Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Seoul, Republic of Korea
Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
08/03/2017
Date
The claimant is a Federal civilian employee of the Department of the Army (DA) in Seoul, Republic of Korea (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 initial claim request on November 26, 2014, and the agency administrative report (AAR) on April 13, 2016. For the reasons discussed herein, the claim is denied.
Following his military retirement in Korea on September 30, 2004, the claimant was an adjunct professor at Yonsei University in Seoul, Korea, from September 2004 to December 2008. He applied for Federal civilian employment with DA in September or October of 2004. He was selected for the position on November 1, 2004, and “began work on December 13, 2004 after CPAC had offered LQA based on management’s assessment that [he] was highly qualified for this recruitment incentive and that [he] had not used [his] transportation agreement.”
In May 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 requires 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 U.S. The notification letter stated that he had been "identified as an employee recruited outside the United States who had more than one employer in the overseas area prior to [his] appointment into appropriated fund Federal civilian service."
In its AAR, the agency reiterates that the claimant is ineligible for LQA and states: “Mr. Tharp was employed by Yonsei University after his retirement and before federal appointment. Yonsei University did not recruit Mr. Tharp from the United States or other enumerated territories or possessions and did not provide for his return transportation back to the United States upon termination of his employment.”
The claimant, in his claim request, affirms that he taught classes at Yonsei University. However, he asserts that “It is a normal practice in the academic sector for PhD candidates to teach classes as lecturers. It is not considered a job but more of an informal part of the PhD training process.” He asserts that he was assured that “as long as [he] did not receive [a] visa through Yonsei University or attempt to stay in Korea on some other sort of visa, or did not attempt to register a car in Seoul,” did not use his transportation agreement “within a year,” and did not take “full-time employment,” he would be eligible for LQA. The claimant asserts that he “complied with all of the recommendations from CPAC” and that he “made no attempt to permanently stay in Korea on [his] own without employment from U.S. Forces Korea.” He contends that had he not quickly been “hired into an international relations specialist job, [he] would have returned to [the U.S.].”
The DSSR sets forth the basic eligibility criteria for the granting of LQA. DSSR section 031.12 states, in relevant part, that LQA may be granted to employees recruited outside the United States under the following circumstances:
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.
Although the claimant contends that his time at Yonsei University was “not considered a job,” he states the contrary in an email sent to his agency on February 22, 2013. In the email he states he “was employed as an adjunct professor at Yonsei University” and that “[he] received about $60 an hour for [two] 2 ½ hour classes each week for 16 weeks.” This is consistent with the commonly understood definition of an “employer.” Thus, we find that the claimant was employed by Yonsei University. However, for the purposes of this discussion, a determination must be made as to whether the university is a qualifying employer as defined under DSSR section 031.12b. We conclude that Yonsei University is not a qualifying employer under section 031.12b because it is not a component of the U.S. government or a U.S. firm, nor is it an international organization in which the U.S. government participates, and lastly, it is not a foreign government. Further, Yonsei University recruited the claimant in Korea following his military retirement there rather than in the United States or one of the other enumerated locations in section 031.12b. The fact that the claimant maintained a part-time employment status with Yonsei University before entering into Federal service does not exclude this employment from the provisions of section 031.12b. Thus, the claimant is ineligible for LQA under DSSR section 031.12b.
Even if Yonsei University had recruited the claimant in the United States or one of its territories or possessions, he was not employed by Yonsei University under conditions which provided for his return transportation to the United States or one of its territories or possessions. DSSR section 031.12b requires conditions to be in place at the time of employment to specifically ensure return transportation to the United States or another of the enumerated locations. DSSR section 031.12b clearly states return transportation must be provided by “such employer” listed in section 031.12b (1) through (4) with whom the individual was employed immediately preceding appointment, which in this case was Yonsei University.
In his claim request to OPM, the claimant states, “an official from the U.S. Army Garrison Yongsan CPAC…assured [him] that as long as [he] did not…use [his] transportation agreement within a year… [he] would be eligible to receive LQA.” The claimant’s statements are in reference to DoDI 1400.25-V1250, Enclosure 2, paragraph 1a, which states: “Under the provisions of section 031.12b of Reference (b), former military and civilian members shall be considered to have “substantially continuous employment” for up to 1 year from the date of separation or when transportation entitlement is lost, or until the retired and/or separated member or employee uses any portion of the entitlement for Government transportation back to the United States, whichever occurs first.”
It is clear from the record that the one-year period had not elapsed between the claimant’s military separation and his Federal appointment. However, that his military transportation entitlements were still intact is not relevant for purposes of DSSR section 031.12b because that section specifically refers to the employer “prior to appointment,” which in the claimant’s case was Yonsei University.
In a Memorandum of Law submitted to OPM by legal counsel on behalf of eighty-one individuals challenged 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.
The claimant further bases his claim on having been granted LQA “based on management’s assessment that [he] was highly qualified for this recruitment incentive” and that he “complied with all of the recommendations from CPAC” prior to his Federal appointment. 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.
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.