The Foreign Service Journal, June 2012

26 F O R E I G N S E R V I C E J O U R N A L / J U N E 2 0 1 2 The OIG found that it is difficult for local staff to defend their rights, both because it is unclear which body of law and practice governs their employment and because guidance on their rights “is not al- ways easily found in one location.” If Foreign Service Nationals are un- aware of their rights and options, the report notes, “they may not act in their own best interests and thus may be effectively denied their rights.” The report also notes that unlike Foreign Service, Civil Service and Eligible Family Member employees, local em- ployees “do not have a mechanism for advocating on is- sues of fairness.” An appeals process that ends at the diplomatic post with no recourse to headquarters is vul- nerable to potential abuse: “If a complaint is against the chief of mission, the chief of mission cannot be the final level of appeal without a conflict of interest.” The OIG also highlighted the nearly unimaginable sit- uation in which approximately 20 employees in the Human Resources Office of Overseas Employment were struggling to function as the equivalent of the federal Of- fice of Personnel Management, with responsibility for more than 50,000 employees. For instance, federal law requires that embassies base local compensation plans on “prevailing practice.” To comply, HR/OE must keep up to date with local employee benefits — from salaries and allowances to insurance and pensions — in more than 170 different countries. Compounding the problem, over the past decade al- most the entire compensation decision-making and analy- sis machinery has been centralized in Washington. While the Foreign Affairs Manual describes a fair and transpar- ent process in which post management and LES employ- ees work together to evaluate, develop and monitor local compensation plans, the State Department has abandoned that approach. Instead, Washington now uses off-the-shelf data to an- alyze local compensation plans with little input from posts. Decisions are made behind closed doors without any op- portunity for LES personnel to contribute their expertise or air their concerns. Even overseas human resource of- ficers rarely see the actual data on whichWashington bases its decisions. It is little wonder, therefore, that an April 2009 report by the Office of the Inspector General (ISP-I-09-44, Lo- cally Employed Staff Compensa- tion Issues) found that the U.S. is “falling behind in providing a com- petitive compensation package for LE staff that is commensurate with their experience, technical skills and responsibilities.” Specifically the OIG’s survey data revealed that the U.S. was im- plementing average salary increases that were only around 60 percent of what could be termed “prevailing practice.” Since then, budgetary constraints — including, most re- cently, the imposition of a salary freeze — have con- tributed to a further decline in competitiveness. The Need for Transparency At the core of the Foreign Affairs Manual is the princi- ple that “posts must adhere to local labor, employment and Social Security laws to the maximum extent practicable in matters that affect Foreign Service Nationals.” However, anyone who has ever sought Washington’s approval for ad- justments to LES benefits knows that trying to ensure a local compensation plan corresponds to “prevailing prac- tice” is like running an obstacle course blindfolded. The decisions that emanate from Foggy Bottom often seem arbitrary and detached from local realities at the post. This is not for lack of effort by skillful human resources of- ficers around the world. What FSN hasn’t experienced the deep frustration at seeing their human resources offi- cer shrug and utter the dreaded words: “Washington has turned down our request”? In the case cited at the beginning of this article, local staff saw their sick leave entitlement dramatically cut, leav- ing them with no safety net in case of serious accident or long-term illness. Citing the FAM, they proposed replac- ing that benefit with an equivalent one: a “loss of income” insurance policy. It was easy to document that such poli- cies were a “prevailing practice,” covering the vast major- ity of the nation’s work force at a reasonable cost. Even so, the department would not even consider the request. FSNs are grateful to the many Foreign Service officers around the world who have spoken out about this situa- tion. Several embassies have expressed concern to the OIG about the current Locally Employed Staff compen- sation review process, particularly the department’s use of unreliable, off-the-shelf survey data, and the lack of trans- parency of the entire process. They asserted that HR/OE F OCUS Washington rarely replies to, or even acknowledges, any communications from local staff on employment issues.