The Foreign Service Journal, February 2004

S ignificant changes to regulations governing pay for members of the Senior Executive Service could have a serious impact onSenior ForeignService salaries. The new pay system, which was to take effect on Jan. 11, is performance- based and eliminates locality pay. Thenewregulation—Public Law108- 136 — was included in the Fiscal Year 2004 Defense Authorization Bill and signed into lawby the president in late November. The lawmade no mention of the Senior Foreign Service, but SFS salaries are tied to Senior Executive Service pay rules. Because all future pay increases are to be perfor- mance-based (none will be automatic anymore), the new rules would effectively freeze pay levels in place for SFSmembers. The key problem with the new pay system is that as set up by the Office of Personnel Management, SFSmembers receiving localitypayasof Jan. 11wouldkeep that pay as part of their new base salary, while thosemembers overseas — none of whom receive locality pay — wouldbe stuckwith a base salary that is up to 16 percent lower than that of colleagues of equal rank serving inWashington. According toOPM, “thenewsystemno longer offers SESmembers access to auto- matic localitypayadjustmentsor toanauto- matic, across-the-boardpay increase at the time of the annual pay adjustment for General Schedule employees andExecutive Schedule officials. Instead, the new system requires that all future SES pay increases (beginning inJanuary2004)bebasedexclu- sivelyon individual andorganizational per- formance, and it allows significantly high- er base pay limits for the best performing executives.” For more details on the new rules, go to thememo fromOPMDirector Kay Coles James to heads of departments and agencies on the OPM Web site at www.opm.gov/oca/compmemo/2003/ 2003-19.asp. All the foreignaffairs agencies andAFSA are actively engaged andunified in seeking to neutralize any potential inequities that could occur as a result of the pay reform and elimination of locality pay. Quoted inStephenBarr’s Federal Diary column in the WashingtonPost onDec. 18, 2003,AFSA President John Limbert comments that “Overseas, the unfortunatemessage to the Foreign Service of the United States from the recent SES pay changes is inescapable: The administration and the Congress value neither our service or our sacrifice.” “EveryyearForeignServicememberspay ahigherpriceforservingoverseas,asthegap between locality pay and base pay only grows,” Limbert wrote in his letter to Barr. “It has always perplexed AFSA why the administrationandtheCongressaresoresis- tant to the idea of compensating these employeesfairly. (See“TheSFS—Collateral Damageat www.afsa.org/ltrtobarr.cfm.) In additiontothe Post ,Limbert’scommentson this issue were quoted in Government Executive and Federal Times. State Department management has been in close contact with both OPM and the Office of Personnel Management and Budget working on procedures to set pay appropriatelyandequitablyonJan.11. State management sent a draft Executive Order toOMBtoestablishanewseniorpaysched- ule for all SFS employees. “If approved,” according to the Dec. 31 message from Director General Pearson on the new per- sonnel reformlaw, “it isour intention toset initial pay for SFSmembers assigned over- seas against the new schedule in a way that will include Washington locality rates.” (NOTE: Aswe go topress, State is awaiting aresponsefromOMB. AFSAishopefulthat by the time you read this, a successful reso- lution to the SFS locality pay inequity will have been found.) ▫ American Foreign Service Association • February 2004 SENIOR EXECUTIVE SERVICE PAY SYSTEM REFORM Pay Reform Threatens to Freeze SFS Members in Place BY SHAWN DORMAN AFSA NEWS 2003 TAX GUIDE INSIDE THIS ISSUE Inside This Issue: LISTEN UP, CONGRESS!.....................2 TAX GUIDE 2003................................3 NEWS BRIEFS: FLA. REUNION.........13 JOSH