U.S. government employees assigned to Havana get an automatic 35 percent bump in salary.
It’s known as a “hardship differential,” and it’s given to employees only when their foreign posting “involves extraordinarily difficult living conditions, excessive physical hardship, or notably unhealthful conditions affecting the majority of employees officially stationed or detailed at that place.”
American employees in only 12 other nations in the world get 35 percent hardship pay, according to the State Department’s Office of Allowances. Those countries are:
- Central African Republic
- Papua New Guinea
- Sierra Leone
Hardship differentials range from 5 percent to 35 percent. The rate for Havana has fluctuated between 20 percent and 30 percent since the ’90s. The rate rose from 25 percent to 35 percent on Aug. 5, 2018.
The Office of Allowances says:
Hardship differential is designed to provide additional compensation to employees for service at places in foreign areas where conditions of environment differ substantially from conditions of environment in the continental United States and warrant additional compensation as a recruitment and retention incentive.
Living costs are not considered in differential determination.
Conditions at differential posts are reviewed periodically, but at least biennially, to insure that the payment of hardship differential shall continue only during the continuance of conditions justifying such payment. As periodic reviews indicate changes in living conditions, rates of differential may increase or decrease. Gradual improvements at a post which are noted during these reviews may be insufficient to justify an immediate decrease but may accumulate to form the basis for a decrease at a later time. Such a decrease may take effect while an employee is en route to his/her post or shortly after his/her arrival. Conversely, worsening conditions at a post may result in an increase in hardship differential which would benefit an employee even though he/she had just arrived.
U.S. employees in Havana also get a 20 percent cost of living adjustment. According to the Office of Allowances:
“Post allowance” means a cost-of-living allowance granted to an employee officially stationed at a post in a foreign area where the cost of living, exclusive of quarters costs, is substantially higher than in Washington, D.C.
The post allowance is a balancing factor designed to permit employees to spend the same portion of their basic compensation for current living as they would in Washington, D.C., without incurring a reduction in their standard of living because of higher costs of goods and services at the post.
The post allowance payment tables (Section 229) represent a percentage increase over Washington cost-of-living, applied to “spendable income”, i.e., that portion of basic compensation available for disbursement after deduction for taxes, gifts and contributions, savings (including insurance and retirement) and U.S. shelter and household utility expenses. In addition to local prices, the comparative cost of living considers the normal expenses of the average Government employee at the post (including imports and commissary purchases paid for in United States dollars) and additional costs resulting from local climatic and health conditions and customs, as related to costs for the same or similar items and conditions affecting Government employees in the Washington, D.C. area. Education and other costs peculiar to one segment of personnel at a post are not considered. The amount paid is a flat rate varying only by basic salary, size of family, and post, regardless of individual expenses.
Federal allowances for employees’ children ranges from $12,900 to $55,350.
The federal government’s daily allowance or per diem given to employees traveling to Havana is $316, including lodging, meals and other expenses.
The Office of Allowances says:
The lodging portion of the allowance is based on average reported costs for a single room, including any mandatory service charges and taxes. The meal portion is based on the costs of an average breakfast, lunch, and dinner at facilities typically used by employees at that location, including taxes, service charges, and customary tips. The M&IE rate is based on these meal costs plus an additional amount, equal to 10% of the combined lodging and meal costs, to cover incidental travel expenses.
In order for the Department of State to maintain appropriate travel per diem rates in foreign areas, employees of the Federal Government who believe that the per diem rate authorized for a particular area is inappropriate for expenses normally encountered while on temporary duty are encouraged to notify their respective agency travel officials.