Department of Defense Pay Practices for German Nationals Should Be Changed

FPCD-77-86: Published: Dec 2, 1977. Publicly Released: Dec 2, 1977.

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The Army and the Air Force employ over 67,000 German nationals at an annual cost of over $670 million. The Department of Defense's (DOD's) employment system in Germany is based on multilateral and bilateral agreements and years of precedent and tradition. Although its personnel policies there generally appear in line with prevailing private practices, some aspects of compensation setting and administration should be changed.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Defense should: periodically survey wages in the German private sector in order to strengthen the U.S. position in negotiations; periodically survey private sector practices to determine how private industry is reducing over-tariff supplements and adjust the DOD reductions accordingly; examine, with the German Government, labor cost sharing opportunities, such as guaranteeing a minimum exchange rate in billing payrolls; explore methods to increase American hires by assuring that ceilings placed on American hires do not reduce present employment levels, determining the impact on DOD payroll costs and employment flexibility of a German proposal that provides certain dependents and other Americans with the same compensation as German nationals, and having the Air Force adopt the Army's dependent hiring policy of giving priority to dependents in filling vacant German national positions; and initiate a realistic assessment of the estimated severance liability for both appropriated and nonappropriated fund activities in Germany.

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