Foreign Service Overseas Pay Equity Act of 2008

Foreign Service Overseas Pay Equity Act of 2008 - (Sec. 2) Amends the Foreign Service Act of 1980 to provide that Foreign Service officers designated class 1 or below stationed outside the continental United States and not in a non-foreign area receive locality-based comparability payments that would be paid to a member if his or her official duty station were in Washington, DC.

Phases in such adjustment pay.

Makes conforming amendments to the Foreign Service Retirement and Disability Fund and to the Foreign Service Pension System.

(Sec. 3) Amends the death gratuity computation payable to surviving dependents of Foreign Service officers who die from injuries sustained in the performance of duty abroad to provide for payments at level II of the Executive Schedule at the time of death, except that for employees compensated under local compensation plans the amount shall be equal to the greater of one year's salary at the time of death or one year's salary at the highest step of the highest grade on the local compensation plan from which the employee was being paid at the time of death.