Pay

Feds working overseas face 22% pay cut, if Congress doesn’t reauthorize necessary funds

State Department officials notified the American Foreign Service Association about the possible lapse of funds in July.

Jory Heckman@jheckmanWFED

September 10, 2024 11:37 am

3 min read

Federal employees working overseas could see a 22% cut in pay, if Congress doesn’t reauthorize a critical funding source by Oct. 1.

For the past 15 years, members of the Foreign Service serving abroad received the equivalent of locality pay for the Washington, D.C. metro area through Overseas Comparability Pay (OCP).

Congress, however, needs to reauthorize OCP before the start of fiscal 2025 to avoid a roughly 22% pay cut for federal employees who spend most of their time overseas.

Tom Yazdgerdi, president of the American Foreign Service Association, said State Department officials notified AFSA about the risk of a possible lapse in funding on July 11.

That risk, he added, is creating “considerable anxiety” among AFSA members.

“We’ve been talking with House and Senate authorizers and appropriators to make certain that they’re aware of this issue,” Yazdgerdi said. “This would have severe financial hardship for our members.”

According to State Department estimates, the average annual compensation for a Foreign Service overseas employee could decrease by around $21,000 per year, if OCP is not reinstated.

“We are deeply concerned about the potential lapse of the Overseas Comparability Pay (OCP) authorization, which would result in a significant pay reduction for our overseas Foreign Service members. Fixing this is the top priority for AFSA,” Yazdgerdi said.

“Our members’ dedication to serving the United States abroad is invaluable. They serve in some of the most dangerous and difficult places on earth and we are committed to ensuring they receive the support and compensation they deserve,” he added.

Beyond the State Department, the funding lapse would also impact federal employees at all six foreign affairs AFSA member agencies, including USAID, the Foreign Commercial Service, the Foreign Agricultural Service, the U.S. Agency for Global Media, and the Animal and Plant Health Inspection Service (APHIS).

“It’s everybody in the Foreign Service overseas that now gets overseas comparability pay, they would lose it. We’re talking about thousands of individuals,” Yazdgerdi said.

Congress is also looking to pass a continuing resolution to avoid a government shutdown at the end of the month.

A continuing resolution recently introduced by House Republicans would extend current spending levels through March 28, but doesn’t include language that would reauthorize OCP.

“We’re concerned that this hasn’t been done yet. And it may come down to the wire,” Yazdgerdi said.

‘Failure is not an option’

If lawmakers failed to reauthorize OCP in a stopgap spending bill, Congress could include reauthorization in another must-pass bill, the National Defense Authorization Act.

“You’d be asking folks to take a two-and-a-half month hit, which would be quite difficult. And we want to avoid that at all costs,” Yazdgerdi said. “We know our members, when they heard this message from the department and our own subsequent message, there was understandably a lot of angst and worry and anger.”

While federal employees are guaranteed back pay in the event of a government shutdown, Yazdgerdi said impacted employees in this scenario face no guarantee of backdated compensation.

“If it came to that, we would absolutely push, not only that they get their full back pay, but they get it with interest,” he said.

Federal News Network has reached out to the State Department for comment.

“It’s going to be a nervous three weeks. I don’t want to give you the impression that I can say this isn’t going to be completely resolved and we don’t have to worry about it. No, I think we have a lot more work to do,” Yazdgerdi said.

“It’s like Apollo 13 — failure is not an option,” he added. “They have to get this done, because it would just be such a hit that would really wreak havoc with people’s lives and livelihood. So that’s what we’ve been telling our contacts on the Hill, and we’ll continue to do so.”