Many nonappropriated fund “local hire” employees living overseas soon will be getting extra cash in their paychecks thanks to a ruling handed down last week by the Defense Department. And some could see even more money in the form of back payments.
On March 21, Michael L. Dominguez, the principal deputy secretary of Defense for personnel and readiness, directed the Defense Department’s nonappropriated fund, or NAF, employers to pay post allowance to all eligible employees not currently receiving the benefit.
“It’ll be good news for some folks at least, and some people will probably be disappointed,” said Michael Dean, operations manager for Spangdahlem Lodging at Spangdahlem Air Base, Germany. “But at least it will take care of some folks, and that’s a good thing.”
Dean, an Air Force NAF employee, has long believed that he and other Americans hired overseas were eligible for post allowance. The allowance, paid to qualifying employees to offset the high cost of living in many overseas areas, is a tax-free pay supplement.
A DOD regulation that went into effect in 1995 said “all eligible U.S. Citizens receive Post Allowance unless they are part-time, intermittent, or U.S. family member summer/winter hire employees,” Lt. Col. Les’ Melnyk, a Defense Department spokesman, wrote in an e-mail.
But of the DOD’s six major NAF employers, only the Army paid the allowance to Americans it hired overseas for full-time NAF positions. The Army and Air Force Exchange Service — the DOD’s largest NAF employer — along with the Navy Exchange Service Command; Commander, Navy Installations Command; Air Force Morale, Welfare and Recreation; and the U.S. Marine Corps haven’t been paying the allowance.
It’s unclear how many employees will be affected, though Dominguez has directed the NAF employers to determine how many and which employees are eligible.
In addition to future payments, Dominguez also “advised that the Department will develop guidance for employee claims for backpay,” Melnyk wrote.
Employees will be able to make claims going as far back as Dec. 1, 2001, according to Melnyk, but it’s unclear yet just who will qualify.
“Details on claims procedures, including filing time limits and evidence necessary for claimants to prove claims, will be forthcoming,” he wrote.
The e-mail did not say why the DOD chose the Dec. 1, 2001, date.
Melnyk was unable to provide an exact date when employees will start to see the allowance in their checks, but did say it would likely be “a matter of weeks.”
NAF employees “fall under different payroll systems,” he said. The services “have been asked to certify which NAF employees are eligible for post allowance, after which they will have to adjust their pay systems,” before the allowance can be paid.
Rates at which the allowance is paid change as often as every two weeks based on the exchange rate, and are also affected by off-base shopping patterns and the costs of overseas goods. Dean, for example, could expect to take home roughly $16,000 extra this year in post allowance at the current rate set for Germany.
Still he’s wary that everyone who thinks they might be eligible for the allowance are going to get it. He checked his employment form, and there’s a check in a box marked “full-time.”
Not all are so lucky, though.
“All of my staff are marked part time, even though they work 40 hours,” he said, adding many of them have worked steady 40-hour work weeks for him for years.
Details of whether they would be eligible for the allowance were not known Thursday.
