Washington, DC

U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code

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Robert D. Hendler
Classification and Pay Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance


09/18/2015

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Date

The claimant is a Federal civilian employee of the Department of the Army (DA) in Waegwan, Republic of Korea.  He requests the U.S. Office of Personnel Management (OPM) reconsider his agency's termination of his living quarters allowance (LQA).  We received the claim on April 22, 2014, and the agency administrative report (AAR) on June 16, 2015.  For the reasons discussed herein, the claim is denied.

The claimant retired from active duty military service on May 31, 2009, in the Republic of Korea, and one month after retirement, accepted employment at Camp Henry, Republic of Korea, with the U.S. firm Serco Inc.  He was subsequently appointed to a Federal civilian position on December 7, 2009, and was initially granted LQA.  In April 2013, the claimant was notified that, as a result of a Department of Defense (DoD)-directed LQA audit, it was determined he did not meet the LQA eligibility provisions in the Department of State Standardized Regulations (DSSR) section 031.12b, which require that an employee recruited outside the United States must, prior to appointment, have been recruited in the United States by his or her previous employer and have been substantially continuously employed by such employer under conditions providing for return transportation to the United States. 

The claimant appears to rest his assertion of LQA eligibility on four bases: (1) he disagrees with his agency’s assessment that he had more than one overseas employer prior to his appointment; (2) he asserts he is entitled to LQA “under the Order[1] and the Job Announcement”[2]; (3) he asserts his LQA was discontinued because DoD “chooses to adopt a different interpretation” of DSSR section 031.12b^[3] and “does not have the authority to terminate LQA grants in such circumstances”; and (4) the “Memorandum of Law in Support of Appeal to OPM to Dispute Denial of LQA” signed by his duly appointed representative.

The Department of State Standardized Regulations (DSSR) contain the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas.  Within the scope of these regulations, the head of an agency may issue further implementing instructions for the guidance of the agency with regard to the granting of and accounting for these payments. See DSSR 013. Thus, Department of Defense Instruction (DoDI) 1400.25-V1250, most recently dated February 23, 2012, implements the provisions of the DSSR but may not exceed their scope; i.e., extend benefits that are not otherwise permitted by the DSSR.  In addition, an LQA applicant must fully meet the relevant provisions of the DSSR before the supplemental requirements of the DoD or AF implementing guidance may be applied.

DSSR section 031.12 states, in relevant part, that LQA may be granted to employees recruited outside the United States provided that:

a. the employee's actual place of residence in the place to which the quarters allowance applies at the time of receipt thereof shall be fairly attributable to his/her employment by the United States Government; and

b. prior to appointment, the employee was recruited in the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States, by:

(1) the United States Government, including its Armed Forces;

(2) a United States firm, organization, or interest;

(3) an international organization in which the United States Government participates; or

(4) a foreign government

and had been in substantially continuous employment by such employer under conditions which provided for his/her return transportation to the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States.  [Italics added.]

The language that the claimant had “more than one employer in the overseas area” as the basis for his LQA ineligibility is not used in the DSSR.  Rather, it is an abbreviated way of characterizing section 031.12b, which allows LQA eligibility in those instances where the employee, prior to appointment, had “substantially continuous employment” with one of the entities listed under b(1) through b(4), and which entity (i.e., the singular usage of “such employer”) recruited the employee in and provided return transportation to the United States or its territories or possessions.  By extension, an employee who has had more than one “employer” overseas prior to Federal appointment would be disqualified because the initial overseas employer rather than the employer immediately preceding appointment would have recruited the employee in the United States.

The claimant states in his claim that he was appointed to his current Federal position “upon conclusion of his active duty service with the U.S. Army in South Korea, Waewan.”  However, the agency provided, in their AAR, a copy of an e-mail dated February 28, 2013, in which the claimant states that, following his military retirement in Korea, he was employed in Korea by Serco Inc. from June 22, 2009, until on or around November 9, 2009, when he accepted his current Federal civilian position.  Therefore, we conclude that prior to appointment, the claimant was employed by Serco Inc., which is a qualifying employer under DSSR section 031.12b(2), but which recruited him in Korea following his military retirement there rather than in the United States or one of the other enumerated locations in section 031.12b.  Thus, the claimant is ineligible for LQA under DSSR section 031.12b.

In addition to this initial disqualifying circumstance, the claimant has not asserted nor has he submitted any documentation indicating that he was in substantially continuous employment "under conditions which provided for [his] return transportation to the United States" or its territories or possessions when employed with Serco Inc.; i.e., that Serco Inc. had provided him with return transportation to the United States as an employment benefit. 

Included in the claim to OPM was the aforementioned Memorandum of Law submitted by legal counsel on behalf of eighty-one individuals challenging the “Department of Defense’s … recent determination that they are not eligible to receive living quarters allowance (‘LQA’) in the future due to the fact that DoD has now decided that the LQA it had granted to these employees for the past several decades – pursuant to its consistently applied interpretation of its own regulations – was in error….” We note the Memorandum relates exclusively to the termination of LQA grants on the basis of the employee having had more than one overseas employer prior to appointment to his or her Federal position, which we addressed above.  However, since the Claimant has included the Memorandum in his claim, we will address certain assertions made in it.

OPM adjudicates compensation claims for certain Federal employees under the authority of section 3702(a)(2) of title 31, United States Code (U.S.C.).  The authority in 31 U.S.C.§ 3702(a)(2) is narrow and limited to deciding if the governing statutes and regulations have been properly interpreted and applied in determining the pay and/or benefits which an employee may be entitled to or granted. 

When OPM adjudicates a claim for compensation submitted pursuant to 31 U.S.C. § 3702(a)(2), OPM starts by reviewing the relevant statutory authority.  In this case, the Overseas Differentials and Allowances Act of 1960 (Act) establishes the statutory authority for Federal agencies to provide LQA to employees serving overseas.  5 U.S.C. § 5921 et seq.  One of the stated purposes of the Act is to “facilitate[e] for the Government the recruitment and retention of the best qualified personnel for civilian service overseas” in order “to improve and strengthen the administration of overseas activities of the Government[.]” Section 101 of Pub. Law. 86-707, 74 Stat. 792 (1960); Trifunovich v. United States, 196 Ct. Cl. 301, 305 (1971).

The Act provides in relevant part:

(a) When Government owned or rented quarters are not provided without charge for an employee in a foreign area, one or more of the following allowances may be granted when applicable:

(1) A temporary subsistence allowance . . .

(2) A living quarters allowance for rent, heat, light, fuel, gas, electricity, and water . . .

(3) Under unusual circumstances, payment or reimbursement for extraordinary, necessary, and reasonable expenses . . .

5 U.S.C. § 5923(a) (emphasis added).

Section 5922 (“General Provisions”), which governs all allowances and differentials authorized under the Act, reiterates that such allowances “may be granted to an employee officially stationed in a foreign area.” 5 U.S.C. § 5922(a) (emphasis added). It also provides that the allowances “shall be paid under regulations prescribed by the President.”  5 U.S.C. § 5922(c).

The Act specifically authorizes the President to promulgate regulations governing “(1) payments of the allowances and differentials and the respective rates at which the payments are made; (2) the foreign areas, the groups of positions, and the categories of employees to which the rates apply; and (3) other related matters.” Id. The President has delegated his authority to issue such regulations to the Secretary of State. (Exec. Order 10903, 26 Fed. Reg. 217 (Jan. 9, 1961)).  The Secretary of State discharged this responsibility by promulgating the Department of State Standardized Regulations (DSSR). The DSSR prescribes the allowances and benefits available to civilian employees assigned to foreign areas. Section 031 of the DSSR sets a baseline for employee eligibility for LQA and emphasizes in numerous subsections that LQA “may be granted” to employees serving overseas.  (DSSR §§ 031.11, 031.12, 031.14).

Since the language of the statute makes clear the granting of LQA (and separate maintenance allowance) and post differential are discretionary, we then look to the DSSR as the controlling basic regulations implementing the provisions of law pertaining to specific allowances and differentials.  “The statute [5 U.S.C. § 5922] and DSSR regulations, standing alone, are only money-authorizing and are not money-mandating” and therefore, are discretionary. Roberts v. United States, 745 F.3d 1158, 1165 (Fed. Cir. 2014).  Where the DSSR gives discretion to employing agencies to issue implementing regulations, we look to those which may further restrict the granting of the discretionary allowance. See, e.g., DSSR §§ 013, 40(d)-(e).  However, if agency implementing regulations or policies conflict with the DSSR, the DSSR controls.  Also, where the DSSR is silent on an issue, agency implementing regulations or policies control unless they are in conflict with the statute. 

Claimant’s representative alleges that “nothing in the words ‘substantially continuous employment’ can be read to limit the number of qualified employers an employee could have prior to appointment to one employer” and cites various definitions from multiple editions of Black’s Law Dictionary in support of his argument.  We find these arguments unpersuasive.  Substantially continuous employment, as used in DSSR 031.12b(4), must be with an employer (singular) which recruited the employee in the United States and induced the employee to accept overseas employment.  Therefore, claimant does not meet LQA eligibility criteria under DSSR section 031.12b that prior to appointment, he was recruited in the United States by his second overseas employer, and was in substantially continuous employment by “such employer” (singular) under conditions providing for his return transportation back to the United States by that employer.  Accordingly, his claim is denied. See OPM File Numbers 08-0009, 09-0021, 10-0018, 10-0037, 11-0005, 11-0012, 12- 0019, and 12-0020 at http://www.opm.gov/policy-data-oversight/pay-leave/claimdecisions/decisions/.

Section 3702(a)(2) does not include the authority to waive provisions of the DSSR, which determine LQA eligibility.  The applicable regulation in this case, DSSR section 031.12c, authorizes the head of the employee’s agency to waive section 031.12b upon determination that unusual circumstances in an individual case justify such action.  Therefore, OPM may not consider the claimant’s request for LQA continuance within the context of the claims adjudication function it performs under section 31 U.S.C. § 3702(a)(2).

The claimant further bases his claim on having accepted the Operations Specialist position in Waegwan because he was found eligible to receive LQA.  However, it is well settled by the courts that a claim may not be granted based on misinformation provided by agency officials, such as that resulting in DoD’s erroneous granting of LQA to the claimant.  Payments of money from the Federal Treasury are limited to those authorized by statute, and erroneous advice given by a Government employee cannot bar the Government from denying benefits not otherwise permitted by law.  See OPM v. Richmond, 496 U.S. 414, 425-426 (1990); Falso V. OPM, 116 F.3d 459 (Fed. Cir. 1997); and 60 Comp. Gen. 417 (1981).  Therefore, that the claimant was erroneously determined to be eligible for LQA upon his appointment and had received LQA based on that determination does not confer eligibility not otherwise permitted by statute or its implementing regulations, and the claimant's assertion that the agency "does not have the authority to terminate LQA grants in such circumstances" lacks merit.

The statutory and regulatory languages are permissive and give agency heads considerable discretion in determining whether to grant LQAs to agency employees. Wesley L. Goecker, 58 Comp. Gen. 738 (1979).  Thus, an agency may withhold LQA payments from an employee when it finds that the circumstances justify such action, and the agency’s action will not be questioned unless it is determined that the agency’s action was arbitrary, capricious, or unreasonable.  Under 5 CFR 178.105, the burden is upon the claimant to establish the liability of the United States and the claimant’s right to payment. Joseph P. Carrigan, 60 Comp. Gen. 243, 247 (1981); Wesley L. Goecker, 58 Comp. Gen. 738 (1979).  As discussed previously, the claimant has failed to do so. Since an agency decision made in accordance with established regulations as is evident in the present case cannot be considered arbitrary, capricious, or unreasonable, there is no basis upon which to reverse the decision.

This settlement is final.  No further administrative review is available within OPM.  Nothing in this settlement limits the claimant’s right to bring an action in an appropriate United States court.

 

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