(Note: the term “employee” as used in this section means an employee who is a U.S. citizen or a U.S. resident alien.)
(a) If a contractor employee serving overseas under a contract does not qualify for the exemption for overseas income provided under Section 911 of the U.S. Internal Revenue Code (26 U.S.C. 911), such employee is eligible to receive an overseas recruitment incentive (ORI), to the extent the ORI: is authorized by the contractor’s normal policy and practice; is deemed necessary by the contractor to recruit and retain qualified employees for overseas services; and does not exceed 10% of the base salary of the employee from date of arrival at overseas post to begin assignment to date of departure from post at the end of assignment. ORI is to be paid as a single payment at the end of the employee tour of duty overseas. The contractor shall take all reasonable and prudent steps to ensure that ORI is not paid to any employee who has received the IRS Section 911 exemption.
(b) In the event that an employee subsequently receives a Section 911 exclusion for any part of the base salary upon which this supplement has been paid, such supplement or appropriate portion thereof shall be reimbursed by the contractor to USAID with interest. The interest shall be calculated at the average U.S. Treasury rate in effect for the period that the contractor or his employee had the funds. Neither the contractor’s nor the subcontractor’s inability to collect refunds from eligible employees shall be used as a basis to excuse subsequent refunds by the contractor to USAID.
