Local Employment Policy Handbook - ICASS

APPLICATION OF RESIDENCY-BASED
COMPENSATION
--HR must always compensate Ordinarily Residents (ORs) under the Local Compensation Plan (LCP).
--HR must always compensate Not Ordinarily Residents (NORs) under an American pay plan. NORs
must have a US Social Security Number.
--Dual Nationals: If an individual has dual citizenship and one of the citizenships is US, the US
Government always recognizes the US citizenship first.
1. State and Participating Agencies who have Signed the MOA to use State’s PSA Authority
A. Ordinarily Residents (including most Members of Household): HR employs an Ordinarily Resident
under a PSA and compensates under the Mission’s Local Compensation Plan. (Direct Hire appointments
are only under exceptional circumstances when authorized by the appropriate State regional, functional,
or participating agency headquarters. These requests are considered on a case-by-case basis.)
B. State and Appointment Eligible Family Members (AEFMs): HR employs an Appointment Eligible
Family Member (AEFM) under either a Family Member Appointment (FMA) or Temporary Appointment
and compensates under the American FP pay plan.
C. State and Eligible Family Members that don’t meet the definition of AEFM: HR employs EFMs that
don’t meet the definition of AEFM (for example, the US Citizen EFM receives a non-military USG
retirement annuity) under a PSA.
D. Participating Agencies and EFMs: Participating agencies decide how to employ EFMs selected for
their positions. HR/OE encourages the agency to use a direct hire appointment such as the Overseas
Limited Appointment (OLA, See 5 CFR, Part 301.201) which provides similar federal benefits to State’s
FMA. However, participating agencies often choose to employ under a PSA. So if the candidate is an
EFM, then HR uses the headquarters agency’s employment mechanism of choice – normally a PSA – and
compensates under the appropriate American pay plan. (HR confirms the employment mechanism and
American pay grade with the employing headquarters agency before making an offer of employment to
the EFM.)
2. USG Agencies who have not Signed the MOA to use State’s PSA Authority
Eligible Family Members (EFMs): If the candidate is an EFM, then the agency head contacts the
headquarters agency to identify the employment mechanism, e.g., direct hire appointment, other agency
PSC.