Cite this law

ALLOWANCES AND DIFFERENTIALS (U.S.C.). Retrieved via LawPlayer, https://lawplayer.com/us/act/cfr-title-5-part-591

United States government works (U.S. Code, Code of Federal Regulations) are in the public domain under 17 U.S.C. § 105.

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