DRAFT OF PROPOSED LEGISLATION INCLUDING SECTION ANALYSIS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP58-00597A000100040030-6
• Release Decision: RIFPUB
• Original Classification: U
• Document Page Count: 33
• Document Creation Date: December 16, 2016
• Document Release Date: October 13, 2004
• Sequence Number: 30
• Content Type: MISC

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(Draft of Proposed Legislation Including Section Analysis)
To provide specific authorities to govern the employment and administra-
tion of non-U. S. citizen personnel in foreign areas; and for other purposes.
Be it enacted by the Senate and the HouSe of Representatives of the
United States in Congress assembled, that this Act may be cited as the "Foreign
Employees' Personnel Act of 1956."
Sec. 1. Objectives. It is recognized the.t in order for agencies of the
U. S. Government to conduct economically their programs in foreign areas, it
is advantageous for them to employ non-U. S. citizen personnel locally to the
maximum extent possible with due regard to national security considerations
and effectiveness in operations. It is further recognized that one of the
desirable results of the overseas programs of this Government is the develop-
ment and maintenance of a spirit of friendliness, respect, and cooperation
toward this country. It is therefore apparent that in their role as employers
Incident to such foreign area operations, agencies of the U. S. Government
should qualify as good employers by local standards. To this end necessary
authorities are provided herein for employment and administration of non-U. S.
citizen personnel in foreign areas in a manner not inconsistent with local
laws, customs, and practices, without regard to similar provisions of other
U. S. laws and regulations relating to the employment and administration of
personnel which have been enacted primarily with reference to employment of
U. S. citizens. Authority is also provided to permit participation in local
social security or other local government plans and programs established for
the benefit of employees, provided that such participation may be accomplished
on a voluntary basis without infringement upon the sovereignty of the United
States and without subjecting U. S. Government agencies to the jurisdiction
of any other government or any agency or instrumentality thereof (except as
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may be agreed on a voluntary basis) with respect to the administration of
any such plan or program. However, the permissive authority provided
herein is not intended to be used in the employment of non-U. S. citizens
if the aggregate cost would exceed the aggregate cost of employing U. S.
citizens, except upon specific findings by an agency with regard to a
particular position or group of positions that employment of non-U. S.
citizens would be in the best interest of the United States.
Sec. 1 sets forth the objectives of this Act. As a
consequence of the extensive economic aid and defense programs
undertaken by the U. S. Government on a world-wide basis, the
Government has become the employer of large numbers of non-U. S.
citizens in foreign areas. Unfortunately, because of the urgency with
which such activities hare had to get under way and the primary
concern with the end objectives, insufficient attention was given
to the Government's prospective role as a large employer of local
citizens throughout the world. As a result in some localities
good that has been accomplished through program activities has
been offset to some extent by criticisms of the U. S. Government
as an employer. Such criticisms stem from the failure to parti-
cipate in local employee benefit programs or to observe local
pay practices in such matters as bonus payments and family
allowances, or to adopt local customs concerning leave for em-
ployees, and the like. Further, there is the fact that even
among agencies of the U. S. Government there are inconsistencies
in treatment of local employees which creates an adverse reaction.
The underlying cause is that personnel legislation under
-which these agencies ordinarily must operate was concerned with
U. S. citizen employees and,_ generally, with employment within
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the United States, its Territories and possessions. Such legis-
lation is ill-suited to employment of non-citizens in their own
countries. This proposed legislation is designed to promote
efficiency and economy in overseas operations and to overcome
existing obstacles to good public relations in foreign countries
resulting from inappropriate personnel practices.
Being duly mindful that the United States cannot and will
not permit any infringement upon its sovereignty, the proposed
legislation stipulates that the authorities provided to parti-
cipate in any local government plans or programs of employee
belefits may be utilized only if such participation is accepted
on a voluntary basis and without involuntarily subjecting any
agency of the U. S. Government to the jurisdiction of the host
government or any agency or instrumentality thereof. However,
as a practical matter, it would be expected that U. S. agencies
would agree to comply with local regulations in such matters as
reporting, in accepting decisions of adjudicative bodies con-
cerned with claims or awards under any employee benefit programs
in which such agencies participate, and to the extent that might
be deemed appropriate, by submitting certain records for inspec-
tion such as local employee payrolls, entirely on a voluntary
basis.
The proposed legislation will enable U. S. agencies to
qualify for consideration as ngood" employers by local standards,
provided that this purpose can be accomplished without sacrifice of
any of the traditional diplomatic immunities or rights of a
sovereign government. This is in accord with the practices of
most other principal zovernments_ wile woo Qy 12?Q41_nezaQrlii0_
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foreign countries.
It should be noted, however, that the permissive authorities
provided are not intended to be used in the employment of non-U.S.
citizens if the aggregate cost, taking all cost factors into
consideration, would exceed the aggregate cost to employ U. S.
citizens. Such a situation would be exceptional, and even in
such circumstances it is provided that if the best interests of
the United States would be served by employing lircal habitants
in certain positions other than U. S. citizens it could be done)
provided the agency made a specific determination to that effect.
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Sec. 2. Definitions. As used in this Act -
(a) Local employees means employees appointed in accordance with Sec. 4(a)
and includes U. S. citizens appointed under authority of Sec. 4(b).
(b) Local Government means the government of the foreign country or area
having appropriate authority with respect to the matters covered by
this Act.
(c) Foreign areas means any area outside the continental United States,
its Territories and possessions, the Trust Territories, and the Canal
Zone.
(d) Heads of agencies means the heads of departments and agencies which
maintain offices and installations in foreign areas.
(e) Local agency representative means the officer or officers at a
foreign post or area as designated by the agencies.
Sec. 2 defines certain terns used in this title.
Sec. 3. Regulations. Regulations to implement this Act shall be
prescribed by the President.
Sec. 3 provides that the President prescribe the regula-
tions necessary to implement the Act. Such regulations would
normally include interpretations of the law, delegations of
authority, broad policy statements, and certain basic rules and
procedures where uniformity of application is desirable in the
administration of local personnel overseas. Authority for
issuances of such regulations would probably be delegated by
the President, but since there is such diversity in the types
of activities carried on in foreign areas, with such widely
different problems in terms of personnel administration it
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would be expected that the President would instruct the issuing
agency to consult with the principal agencies operating over-
seas in the development of such regulations. Further, since
the proposed legislation provides broad authorities to conform,
insofar as practicable and with due regard to the interests of
the United States, to local law and custom, there are many areas
of personnel administration for which regulations will necessarily
have to be developed at the departmental or local level. It would
be expected that the President's instructions to the issuing
agency would prescribe that the regulations provide procedures
for agency coordination both at the departmental and local levels
to deal with problems of common interest. Within the framework
of the basic regulatory issuances, agencies would continue to
issue such additional regulations as are essential for effective
administration, both at the departmental and local levels.
Sec. 4. Employment Provisions. (a) Non-U. S. Citizens. Agencies
may engage the services of non-U. S. citizens in foreign areas by any or
all of the following methods, as may be most advantageous to the interests
of the U. S. Government:
(1) By direct hire, which is by direct appointment of individuals as em-
ployees of the U. S. Government; or
(2) By indirect hire, under agreements with local governments wherein
individuals selected become employees of the local government or an
agency thereof and their services are then made available to the
using agency and subject to direct supervision of such agency, on
a reimbursable or other pre-determined basis which may include a
charge for administration. Suh. eApreementa abliall e.xecuted
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accordance with the provisions of Sec. 14 of this Act. To the
maximum extent practicable the policies and principles prescribed
in this Act shall be applied in effecting employment arrangements
under this authority.
By contract or other basis as authorized in other statutes, except
that in the exercise of such authorities the policies and principles
prescribed in this Act shall be applied to the maximum extent
practicable.
Sec. 4(a) lists various authorities for engaging the
services of local personnel and is not intended to disturb
special existing authorities such as Sec. 15 of P.L. 600
79th Congress. A new authority - the indirect-hire method -
is provided although this method has heretofore been used in
accordance with executive agreements or other contractural
arrangements entered into with local governments.
(1) Direct hire authority permits the agency to appoint
individuals as employees of the U, S. Government,
and subject to direct control and administration
by the agency.
(2) Indirect hire authority permits the agency to enter
into an arrangement with the local Government where-
by some agency of that government employs such indi-
viduals as are required by the U. S. agency and handles
administrative details in connection with such employ-
ment. The individuals selected for employment would
be subject to approval by the using agency. Services
of employees under such an arrangement art maple
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available to the using agency and subject to its
direct supervision with regard to work requirements.
The arrangement would include mutually agreeable
financial provisions. Insofar as practicable it
would be expected that any such arrangement would
conform to the policies and principles prescribed
in this Act.
(3) This sub-section is included to indicate that any
existing special authorities under which services
of local personnel are engaged are not intended to
be terminated by enactment of the proposed legis-
lation. However, it is specified that insofar as
practicable the policies and principles prescribed
in this Act should be applied in the exercise of
such authorities.
(b) U. S. Citizens Employed Locally. When it is in the interest of the
U. S. Government, U. S. citizens who are also citizens of a foreign
country or who are natives or permanent residents of a foreign country
may be locally employed in accordance with the provisions of Sec. 4(a) of
this Act, and when so employed they shall be subject to the provisions of
this Act for pay and other purposes.
(b) This subsection would provide a legal basis for agencies
to employ locally some individuals who have U. S. citizenship,
under the pay and other provisions applicable to local employees.
Such individuals might be those who by reason of birth or marriage
have dual citizenship, or who are expatriates by their own choice
or by choice of their parents and have permanent residence abroad,
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and who, in terms of living standards and customs, are more appro-
priately associated with local citizens than with U. S. citizens.
(It would not include individuals who went abroad as employees of
the United States Government or of U. S. firms, and whose con-
tinued absence from the United States has been due to such em-
ployment.) It is recognized that employment of such individuals
creates special problems, and it would be expected that general
regulations would carefully define criteria for use of this
authority, with possible provision for review procedures in such
cases.
(c) Oath of Office. Local employees appointed under subsections 4(a)
(1) or 4(b) shall be required to execute an oath of office (or an affirma-
tion) which shall be a pledge to perform conscientiously the duties assigned
to them, to protect the interests of the employing agency to the best of
their ability, and which shall include an anti-strike affidavit similar to
that required to be signed by U. S. citizen employees. Any or all of the
requirements of this sub-section may be waived or modified for a particular
country or area when it is clearly evident that such requirements would be
inappropriate or contrary to the best interests of the United States.
(c) This subsection requires that direct-hire employees
execute an oath of office to at least pledge conscientious per-
formance of assigned duties and to protect the interests of the
employing agency to the best of their ability. Agencies would
not, of course, assign any duties which would be inconsistent
with the obligations of the employee as a citizen or resident
of another country. The oath would also include an anti-strike
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affidavit similar to that made by U. S. citizens, unless con-
trary to the terns of a pertinent treaty or to U. S. interests
for political or other reasons. In the case of countries where
employees of the local government have a right to strike, it
might be inappropriate to require an anti-strike affidavit.
Provision is made to waive the oath of office in those countries
where execution of such an oath might at some future date serve
as a basis for reprisals against the individual.
Sec. 5. Compensation Provisions. (a) Pay Schedules. Insofar as it
is in the public interest local employees shall receive pay in accordance
with pay schedules which shall be developed for each foreign post or area
in accordance with locally prevailing pay rates and practices for similar
jobs. In the case of persons recruited or transferred from outside the
area of employment, pay schedules may be based upon pay rates and practices
prevailing in the area of recruitment. To the extent that it may be deemed
in the interests of the U. S. Government to do so, pay schedules may include
provisions for the payment of family and other allowances, bonuses,- holiday pay
over-time pay, severance pay, and the like, in line with pay practices
generally followed by other employers, including the local government, in
the particular country and locality of employment or in the area of re-
cruitment. To the maximum extent practicable pay schedules shall be de-
veloped cooperatively and administered uniformly by all U. S. agencies
represented at the post or in the country.
Sec. 5 includes all compensation provisions applicable to
local personnel employed in foreign areas, which are intended
to make it possible for the agencies to conform to local pay
practices to the maximum extent possible. Among other things
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it permits agencies to compete with other employers on an equal
basis for the best available employees.
(a) It is required that pay schedules for each foreign
post or area, as appropriate, provide pay rates and other pro-
visions comparable to those prevailing locally. For all pay pur-
poses, locally prevailing rates and practices may be based either
on the area of recruitment or the area of employment, as may be
dictated by the requirements of the situation, but without pro-
viding undue advantages to U. S. agencies over other competing
employers. Authority is provided to include in the pay schedules
provisions for family allowances, bonuses, severance pay, holiday
and overtime pay, and the like, when such provisions are customarily
a part of the compensation structure in the country or locality.
It would be expected that insofar as practicable all agencies
operating at a post or within an area would collaborate in de-
veloping these pay schedules and would administer them uniformly.
(b) Changes in Daployment Systems or Practices. In effecting changes
in employment and pay practices as a result of the authority provided
herein, the conversion from the old pay schedule to the new shall be accom-
plished without reduction in the gross pay of any employee by reason there-
of, unless such reductions would have been made for other reasons.
(b) This subsection extends to local employees a principle
generally applied in the case of U. S. citizen employees, that
changes in employment systems or pay schedules for administra-
tive convenience should be effected without monetary loss to the
individual. In this case the protective feature would apply only
with reference to the initial changes in employment and pay
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practices resulting from the new authorities provided in this
legislation and would have no effect in the case of later modi-
fications in pay schedules or other pay provisions which are
made to conform to similar changes by other employers.
(c) Hours of Work. (1) In those areas where by law or custom the
normal work week is other than 40 hours a week, agencies may prescribe basic
work weeks for their local employees in accordance with local practices
when it is determined that the adoption of such work weeks will contribute
to more effective operations. (2) Agencies are authorized to pay overtime
and night rates, comparable to rates paid by other employers locally, for
night work and for work performed in excess of the prescribed work week.
(c) This subsection permits agencies, in those areas where
by law or custom the hours of work are other than 40 hours a week,
to prescribe basic work weeks for local employees in accordance
with such law or custom. However, since a variation in work hours
as between local and U. S. citizen employees generally presents
certain administrative problems, such variations would probably
be utilized only when more effective operations could reasonably
be expected to result. The second part of this subsection authorizes
payment for night work and for overtime, at rates comparable to
those paid by other employees under such conditions. Overtime,
if payable, would apply to vork performed in excess of the work
week prescribed for local employees, regardless of the number of
hours in such work week.
(d) Holiday Pay. Agencies may designate days to be observed as
holidays by local employees and local employees required to work on any
such days may be paid for such work at rates comparable to rates paid by
other local employers for holiday work.
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(d) This section provides that in case local employees
are required to work on days designated as holidays, they may
be paid for such work at holiday rates if special rates are
usually paid by other local employers for holiday work. It is
anticipated that regulations would provide controls concerning
the designation of holidays and require agency coordination in
making such designations.
(e) Displacement Pay. In the case of transfer of a local employee
from one foreign post to another for the convenience of the U. S. Govern-
ment, and particularly with reference to transfers from one foreign country
to another, agencies may compensate the employee, either in the form of a
lump sum payment or added increment to his basic pay, or both, as appro-
priate, for the additional expenses incurred in effecting such change (which
expenses would not be fully covered by travel and transportation expenses),
for the higher costs of living incurred by individuals who are not natives
of a locality, and as a premium for agreeing to the transfer.
(e) This subsection would permit agencies which find it
necessary or desirable to transfer local employees from one
foreign post to another foreign post to adjust the compensation
for such individuals in order to make such transfers acceptable
to them. While costs of transporting the employee and his de-
pendents and effects are provided for elsewhere, such a move
frequently involves additional expenditures on the part of the
employee which are not covered under the travel and transportation
authority. Further, such a change in location may subject the
employee to substantially higher living costs which he could not
reasonably be expected to absorb in connection with a transfer
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for the benefit and convenience of the government. The authority
provided would permit either a lump sum payment or a continuing
addition to base pay, or both, to cover exceptional expenses
incident to such a move, higher costs at the new post, incentive
to accept the transfer, and the like, as appropriate in the
particular circumstances. This authority would not apply in
the case of transfers which are primarily for the benefit of the
employee, as for example, when an activity is curtailed or dis-
continued at one location with a consequent reduction in person-
nel and similar jobs are available at other locations for which
individuals affected by a reduction can be employed provided
they place themselves at the new locations at their own expense.
(f) Payments in Local Currency. Except under special circumstances,
payments to local employees shall generally be made in the currency of the
country where the services are principally performed.
(0 This subsection stipulates that payments to local em-
ployees generally should be made in the currency of the country
where such services are principally performed, except as pro-
vided in (g) below. Exceptions might also be necessary where
such individuals are employed for service at remote locations
where all available facilities have been established by the
U. S. agency and maintained on a dollar basis.
(g) Allotments of Pay. If practicable and desirable agencies are
authorized to permit local employees who are employed in foreign countries
other than their countries of residence to make allotments from pay to a
member of a family or to a banking institution in the employee's country
of residence, in the currency of such country.
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(g) Agencies often find it advantageous to employ indi-
viduals who are not citizens or residents of the country in which
the post is located, frequently for the purpose of obtaining
people with particular qualifications such as a language pro-
ficiency. Transfers of local employees may be arranged for
similar reasons. However, because of foreign currency control
regulations such individuals may be reluctant to accept such
employment because of the difficulties in transferring funds
back to their countries of residence. This subsection would per-
mit the agencies to make allotments of pay for such individuals,
similar to the authority available for U. S. citizen employees
to make allotments back to the U. S. An employee would be per-
mitted only one such allotment either to a member of his family
or to a banking institution in his country of residence, payable
in the currency of such country. This authority would probably
be exercised only when the U. S. Government has a facility in
the particular country through which such allotment payments
could be effected.
(h) Income Tax Withholdings. In those foreign countries where the
collection of income taxes is normally accomplished by payroll deductions,
agencies may, if requested by the local government, make similar de-
ductions from pay of local employees, and transmit collections to designated
authorities as a voluntary gesture of courtesy and cooperation, provided
that no inspection or audit of any agency's records by an agent or instru-
mentality of the local government is required in connection therewith, ex-
cept as may be agreed on a voluntary basis.
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(h) In a number of foreign countries agencies of the U. S.
Government have been criticized for non-compliance with local
law regarding deductions from pay of local enpl_craes for income
tax purposes. This subsection would permit the agencies, if re-
quested by the local government, to make such deductions and
transmit them to designated authorities in accordance with pre-
scribed procedures, as a voluntary gesture of courtesy and com-
pliance. Agencies would not ordinarily undertake any responsi-
bility beyond making and transmitting current withholding de-
ductions. The authority does not permit the agencies to subject
themselves to any inspections or audits as a matter of course due
to such compliance, but would not prevent them from permitting
such inspections or audits if they are considered to be appropriate.
(i) Lodging and Meals. Under special circumstances when local em-
ployees are required to perform their services for the U. S. Government at
locations from which they do not have ready access to their places of
residence agencies may provide lodging and meals at reasonable prices,
without regard to the actual costs.
(i) In some areas U. S. Government operations are carried
on at remote locations, as in the case of certain military in-
stallations. In order to provide personnel for the work to be
done, agencies find it necessary to transport workers to the
site and to furnish lodging and meals. Generally the wages of
workers utilized at such installations are very law. Under such
circumstances the agency must be able to provide lodging and
meals at prices commensurate with the ability to pay, regardless
of the costs incurred in providing them, if they are to be able
to employ the necessary workers.
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Sec. 6. Training. When it is determined to be in the interests of the
U. S. Government, agencies may provide training to local employees to pro-
duce the required skills to meet their needs in filling positions in foreign
areas which can more appropriately or more economically be filled by non-
U. S. citizen personnel.
Sec. 6 provides authority to the agencies to provide
training to local employees. In many areas where the local
labor supply does not provide sufficient numbers of indivi-
duals with the requisite training and skills to fill all com-
peting employment needs it is possible to find individuals
with the necessary interest and aptitudes who can be trained
for effective service. Frequently this can be done more
economically than by filling certain positions with U. S. citi-
zen employees, and for this and other reason3it would be in the
Interests of the U. S. Government to undertake such training.
It would be expected that to the extent that their needs co-
incide, agencies would undertake such training on a cooperative
basis. It would also be expected that agencies would insofar
as practicable endeavor to protect the Government's investment
in such training by obtaining agreements to serve for specific
periods after the conclusion of the training provided.
Sec. 7. Promotions. Policies governing promotion of local employees
shall conform insofar as practicable and with due regard to the best inter-
ests of the United States, to local customs and practices.
Sec. 7 provides the necessary authority to permit pro-
motions in line with local practices.
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Sec. 8. Separations and Suspensions. (a) Policies governing sepa-
rations and suspensions of local employees for unsatisfactory performance
and for other cause, and reductions in force shall conform insofar as
practicable and with due regard to the best interests of the United States,
to local law and custom, provided that such policies shall provide adequate
protection to employees against arbitrary and capricious action, and in
conformity with the Veterans Preference Act where applicable.
(b) In the event that an employee who has been separated or suspended
for cause is restored to duty, compensation for all or any part of the period
of separation or suspension may be allowed as may be determined to be appro-
priate, with consideration being given to local custom or practice.
Sec. 8 authorizes separation or suspension of local employees
for unsatisfactory performance or for other cause, and reductions
in force, in accordance with local practices. It is stipulated
that local employees should be protected against arbitrary and
capricious action, and with due regard to the Veterans Preference
Act where applicable. The second part of this subsectinn would
permit payment for all or part of a period of separation or sus-
pension in the event an employee is restored to duty, upon de-
termination that such action was unjustified or unwarranted, with
due consideration to be given to local custom or practice under
similar circumstances.
Sec. 9. Mame. (a) Leave provisions for local employees at each
foreign post or area shall conform insofar as practicable to the leave
provisions generally observed under law or custom for similar classes of
employees by other employers in the area including the local government;
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or, if there is no uniformity in local leave practices or it is deemed
preferable not to adopt the local leave provisions, the annual and sick
leave provisions applicable to U. S. citizen employees or some appropriate
modification thereof may be extended to local employees.
Sec. 9(a). This section provides that leave provision3for
each post conform to those observed by other local employers for
similar classes of employees. However, authority is also provided
to extend the annual and sick leave provisions applicable to
American employees or some appropriate modification thereof in
areas where there is no uniformity in leave practices or if for
some good and sufficient reason it is determined to be undesirable
to adopt the local leave provisions.
(b) In those areas where it is the local practice to make advance
payments for leave for vacation purposes, agencies are authorized to make
similar advance payments to local employees without regard to the provi-
sions of R.S. 3648, as amended (31 USC 529).
Sec. 9(b) authorizes agencies to follow the local practice
where it is customary for employers to pay in advance for leave
taken for vacation purposes.
Sec. 10. Local Employee Benefit Programs. Agencies may, when it is
determined to be desirable and in the best interests of the U. S. Govern-
ment to do so participate voluntarily in any or All of the employee bene-
fits plans or programs established by local law, such as social security,
unemployment, health and medical care, workmen's compensation, to cover
some or all of its local employees. Agencies are authorized to pay from
available funds the contributions or payments normally required from em-
ployers, under the programs participated in and for the employees so
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covered, to make payroll deductions, and to transmit such payments and
collections to the proper authorities. Employees covered under such local
plans or programs shall not be eligible for similar benefits provided to
employees of the U. S. Government under U. S. laws. Arrangements for
participation by U. S. agencies in local government benefit plans or pro-
grams for employees shall be made in accordance with the provisions of
Sec. 14.
Sec. 10 provides authority for agencies to participate on
a voluntary basis in any or all of the employee benefit plans
established by local law, if it is determined that such parti-
cipation would be in the best interests of the U. S. Government.
Authority is also provided for agencies to make the usual em-
ployer contributions or payments incident to such participation.
In many areas considerable criticism has been directed at the
United States for its failure to cover its local employees under
the various local government benefit programs. At the same time,
there has been criticism of coverage of local employees under
the Civil Service Retirement System. Frequently this inability
to provide coverage under the local programs has presented a
serious obstacle to recruitment of top-notch people. It is only
appropriate that since U. S. foreign activities have as an important
objective the creation or betterment of relations between such
countries and the United States, such objective should not be
jeopardized over employment practices affecting citizens of the
country where such activities are carried on. Most other govern-
ments have found it advisable to conform to local practices and
failure of this Government to do so places the United States in
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an awkward position. Such participation, however, shou24 be
completely voluntary, in line with the objectives stated in
Section 1. Provision is made that local employees who are
covered by local benefit plans of any nature would be excluded
from any similar coverage under U. S. statutes.
Sec. 11. Civil Service Retirement Act Coverage. (a) Except as
provided herein local employees serving overseas shall not be eligible
for coverage under the Civil Service Retirement System.
Sec. 11(a) excludes coverage of local employees serving
overseas from coverage under the Civil Service Retirement Act
except under certain specified circumstances. The question of
eligibility of such employees to participate in the Civil Service
Retirement System is one that has received considerable attention
and criticism over the past few years. In reviewing the legis-
lative history of H.R. 3487 (P.L. 411 - 77th Cong. 2nd Session)
which extended coverage of this Act to employees of the Govern-
ment other than those in the classified civil strvice nothing
was found to indicate that the change effected was intended
to extend the coverage to alien employees or that there was
understanding that the revised language would have this result.
It therefore appears that the coverage was made available by
accident rather than design, and the annuity and survivor bene-
fits are out of proportion to benefits under local plans.
(1) Local employees who as of the effective date of this Act are contri-
buting to the Civil Service Retirement System shall continue under such
System, (subject to the amendments) except that in those countries where
the agency participates in the local social security plan, the employees
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may request coverage under such plan and if he can qualify for such
coverage he may request and obtain a refund of his contributions to the
Civil Service Retirement Fund.
Subsection (1) permits local employees covered by the Civil
Service Retirement Act and contributing to the Retirement Fund
at the time of enactment of this legislation to remain under such
Act subject to amendments thereto which are provided later in
this section. However, authority is also provided to permit
such employees to obtain a refund of their contributions if
their agency participates in the local social security program
and they can qualify for and prefer coverage thereunder. Pre-
sumably any back payments for coverage under the local social
security plan would be aresponsibility of the employee which
he could meet, at least in part, from the refunded Civil Service
Retirement contributions.
(2) In those countries where there are no local social security programs,
or it is decided that U. S. agencies will not participate in the local
social security plans or programs, or if a local employee is not eligible
for coverage for some reason, such as citizenship, in the local retirement
system in which an agency participates, local employees may be covered
under the Civil Service Retirement Act as amended herein, after they have
completed not less than three years of continuous service as employees of
the U. S. Government in one or more agencies of the U. S. Government, and
provided that deposits are made as provided in the Retirement Act for the
entire period of service as an employee of the U. S. Government.
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Subsection (2) provides that, in those countries where there
is no local social security program, or for some reason it is
determined that the U. S. Government should not participate, or
if the employee is not eligible for coverage as might be the case
where the individual is employed in a country other than his native
country, local employees can be covered under the Civil Service
Retirement Act as amended in this Act, after not less than three
years of continuous service in the employ of the U. S. Government
and provided that they make deposits to cover the total period of
service. Such deposits would not necessarily be made in lump sum
but could be made over a period of time as is presently provided
in the Retirement Act.
(b) Subsection 4(a) of the Civil Service Retirement Act as amended
is hereby further amended by changing the colon at the end of item (2) to
a period and inserting the following before the proviso clause: "In the
case of non-U. S. citizen employees of the U. S. Government serving over-
seas, annuity and survivorship benefits shall be computed in accordance
with a formula established by the Civil Service Commission for the country
in which such service was primarily performed. Pending the establishment
of such formula, the annuity of such employees shall be in an amount equal
to 2 per centum of the basic salary, pay, or compensation received by the
employee during any five consecutive years of allowable service at the
option of the employee, multiplied by the years of service if such average
basic salary does not exceed the equivalent of
2,500. The annuity of such
employees whose average basic salary exceeds the Eqpitelett of $2,500 shall
be computed in accordance with the provisions of (1) and (2) of this
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subsection." Also, the proviso clause as amended by striking out the words
"Provided, That" and capitalizing the word "In."
Sec. 11(b) would amend the Civil Service Retirement Act insofar
as the computation of annuities for local employees is concerned.
It is provided that the Civil Service Commission will establish
specific formulae for each cduntry concerning annuity and survivor-
ship benefits. This would permit establishment of benefit pro-
visions in line with those enjoyed by retired employees of other
local establishments. Pending establishment of such individual
formulae, annuities for retiring local employees would be com-
puted by using 2% of the average 5-year high salary up to $2500
in place of 1% plus $25 as is presently provided, and above $2500
using the same formula applicable to American employees. For most
employees the average salary would be well below $2500 and the
proposed change while providing more generous annuities compara-
tively speaking for local employees than for Americans, is none-
theless a very substantial reduction from the annuities now
available. This amendment would not affect former employees
who retired prior to passage of this Act but would apply only
to employees retiring after enactment of this legislation.
Sec. 12. Travel, Transportation and Storage. (a) General Travel
Authority. Agencies may pay travel expenses for local employees, when
traveling on official business pursuant to orders, which insofar as practi-
cable and desirable shall be paid in accordance with local practices. As
appropriate agencies may issue special travel regulations for local em-
ployees, and in the absence of such local regulations, the standardized
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Government travel regulations shall be used, except that per diem payments
may be adjusted in accordance with local practices.
Sec. 12 contains all provisions relating to travel and
transportation involving local employees. Subsection (a) is
the general authority to pay travel expenses in connection with
travel on official business pursuant to orders. Here again is an
area where it would be preferable and probably more economical
to follow local practices as to the type of accommodations to be
provided, per diem to be paid and expenses reimbursable. The
agencies will need to develop local regulations in connection
therewith, and lacking such regulations will be subject to the
Standardized Government Travel Regulations. However, even under
the latter regulations agencies would generally be expected to
conform with local practices insofar as types of accommodations
and per diem rates are concerned.
(b) Transportation of New Appointees. When posts of duty are located
in areas at which qualified local personnel cannot be obtained and such
personnel are recruited elsewhere, either in the sane or another country,
agencies may pay the travel expenses of new appointees and the cost of
transporting their dependents and their furniture and household and personal
effects from the place of recruitment or residence to the post of duty, and
upon termination of their services, provided that an agreed period of
service has been completed or termination is for the convenience of or for
reasons acceptable to the Government, for return to the place of recruit-
ment or to the place of residence as determined at the time of employment.
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Subsection (b) provides authority to agencies to pay for
transportation of new appointees and their dependents and effects
from the place of recruitment or residence to the place of service,
when it is necessary to recruit personnel at points away from the
post of service, whether in the same or another country. This
might occur when individuals are sought for service at remote
installations (such as in Labrador or Newfoundland) or when
individuals with particular types of skills are not available
locally. It also permits payment of return transportation costs
upon termination of services, but it is assumed that agencies
would prescribe a required period of service for the employee
to qualify for such return transportation.
(c) Transportation in Connection with Transfers. In the case of
transfer of local employees from one post to another, when done for the
convenience of the Government and not the employee, agencies may pay travel
expenses for employees and the cost of transporting dependents and furniture
and household and personal effects, from post to post, and upon termination
of services, provided that an agreed period of service has been completed
or termination is for the convenience of or for reasons acceptable to the
Government, for return to a previous post of employment.
Subsection (c) authorizes payment of travel and transportation
costs for local employees and their dependents and effects when
transferred from one location to another for the convenience of
the Government. Payment of costs for return to a previous place
of service is also authorized but conditioned upon the employee
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qualifying for such return transportation by completing a speci-
fied period of service, unless termination is for the convenience
of the Government.
(d) Transportation for Leave. In the case of local employees trans-
ported for the convenience of the Government and at Government expense to
posts of employment outside the area from which recruited or transferred,
agencies may pay round trip transportation expenses for the employee and
his dependents from the post of employment to the area of recruitment or
place of previous employment, at the conclusion of a prescribed tour of
duty for the purpose of taking leave, provided that the employee agrees
to another tour of duty at the same or another post, and the time involved
in performing such travel by approved means shall not be charged against
the employee's regular leave.
Subsection (d) authorizes agencies to pay round trip trans-
portation (but not per diem or transportation of household effects)
for the employee and his dependents for the purpose of taking
leave, which would be used only in the case of employees trans-
ported at Government expense from the place of recruitment or
another post of service. This authority is intended to apply
only to local employees hired for service in areas away from
the area of recruitment or to employees moved from one post to
another for the convenience of the Government. Such round trip
transportation would be provided after completion of each pre-
scribed period of service. It would be expected that periods
of service would vary from one to three years, similar to the
periods of service applicable for U. S. citizen employees, and
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would depend upon the purpose of the transfer, type and location
of the post, and other factors. It is also provided that the
time required to perform the travel by approved means between
the place of service and the place of recruitment or former
post will not be charged against the employee's regular leave.
(e) Transportation in Case of Death. In the case of local employees
transported for the convenience of the Government and at Government expense
to posts of employment away from the area of recruitment or post of pre-
vious employment, agencies may pay for the cost of preparing and trans-
porting to the place of recruitment or of previous employment the remains
of such employees or of their dependents who may die during the period of
service; and in case of death of the employee, transportation costs for
dependents and effects as authorized in subsection (c) above.
Subsection (e) is in line with authority generally available
to agencies operating overseas, except that such authority is ex-
tended to include dependents as well as employees.
(f) Storage. In the event a local employee is transported to a post
of employment to which he cannot take or at which he is unable to use his
furniture and household and personal effects, or if it is administratively
determined that transportation of effects would be uneconomical or contrary
to the public interests, agencies may pay the cost of storing such effects,
Including the expenses for packing and unpacking, cartage and drayage.
Subsection (f) authorizes agencies to pay for storage and
related expenses for storing an employee's effects in case he is
transported to a post to which he is not permitted to take or at
which he will not be able to use his effects.
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(g) Weight Limitations for Transportation and Storage of Effects.
Weight limitations applicable in the case of transportation and storage of
effects shall not exceed the weight limitations authorized for U. S. citi-
zen employees in connection with transfers within the United States, except
that in the case of local employees transferred to posts of employment
which involve overseas transportation the weight limitations authorized
for U. S. citizen employees of the agency concerned in connection with
overseas assignments, at comparable class levels, may be applied.
Subsection (g) prescribes maximums to be applied in con-
nection with the transportation and storage of the effects of
a local employee. Generally, it is presumed that if local prac-
tice provides any appropriate guides in this respect they would
be utilized and this provision merely establishes top weight
limitations.
(h) Transportation Costs. For purposes of this section "costs of
transportation" in connection with the transportation of household and
personal effects shall be construed to include expenses incurred in packing
and unpacking, crating, drayage and cartage, and temporary storage not to
exceed a total of 90 days.
Subsection (h) is included to define more precisely what
incidental costs are payable in connection with the transporta-
tion of household and personal effects.
Sec. 13. Health and Medical Provisions. (a) Physical Examinations.
To the extent that it is deemed in the interests of the Government to do so,
agencies may provide and pay for physical examinations of local applicants
and employees, and, may provide inoculations and vaccinations.
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Sec. 13 (a) authorizes agencies to provide and pay for
physical examinations of applicants and employees, and for
administering inoculations and vaccinations, if and when con-
sidered advisable.
(b) Medical Care. In the case of local employees transferred at
Government expense to their posts in remote areas or to other foreign
countries, medical care including transportation to and from medical faci-
lities may be provided for such employees and their dependents on a basis
comparable to that under which such care is provided for U. S. citizen em-
ployees and their dependents at the same post. If the local employee is
eligible for and is able to receive such benefits under a health or
medical program of his own or the local government, he shall obtain
necessary care under such program.
Sec. 13(b) provides authority for agencies to provide
medical care to local employees and their dependents when trans-
ferred at Government expense to posts in remote locations or to
other foreign countries. It is intended that a medical care
program similar to that provided for American employees under
like circimmtances would be provided, and that while it would
not necessarily involve the use of the same facilities or the
same reimbursement arrangements, it would in all important
respects be equivalent to the coverage provided for American
employees.
(c) Medical Facilities. In addition to authority provided in other
statutes U. S. Government medical facilities or services may be utilized
to provide emergency treatment to local employees for injuries or illness
when lack of such treatment might endanger the life or health of the employee.
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Sec. 13(c) authorizes that medical facilities and services
may be used to provide emergency treatment to local employees.
This is in addition to existing authority to provide treatment
in connection with on-the-job injuries or illness, and pre-
ventive programs.
Sec. 14. Negotiations With Local Governments. Any negotiations with
local governments concerning basic agreements to implement the provisions
of this Act, shall be initiated through regular diplomatic channels, pro-
vided that the advice and assistance of interested agency representatives
shall be utilized in the conduct of such negotiations in order that the
operating needs of such agencies may be properly considered. Any disagree-
ments in the course of negotiations on basic agreements which cannot be re-
solved to the mutual satisfaction of representatives of the agencies in-
volved shall be referred to the heads of such agencies for consideration
and decision.
Sec. 14 is included to insure that any necessary nego-
tiations with local governments relating to basic agreements
to implement the provisions of this Act may be initiated only
through regular diplomatic channels. However, recognizing that
diplomatic representatives generally cannot be expected to be
familiar with the numerous problems inherent in personnel
administration or labor relations nor the special problems
related to the various agencies' activities, actual negotiations
could either be conducted by the diplomatic representative with
the advice and assistance of agency representatives, or, under
delegation, by other agency representatives. In either case
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the diplomatic representatives would provide guidance and direction
on foreign policy considerations. /t would be assumed that sub-
sequent relations with local government representatives concerning
operations under the basic agreementsentered into would generally
be conducted by representatives of the agencies concerned and would
be conducted in accordance with such liaison arrangements as have
been made. In negotiating basic agreements provision is, made that
should disagreements arise among the agency representatives parti-
cipating they be referred to agency heads for resolution, so that
neither operating needs nor foreign policy considerations are over-
looked.
Sec. 15. Bonding. Agencies are authorized to pay the expenses for
bonding local employees in such amounts, for such purposes, with such
sureties and under such conditions as may be deemed appropriate.
Sec. 15 authorizes agencies to pay the expenses of bonding
local employees when bonding is deemed necessary. This is in
line with the current trend throughout the Government service.
Sec. 16. Incentive Awards. For purposes of participation in the
Government Employees Incentive Awards program (Title II, P.L. 763 - 83rd
Congress) to the extent desirable, individuals serving the U. S. Government
under the authority provided in Sec. 4(a)(2) of this Act may be considered
as civilian employees of the Government.
Sec, 16 is intended to permit indirect-hire employees to
participate in the Incentive Awards program, and such partici-
pation would be on the same basis as other non-U.S. citizen
employees serving under direct appointments.
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Sec. 17. Existing Employment Arrangements With Local Governments.
Any existing agreements, contracts, or other arrangements between U. S.
agencies and local governments concerning employment of local personnel
shall not be affected by enactment of this Act, whether or not consistent
with the provisions herein. The provisions of this Act shall be taken
into consideration - applied insofar as practicable when such agreements
or contracts are being revised or renewed.
Sec. 17 would re-affirm existing agreements or arrangements
with local governments whether or not entirely in accord with
the provisions of this Act. However, it is specified that when
such arrangements are under consideration for revision or renewal,
the provisions of this Act are to be applied to the extent
practicable.
Sec. 18. Repeal Provisions. All Acts and parts of Acts inconsistent
with the provisions hereof are hereby modified to conform herewith.
This section is intended to indicate clearly that in the
event of inconsistencies between this Act and existing statutes,
with reference to applicability to local employees in foreign
areas, the provisions of this Act shall apply.
? ,
--Nov-Pm-Or 29 1555
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