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Non-Foreign Area Cost of Living Allowance (COLA ...

1 Non-Foreign Area Cost of Living Allowance (COLA) TransformationJuly 2009 UNITED STATES OFFICE OF PERSONNEL MANAGEMENTNon-Foreign AreaCost of Living Allowance (COLA) TransformationJuly 2009 UNITED STATES OFFICE OF PERSONNEL MANAGEMENT 2 How Are COLA & Locality Pay Different? Cost-of- Living Allowance (COLA) compensates Federal employees for differences in prices of goods and services in each COLA area compared to Washington, DC Locality pay compensates Federal employees for the differences in the cost of labor in each locality pay area compared to the General Schedule3 COLA Overview Enacted in 1948 Paid to about 52,000 Federal white-collar and Postal Service employees More than 14,000 are in Puerto Rico Compares Living costs between Washington, DC, and each COLA area Can go up, but may not exceed 25 percent Can go down, limited to 1 percent per year Not subject

2. How Are COLA & Locality Pay Different? • Cost-of-Living Allowance (COLA) compensates Federal employees for differences in prices of goods and services in each COLA area compared

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