Department of Defense Should Change Pay Setting for Filipino Nationals

FPCD-77-70: Published: Oct 5, 1977. Publicly Released: Oct 5, 1977.

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Authorizing legislation provides that compensation for foreign national employees is based on locally prevailing wage rates that are consistent with the public interest.

The Department of Defense (DOD) employs nearly 22,000 Filipino nationals at an estimated cost of $42 million for fiscal year 1977. Although wage increases have averaged about 8.7 percent since 1971, devaluations of Philippine currency have limited average dollar cost increases to about 6.7 percent annually. Basic conditions of employment are enumerated in a diplomatic agreement between the United States and the Philippines which includes provisions for preferential employment, a joint grievance committee, the right of employees to organize and bargain collectively, wage setting, and midyear bonus. The two current labor agreements and a powerful union hinder DOD efforts to adhere to prevailing practice criteria. As a result, DOD employees are paid considerably more than prevailing private sector rates. The collection of annual wage data is affected by inefficient collection procedures. Because of labor agreements and the cost effectiveness of employing Filipinos, there are relatively few U.S. civilian employees.

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