[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 22USC3968]
TITLE 22--FOREIGN RELATIONS AND INTERCOURSE
CHAPTER 52--FOREIGN SERVICE
SUBCHAPTER IV--COMPENSATION
Sec. 3968. Local compensation plans
(a) Establishment; rates of pay; leaves of absence; supplemental
payments; transfer from Civil Service Retirement and Disability
Fund
(1) The Secretary shall establish compensation (including position
classification) plans for foreign national employees of the Service and
United States citizens employed under section 3951(c)(1) of this title.
To the extent consistent with the public interest, each compensation
plan shall be based upon prevailing wage rates and compensation
practices (including participation in local social security plans) for
corresponding types of positions in the locality of employment, except
that such compensation plans shall provide for payment of wages to
United States citizens at a rate which is no less than the then
applicable minimum wage rate specified in section 206(a)(1) of title 29.
Any compensation plan established under this section may include
provision for (A) leaves of absence with pay for employees in accordance
with prevailing law and employment practices in the locality of
employment without regard to any limitation contained in section 6310 of
title 5, (B) programs for voluntary transfers of such leave and
voluntary leave banks, which shall, to the extent practicable, be
established in a manner consistent with the provisions of subchapters
III and IV, respectively, of chapter 63 of title 5, and (C) payments by
the Government and employees to (i) a trust or other fund in a financial
institution in order to finance future benefits for employees, including
provision for retention in the fund of accumulated interest and
dividends for the benefit of covered employees; or (ii) a Foreign
Service National Savings Fund established in the Treasury of the United
States, which (I) shall be administered by the Secretary, at whose
direction the Secretary of the Treasury shall invest amounts not
required for the current needs of the Fund; and (II) shall be public
monies, which are authorized to be appropriated and remain available
without fiscal year limitation to pay benefits, to be invested in public
debt obligations bearing interest at rates determined by the Secretary
of the Treasury taking into consideration current average market yields
on outstanding marketable obligations of the United States of comparable
maturity, and to pay administrative expenses. For United States citizens
under a compensation plan, the Secretary shall define those allowances
and benefits provided under United States law which shall be included as
part of the total compensation package, notwithstanding any other
provision of law, except that this section shall not be used to override
United States minimum wage requirements, or any provision of the Social
Security Act [42 U.S.C. 301 et seq.] or title 26.
(2) The Secretary may make supplemental payments to any civil
service annuitant who is a former foreign national employee of the
Service (or who is receiving an annuity as a survivor of a former
foreign national employee of the Service) in order to offset exchange
rate losses, if the annuity being paid such annuitant is based on--
(A) a salary that was fixed in a foreign currency that has
appreciated in value in terms of the United States dollar; and
(B) service in a country in which (as determined by the
Secretary) the average retirement benefits being received by
individuals who retired from competitive local organizations are
superior to the local currency value of civil service annuities plus
any other retirement benefits payable to foreign national employees
who retired during similar time periods and after comparable careers
with the Government.
(3)(A) Whenever a foreign national employee so elects during a one-
year period established by the Secretary of State with respect to each
post abroad, the Secretary of the Treasury (at the direction of the
Secretary of State) shall transfer such employee's interest in the Civil
Service Retirement and Disability Fund to a trust or other local
retirement plan certified by the United States Government under a local
compensation plan established for foreign national employees pursuant to
this section (excluding local social security plans).
(B) For purposes of subparagraph (A), the phrase ``employee's
interest in the Civil Service Retirement and Disability Fund'' means the
total contributions of the employee and the employing agency with
respect to such employee, pursuant to sections 8331(8) and 8334(a)(1) of
title 5, respectively, plus interest at the rate provided in section
8334(e)(3) of such title.
(C) Any such transfer shall void any annuity rights or entitlement
to lump-sum credit under subchapter III of chapter 83 of such title.
(b) Employment programs
For the purpose of performing functions abroad, any agency or other
Government establishment (including any establishment in the legislative
or judicial branch) may administer employment programs for its employees
who are foreign nationals, are United States citizens employed in the
Service abroad who were hired while residing abroad, or are family
members of Government employees assigned abroad, in accordance with the
applicable provisions of this chapter.
(c) Regulations
The Secretary of State may prescribe regulations governing the
establishment and administration of local compensation plans under this
section by all agencies and other Government establishments.
(Pub. L. 96-465, title I, Sec. 408, Oct. 17, 1980, 94 Stat. 2090; Pub.
L. 98-164, title I, Sec. 127(a), Nov. 22, 1983, 97 Stat. 1026; Pub. L.
101-246, title I, Sec. 141(a), Feb. 16, 1990, 104 Stat. 35; Pub. L. 102-
138, title I, Secs. 148, 152, Oct. 28, 1991, 105 Stat. 670, 672; Pub. L.
103-236, title I, Sec. 180(a)(4), Apr. 30, 1994, 108 Stat. 415; Pub. L.
106-113, div. B, Sec. 1000(a)(7) [div. A, title III, Sec. 322], Nov. 29,
1999, 113 Stat. 1536, 1501A-436; Pub. L. 107-228, div. A, title III,
Sec. 313, Sept. 30, 2002, 116 Stat. 1378.)
References in Text
The Social Security Act, referred to in subsec. (a)(1), is act Aug.
14, 1935, ch. 531, 49 Stat. 620, as amended, which is classified
generally to chapter 7 (Sec. 301 et seq.) of Title 42, The Public Health
and Welfare. For complete classification of this Act to the Code, see
section 1305 of Title 42 and Tables.
This chapter, referred to in subsec. (b), was in the original ``this
Act'', meaning Pub. L. 96-465, Oct. 17, 1980, 94 Stat. 2071, as amended,
known as the Foreign Service Act of 1980, which is classified
principally to this chapter (Sec. 3901 et. seq.). For complete
classification of this Act to the Code, see Short Title note set out
under section 3901 of this title and Tables.
Amendments
2002--Subsec. (a)(1). Pub. L. 107-228 in third sentence substituted
``payments by the Government and employees to (i) a trust or other fund
in a financial institution in order to finance future benefits for
employees, including provision for retention in the fund of accumulated
interest and dividends for the benefit of covered employees; or (ii) a
Foreign Service National Savings Fund established in the Treasury of the
United States, which (I) shall be administered by the Secretary, at
whose direction the Secretary of the Treasury shall invest amounts not
required for the current needs of the Fund; and (II) shall be public
monies, which are authorized to be appropriated and remain available
without fiscal year limitation to pay benefits, to be invested in public
debt obligations bearing interest at rates determined by the Secretary
of the Treasury taking into consideration current average market yields
on outstanding marketable obligations of the United States of comparable
maturity, and to pay administrative expenses.'' for ``payments by the
Government and employees to a trust or other fund in a financial
institution in order to finance future benefits for employees, including
provision for retention in the fund of accumulated interest for the
benefit of covered employees.''
1999--Subsec. (a)(1). Pub. L. 106-113, in last sentence, struck out
``(A) provide such citizens with a total compensation package (including
wages, allowances, benefits, and other employer payments, such as for
social security) that has the equivalent cost to that received by
foreign national employees occupying a similar position at that post and
(B)'' after ``Secretary shall'' and substituted ``the total compensation
package'' for ``this total compensation package''.
1994--Subsec. (a)(1). Pub. L. 103-236, Sec. 180(a)(4)(D), inserted
at end ``For United States citizens under a compensation plan, the
Secretary shall (A) provide such citizens with a total compensation
package (including wages, allowances, benefits, and other employer
payments, such as for social security) that has the equivalent cost to
that received by foreign national employees occupying a similar position
at that post and (B) define those allowances and benefits provided under
United States law which shall be included as part of this total
compensation package, notwithstanding any other provision of law, except
that this section shall not be used to override United States minimum
wage requirements, or any provision of the Social Security Act or title
26.''
Pub. L. 103-236, Sec. 180(a)(4)(B), (C), in second sentence struck
out ``employed in the Service abroad who were hired while residing
abroad and to those family members of Government employees who are paid
in accordance with such plans'' after ``United States citizens'' and in
third sentence struck out ``foreign national'' before ``employees''
wherever appearing.
Pub. L. 103-236, Sec. 180(a)(4)(A), inserted first sentence and
struck out former first sentence which read as follows: ``The Secretary
shall establish compensation (including position classification) plans
for foreign national employees of the Service, United States citizens
employed in the Service abroad who were hired while residing abroad, and
for United States citizens employed in the Service abroad who are family
members of Government employees.''
1991--Subsec. (a)(1). Pub. L. 102-138, Sec. 152(a), inserted
``United States citizens employed in the Service abroad who were hired
while residing abroad,'' after ``employees of the Service,'' and ``to
United States citizens employed in the Service abroad who were hired
while residing abroad and'' after ``payment of wages''.
Pub. L. 102-138, Sec. 148, added cl. (B) and redesignated former cl.
(B) as (C).
Subsec. (b). Pub. L. 102-138, Sec. 152(b), inserted ``, are United
States citizens employed in the Service abroad who were hired while
residing abroad,'' after ``foreign nationals''.
1990--Subsec. (a)(3). Pub. L. 101-246 added par. (3).
1983--Subsec. (a)(1). Pub. L. 98-164 designated existing provisions
as cl. (A) and added cl. (B).
Date of Transfer From Civil Service Retirement and Disability Fund
Section 141(c) of Pub. L. 101-246 provided that: ``The transfer of
an employee's interest in the Civil Service Retirement and Disability
Fund shall occur after October 1, 1990.''
Foreign National Pay Plans
Pub. L. 96-60, title I, Sec. 107(a), Aug. 15, 1979, 93 Stat. 397,
provided that: ``It is the sense of the Congress that the Secretary of
State should--
``(1) improve coordination between the Department of State and
the Department of Defense and other departments and agencies of the
United States operating outside the United States with respect to
foreign national pay systems and wage schedules to the extent that--
``(A) joint wage surveys and compatible pay schedules are
adopted in countries where two or more departments or agencies
of the United States directly employ foreign nationals, and
``(B) Department of Defense wage rates are included in wage
surveys of the Department of State where the Department of
Defense operates under indirect-hire arrangements;
``(2) monitor the establishment of wage rates outside the United
States more closely to insure that United States missions--
``(A) operate under salary schedules that reflect private
sector average pay or average pay ranges,
``(B) include the cost of severance in making pay
adjustments, and
``(C) survey jobs in the private sector which represent as
closely as possible the work force of the mission; and
``(3) substitute, whenever possible, prevailing local retirement
plans for civil service retirement with respect to the retirement of
foreign nationals employed by the United States.''
Section Referred to in Other Sections
This section is referred to in sections 3951, 3964, 4011 of this
title; title 2 sectio
