What is a Local Market Supplement (LMS) and how does it work?
• An LMS replaces locality pay and special salary rates under the GS system. • Employees must have a rating of record of Level 2 (Fair) or higher. • At least once a year, DoD reviews each LMS and makes appropriate adjustments. • Factors reviewed in making LMS determinations: • Mission requirements • Labor-market conditions • Availability of funds • Allowances and differentials, such as those paid to employees overseas and in Alaska and Hawaii • Similar pay adjustments received by employees of other federal agencies • Other relevant factors.
