3 FAM 7520
COMPENSATION PLANS
(CT:PER-944; 05-15-2019)
(Office of Origin: HR/OE)
3 FAM 7521 GENERAL PURPOSE
(CT:PER-917; 08-20-2018)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
A local compensation plan forms the legal basis for all
compensation payments to FSN employees. All payments to FSN employees, such as
salary, direct benefit payments, and premium compensation, and U.S. Government
contributions to host government social insurance or private insurance plans,
shall be specifically authorized in the joint local compensation plan. See 3 FAH-2 H-220
for format and content of local compensation plans.
3 FAM 7522 INITIAL PLANS
(CT:PER-917; 08-20-2018)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
If possible, a local compensation plan will be developed
and installed at a new overseas establishment before FSN employees are hired.
If a plan cannot be developed before the overseas establishment is opened, a
compensation plan already in effect at a neighboring post may be used pending
completion of the initial local salary survey (see 3 FAH-2 H-220 Appendix A).
3 FAM 7523 REVISED PLANS
(CT:PER-917; 08-20-2018)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
Revisions of existing joint local compensation plans are
normally based on surveys conducted by the State overseas establishment in an
area. Revisions may become necessary:
(1) When public and private enterprises in an area
provide general salary adjustments to their employees. In order to effect
similar adjustments surveys will be conducted in accordance with section 3 FAH-2 H-200 Appendix
D;
(2) When the host government promulgates a decree
adjusting the salary rates paid employees of all or most public and private
enterprises in an area. No basic salary survey, salary change survey, or spot
check review survey is generally needed to implement the adjustments ordered by
host government decree. The provisions of the decree, for example, whether it
affects all categories or only specific categories of employees, or whether the
increase varies from category to category, indicate the extent to which the
joint local compensation plan may be revised;
(3) In order to reflect changes in any other
authorized payments or to incorporate new types of payments; for example,
premium pay rates, bonus payments, and contributions to host government or
private insurance plans. Such action requires a survey of prevailing pay
practices throughout the area to determine the consistency of the proposal with
such practices as listed in 3 FAM 7512.
3 FAM 7524 DEVELOPMENT PROCEDURES
(CT:PER-917; 08-20-2018)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
a. All new or revised local compensation plans are
developed by the mission for all posts under its administrative jurisdiction in
accordance with the provisions of 3 FAH-2 H-220
and 3 FAH-2
H-230, except as provided in section 3 FAM 7522. In
unusual circumstances, alternative procedures for developing a local
compensation plan may be used subject to prior approval of their use by HR/OE.
Requests for such approvals should be submitted to State HR/OE for review and
coordination with other affected agencies. Information copies should also be
forwarded to the headquarters offices of other concerned agencies.
b. A post receiving payrolling services from a regional
center or fiscal-servicing post shall seek the advice of its servicing center
or post regarding any proposed new pay plans prior to adoption of the new plan,
so that administrative difficulties may be minimized.
3 FAM 7525 APPROVAL AND INSTALLATION
PROCEDURES--HEADQUARTERS AGENCIES
3 FAM 7525.1 Approval and Funding
(CT:PER-917; 08-20-2018)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
All new local compensation plans and all revisions or
amendments to existing plans are subject to approval by Washington
headquarters. Sections 3 FAH-2 H-220,
and 3 FAH-2
H-230 are the basis for a salary schedule revision. Sufficient information
and data must be submitted to enable the Department to effectively evaluate
proposed revisions.
3 FAM 7525.2 Discretionary
Increases
(CT:PER-917; 08-20-2018)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
a. Upon approval by agency headquarters, plans may be
installed as of the beginning of:
(1) The pay period coincident with, or next following,
the date on which HR/OE receives a complete set of salary survey data that is
the basis for the increase to the FSN pay plan; or
(2) A subsequent pay period;
(3) A prior pay period if salary survey data clearly
documents a majority (51 percent) of surveyed employers adjusted pay effective
on a date before the date the employer announced the adjustment.
b. Normally, requests for salary increases based on
spot check salary revisions should not be submitted more than once every 3
months, or if resulting increases are less than 4 percent, unless based on host
government action. Exceptions to these limits require written approval in
advance of the request from officials designated in 3 FAM 7513.2.
This does not restrict requests for salary increases of less than 4 percent
when based on full-scale or annual salary change surveys.
c. Installation dates will be coordinated among
headquarters agencies to insure simultaneous installation to the maximum extent
possible. If an agency needs additional funds to cover the increased costs of
installations, all agencies should withhold implementation for a short period.
Thereby, the agency lacking funds may have time to secure the necessary
allotment increase from its headquarters office. If the affected agency has not
received the increased funding authorization, all other agencies may proceed
with installation of the plan, provided the headquarters agencies represented
at post and the Chief of Mission (COM) approves implementation by some agencies
and not by others. Once the agency lacking funds secures the necessary increase
in allotment, installation must be prospective, except as provided in section 3 FAM 7525.3.
There is no authority to permit installation of the plan retroactively to the
date all other agencies installed the plan. If the COM does not approve
implementation by some agencies and not others, on its eventual implementation
the plan must be effective prospectively, except as provided in section 7525.3.
3 FAM 7525.3 Mandatory Increases
(CT:PER-779; 07-29-2015)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
A new or revised local compensation plan may be
implemented on a specific day of a pay period prior to receipt of data if such
adjustment would be consistent with the public interest and is a result of a
host government issuance (irrespective of whether it either is or will be
legally binding) which has affected the compensation of the employees of most
local enterprises surveyed as the basis for establishing local compensation
plans.
3 FAM 7525.4 Determining Effective
Date
(CT:PER-779; 07-29-2015)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
a. If a pay period prior to receipt of data is used
based on sections 7525.2 or 7525.3, the pay period effective date shall be
determined as follows:
(1) At the beginning of a pay period when the median
date of measured increases coincides with the beginning of that pay period; or
(2) At the beginning of the pay period immediately
following that median date; or
(3) On the effective date of a host government decree
affecting most or all public and private employers.
b. Exceptions will be considered only when the regional
payrolling center confirms that identifiable administrative cost-savings would
result from implementation at the beginning of the pay period prior to the host
government specified day.
3 FAM 7525.5 Median Date
(CT:PER-779; 07-29-2015)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
a. Median date is defined as the middle date in the sequence
of increase dates. The median date may become the average of the two middle
dates when the sequence contains an even number of dates. Increase dates for
all surveyed companies must be reported.
b. For those surveyed companies which report two or more
increase dates if the increase affects:
(1) All employees, an averaging method will be used to
determine the median date; or
(2) Only limited numbers of employees, the final
increase date reported by that company will be considered in determining the median
date.
3 FAM 7525.6 Data Submissions
(CT:PER-779; 07-29-2015)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
All data submissions for salary adjustments under section 3 FAM 7525.4 should include the following information:
(1) The employer identification codes from the latest
full survey;
(2) The percentage or fixed amount of the increase;
(3) The effective dates of all implemented employer
increases since the previous survey; and
(4) Whether the increase affected all or only certain
categories of employees in each company along with an explanation of the
difference for each category of employee.
3 FAM 7525.7 Impact of Effective
Dates on Benefit Payment and Absent Employees
(CT:PER-779; 07-29-2015)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
All approved increases occurring on a pay period prior to
receipt of data will be applied to local compensation plan annual basic rates
only and will not apply to benefits, such as severance payments, lump-sum
payments, premium compensation, or any other compensatory considerations unless
data are available indicating it is prevailing practice to do so. Such
increases will be implemented only for those FSN employees who were on post
rolls when Washington approval was granted, and who were on post rolls as of
the adjustment date. The salary of any FSN employees who entered on duty in the
interim period (between effective date and approval date) will be affected only
back to the dates of their entry on duty. The salary of an FSN employee no
longer employed by the post on the date approval is granted will not be
affected by the change that occurs on a prior date.
3 FAM 7525.8 Distribution of
Copies
(CT:PER-944; 05-15-2019)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
After installation of a new or revised local compensation
plan, the mission assures that copies of the plan, prepared in accordance with 3 FAH-2 H-220 and 3 FAH-2 H-230,
are distributed as follows:
(1) One copy to the appropriate regional bureau in the
Department.
(2) One copy to HR/OE in the Department.
(3) Three copies (or more if requested) to each
overseas establishment signing the plan for field use and submission to
respective agency headquarters. USAID establishments submit one copy to HR/HRSP/C,
the Classification Services Division. USAGM establishments
submit one copy to the Foreign National Personnel Staff (M/PFN). Commerce
establishments submit one copy to the Foreign Commercial Service (ITA/FCS/OPA);
Agriculture establishments submit one copy to USDA/ FAS/PD.
(4) Three copies to constituent posts, if appropriate.
(5) Additional copies for internal post use; for
example, personnel office, budget and fiscal office, employee information,
etc., if necessary.
3 FAM 7526 IMPLEMENTING REVISED
COMPENSATION PLANS
3 FAM 7526.1 Determining
Adjustments
(CT:PER-779; 07-29-2015)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
Revisions in the local compensation plan are to be applied
before any personnel actions that affect individual salaries, such as
promotions or step increases, which are effective on the same date as the plan
revisions. When a joint local compensation plan is revised, adjustments in
individual salaries and/or grades of positions are worked out in general
conformance with the following principles:
(1) No employee should suffer a decrease in salary due
solely to the installation of a new or revised local compensation plan, except
in the event of a general downward revision of the joint schedule as a
consequence of a substantial decrease in prevailing salary rates.
(2) Normally, no change in an employees grade level
designation or step is justified as a result of implementing revised
compensation plans.
(3) If relatively few employees would suffer a small
decrease solely due to installation of a new plan, post may change the
employees step to the next highest step that preserves the employees existing
rate of pay.
(4) If most employees would suffer a significant
decrease the Regional Bureau may authorize a lower pay schedule along with a
Temporary Schedule Revision Allowance for each employee equal to the difference
between each employees previous higher rate and the rate on the new lower
schedule.
3 FAM 7526.2 Pay Retention
(CT:PER-779; 07-29-2015)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
If an employees compensation exceeds the maximum for the
employees grade level upon change in the local compensation plan or the
classification of the encumbered position, the employees current compensation
may be frozen or placed in a saved rate category. (See 3 FAM 7300 for downgrading regulations.)
3 FAM 7526.2-1 Saved Rate
(CT:PER-779; 07-29-2015)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
Once an employee is placed in a saved rate, as outlined
above, the employee is normally granted, at the time of subsequent salary
increases, one-half of the average percentage or fixed amount increase at the
employees proper grade level. If after increasing the employees saved rate,
the increased rate falls within the new salary range for the employees
position, the employee normally is placed in the top step rate of the grade
level of the employees position. If the employees increased rate exceeds the
maximum rate of the proper level of the employees position, the employee
continues as a saved pay case at the newly adjusted rate.
3 FAM 7526.2-2 Frozen Rate
(CT:PER-917; 08-20-2018)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
An employees adjusted basic rate is frozen when the above
situation is judged to not be normal. The normal situation is one where half
the yearly increases will allow the saved rate employee to be placed on a
regular step rate for the grade level of the employees position within a
reasonable period of time of three to five years. When it appears that this
time period will be exceeded, post may request and HR/OE may authorize frozen
rates with no increases except those resulting from host government decrees. HR/OE
may also freeze any part of an employees total compensation package, that is,
pay and/or benefits, at that point in time when changes to the local
compensation plan are being authorized at lower levels than those previously
authorized.
3 FAM 7526.2-3 Host Government
Decree
(CT:PER-779; 07-29-2015)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
In the case of host government decrees which affect the
salaries of most or all private and public enterprises, the full amount of the
average salary increase granted may be authorized at the employees saved or
frozen rate.
3 FAM 7526.2-4 Involuntary
Transfer of Employees
(CT:PER-779; 07-29-2015)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
The general principles set forth above also generally
apply in cases of involuntary transfer of employees from another salary
schedule within the same country based on the same weekly hours of work. These
principles do not apply to a transfer from pay schedules involving a change in
the weekly hours of work, e.g. a change from a 48 hour schedule to a 40 hour
schedule.
3 FAM 7526.3 Saved Rate Retention
Period
(CT:PER-779; 07-29-2015)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
a. An employee at a saved rate retains saved rate
status until:
(1) The salary range of the employees grade is
increased to the extent that one or more step rates exceed the saved rate, at
which time the employee normally is placed in the top step rate of the
employees grade;
(2) Promoted to a position with a higher step rate;
(3) Separated from the overseas establishment.
b. A saved rate is removed from the local salary schedule
at the time it is no longer payable to the incumbent. Saved rates are not step
rates on the plan and employees may not be advanced to them. The TO block of
SF-50, Notification of Personnel Action, of an employee being placed in saved
rate status, should reflect the employees new grade level designation. The
step and salary should be shown as the Saved or Frozen Rate (SR or FR) of the
new grade level to which the employee is assigned, followed by the notation
See Remarks. The Remarks section should contain the following notation:
Employee is entitled to annual salary of ________ by virtue of saved rate
status as provided in 3 FAM 7526.
3 FAM 7526.4 Effect on Within
Grade Increases
(CT:PER-779; 07-29-2015)
(State/USAID/Commerce/Agriculture)
(Applies to Foreign Service Nationals Only)
Pay increases resulting from salary adjustments in a
revised local compensation plan normally should not affect the waiting period
for the award of WGIs. However, when a significant change has occurred in the
salary structure, such as a change in the number of grades or step rates, or in
the length of the waiting period, it may be desirable to provide that the
waiting period for the next WGI for some or all employees begins on the
effective date of such a revised compensation plan. If a new waiting period for
such an increase is established, a statement to that effect is included in the
Remarks section of the personnel action form or other instrument effecting
the salary adjustment to the new schedule. When an employee is required to
begin a new waiting period upon the installation of a revised compensation
plan, that fact, in addition to these listed in section 3 FAM 7526, is
taken into consideration when adjusting the employees salary to the new plan.
3 FAM 7527 THROUGH 7529 UNASSIGNED