Locality Pay for Civil Service Employees in Domestic Employee Teleworking Overseas (DETO) Program

This provision is part of the FY2023 National Defense Authorization Act (NDAA) which was signed by the President on December 23.  The provision calls for a 60-day implementation period.  Complete language from the NDAA is at the end of this message. 

The State Department telework team initially provided information about this legislation during an interagency meeting about DETO policy on November 30th. 

Issue:  All DETOs working their domestic positions from an overseas location lose their domestic locality pay, but Foreign Service DETOs are eligible to receive a type of locality payment called Overseas Comparability Pay (OCP).  Civil Service DETOs are not eligible for OCP, creating a pay parity issue between Foreign Service and Civil Service DETOs. 

To provide pay parity, Section 9717 of the NDAA authorizes locality pay for Civil Service DETOs to receive the lesser of: 

1. The locality pay the employee would have received had they not moved overseas as a DETO; OR  

2. The current rate of Overseas Comparability Pay (OCP) paid to Foreign Service employees working overseas, including Foreign Service employees on DETO arrangements.  Note: OCP is currently set at 2/3 of the D.C. locality rate.  

Each agency is responsible for implementation of this provision for its own DETOs. The State Department has no authority to determine how other agencies will implement this provision.  However, we are sharing State’s implementation plan as an informal guide for other agencies.  

State Department Implementation Plan:  

The State Department will publish the attached pay schedule for Civil Service DETOs with an effective date of January 1, 2023.  The corresponding personnel actions will be processed no later than February 21, 2023, which is 60 days after the President signed the bill into law. 

State consulted with OPM on implementation, who identified the following issues that may affect all civil service employees:  

1. Civil Service DETOs who are covered by either:  a special rate under 5 U.S.C. 5305 or; a retained rate under 5 CFR Part 536 will not receive this new location-based comparability pay.  This is due to the provision in 5 CFR 530.303(d) that states an employee is ONLY eligible for the greater of a special rate OR a rate of basic pay under any other legal authority, including location-based comparability pay or a retained rate (see 5 CFR Part 536). 

2. Civil Service employees who are NOT eligible for locality pay under 5 U.S.C. 5304 will receive only the base rate.  This base rate is lower than Overseas Comparability Pay (set at 2/3 the Washington, D.C. locality rate).  Thus, any employees covered under this situation will not benefit from the new location-based comparability pay but will continue to be paid at their current domestic salary rate. 

 In addition, per OPM, please note the following: 

• This new location-based comparability pay for DETOs is included as part of basic pay in applying overtime and other premium pay rules, just like Title 5 locality pay. 

• The adjusted rate of basic pay for the GS-15, step 10, used in establishing an employee’s premium pay cap must include the new location-based comparability pay for DETOs. 

If agencies have questions on implementation, they should contact DETOPolicy@state.gov. The State Department may also consider hosting an information session early in the new year for the inter-agency.

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8 SEC. 9717. LOCALITY PAY FOR FEDERAL EMPLOYEES

9 WORKING OVERSEAS UNDER DOMESTIC EM 

10 PLOYEE TELEWORKING OVERSEAS AGREE 

11 MENTS. 

12 (a) DEFINITIONS.—In this section: 

13 (1) CIVIL SERVICE.—The term ‘‘civil service’’ 

14 has the meaning given the term in section 2101 of 

15 title 5, United States Code. 

16 (2) COVERED EMPLOYEE.—The term ‘‘covered 

17 employee’’ means an employee who— 

18 (A) occupies a position in the civil service; 

19 and 

20 (B) is working overseas under a Domestic 

21 Employee Teleworking Overseas agreement. 

22 (3) LOCALITY PAY.—The term ‘‘locality pay’’ 

23 means a locality-based comparability payment paid 

24 in accordance with subsection (b). 

1 (4) NONFOREIGN AREA.—The term ‘‘nonforeign 

2 area’’ has the meaning given the term in section 

3 591.205 of title 5, Code of Federal Regulations, or 

4 any successor regulation. 

5 (5) OVERSEAS.—The term ‘‘overseas’’ means 

6 any geographic location that is not in— 

7 (A) the continental United States; or 

8 (B) a nonforeign area. 

9 (b) PAYMENT OF LOCALITY PAY.—Each covered em 

10 ployee shall be paid locality pay in an amount that is equal 

11 to the lesser of— 

12 (1) the amount of a locality-based comparability 

13 payment that the covered employee would have been 

14 paid under section 5304 or 5304a of title 5, United 

15 States Code, had the official duty station of the cov 

16 ered employee not been changed to reflect an over 

17 seas location under the applicable Domestic Em 

18 ployee Teleworking Overseas agreement; or 

19 (2) the amount of a locality-based comparability 

20 payment that the covered employee would be paid 

21 under section 1113 of the Supplemental Appropria 

22 tions Act, 2009 (Public Law 111–32), as limited 

23 under section 9802(c)(2) of this Act, if the covered 

24 employee were an eligible member of the Foreign 

1 Service (as defined in subsection (b) of such section 

2 1113). 

3 (c) APPLICATION.—Locality pay paid to a covered 

4 employee under this section— 

5 (1) shall begin to be paid not later than 60 

6 days after the date of the enactment of this Act; and 

7 (2) shall be treated in the same manner, and 

8 subject to the same terms and conditions, as a local 

9 ity-based comparability payment paid under section 

10 5304 or 5304a of title 5, United States Code.