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


10/25/2016

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Date

The claimant is a Federal civilian employee of the Department of the Air Force (AF) in Ramstein, Germany.  He requests the U.S. Office of Personnel Management (OPM) reconsider his agency's denial of living quarters allowance (LQA).  We received the claim on April 30, 2015, and the agency administrative report (AAR) on June 25, 2015.  For the reasons discussed herein, the claim is denied.

The claimant was previously employed by AF in Los Angeles, California, from May 10, 2010, until his resignation on February 25, 2014.  Prior to his separation from Federal service, the claimant was on leave without pay (LWOP) effective February 25, 2013, not to exceed February 24, 2014.  According to his SF-50, his reason for terminating employment was attributed to his wish to accompany his military spouse to her permanent change of station in Aviano, Italy.  While residing in Italy, he received an excepted appointment to his current position on August 25, 2014, prior to which he had been determined ineligible for LQA. 

The claimant asserts that as “a prior government civilian employee prior to appointment to this position…I am still within the one year time period of substantial [sic] continuous appointment  from the date of separation.”  He also contends that although his agency determined him ineligible for LQA under section 031.12b of the Department of State Standardized Regulations (DSSR), he may be eligible for a waiver of section 031.12b under Department of Defense Instruction (DoDI) 1400.25-V1250 because he “relocated to another base” in Germany and, consequently, is unable to maintain a common dwelling place with his spouse in Italy. 

The agency maintains the claimant’s hiring circumstances rendered him ineligible for LQA as he was “neither recruited in the U.S. to come to the overseas area, nor did he have own travel and transportation entitlements that would have provided for his return to the U.S. at the time his government civilian employment ended,” and “[t]he one year substantial employment he refers to in his OPM Claim applies to former military or civilian employees with own travel and transportation entitlements.”  In addition, they state:  “A ‘humanitarian’ waiver of section 031.12b of the DSSR IAW DoDI 1400.25- Vol 1250, Encl. 2., Para 2.c.(e)  also does not apply to Mr. Castillo’s situation, since he was not forced to geographically separate from his wife.  He voluntarily applied for the position at Ramstein, knowing that he would have to relocate from Italy to Germany.” 

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.  Thus, DoDI 1400.25-V1250 and the U.S. Air Forces in Europe Instruction (USAFEI) 36-705 implement the provisions of the DSSR but may not exceed their scope; i.e., extend benefits that are not otherwise permitted under the DSSR.  Therefore, an LQA applicant must fully meet the relevant provisions of the DSSR before the supplemental requirements of the DoDI or other agency implementing guidance may be applied.

DSSR section 031.12 states 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; or

Subsection 031.12b may be waived by the head of agency upon determination that unusual circumstances in an individual case justify such action.

The agency states the claimant “did not meet the personal eligibility requirements IAW with DSSR 031.12a […].”  They further state that this ineligibility stemmed from the fact that the claimant “resided in Italy as the dependent of his wife who was assigned there since Feb[ruary] 2013 as a military active duty service member.”  However, this is an incorrect application of section 031.12a.  It is undisputed that the claimant accompanied his wife overseas because of her permanent change of duty station in Aviano, Italy.  Nevertheless, his presence in Germany can only be attributed to his employment with the AF, since presumably he had no other reason to be there but to work.  Accordingly, the claimant’s actual residence at the time of his appointment in Germany can be reasonably attributed to his employment with the AF, and he thus meets DSSR 031.12a.  However, section 031.12b must also be met by employees recruited outside the United States.

Section 031.12b covering employees recruited outside the United States requires that immediately prior to appointment, the employee must have been recruited in the U.S. by one of the enumerated entities and have been provided return transportation back to the United States.  In other words, the employee must have been in "substantially continuous employment" with one of these entities overseas and under these conditions immediately prior to appointment to the position for which LQA is requested.  The claimant has provided no documentation showing, nor does he assert, that he was employed overseas by one of the enumerated entities, which provided him with return transportation back to the United States, prior to his appointment to the position in Ramstein, Germany.  The claimant’s statement that he was “granted a TA (transportation agreement) at the time of appointment to this position at Ramstein” is irrelevant to the claim, because the return transportation referenced in 031.12b must be provided by the qualifying employer preceding appointment.  Therefore, he does not meet basic LQA eligibility requirements under the DSSR for locally hired employees.

The claimant asserts eligibility under the DoDI 1400.25-V1250  provision[1] that “[u]nder the provisions of Section 031.12b of [the DSSR], 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.”  However, as noted previously, agency implementing regulations such as DoDI 1400.25-V1250 supplement but do not supplant the requirements of the DSSR.  Therefore, the requirements of DSSR section 031.12b must still be met before the DoDI's “substantially continuous employment” provision may be applied (hence its prefacing as “under the provisions of Section 031.12b”).  Within this context, the DoDI 1400.25-V1250 essentially allows former military and civilian employees a period of up to one year of unemployment after separation (or loss of transportation entitlement) to be considered "substantially continuously employed" by the military or civilian employer.  However, because this provision must be considered within the context of DSSR section 031.12b, the employee must have been previously employed overseas by one of the enumerated entities, which provided him with return transportation back to the United States.  The claimant asserts that he was a former civilian member “still within the 1 year time period…from the date of separation” and should therefore “be entitled to the one year continuous employment until Feb 2015.”  However, although the claimant had prior Federal service before his acceptance of the position in Germany, this was in the United States, not abroad.  Therefore, the DoDI provision cited by the claimant does not apply to his situation.

The claimant also states that he is eligible for a waiver of DSSR 031.12b under DoDI 1400.25-V1250, Enclosure 2., Paragraph 2.c. (e), where “the spouses or domestic partners could not maintain a common dwelling due to the relocation of either spouse’s or domestic partner’s work place.”  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 determining if monies are owed the claimant under the controlling statutes or regulations (in this case, the DSSR).  Section 3702(a)(2) does not include the authority to waive provisions of the DSSR, which determine LQA eligibility.  Rather, 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 a waiver within the context of the claims adjudication function it performs under section 31 U.S.C. § 3702(a)(2)[2].

USAFEI  paragraph 3.2.3, states that “individuals who do not permanently and physically reside in the U.S. at the time of application for and acceptance of the overseas position do not meet U.S. hire prerequisites.”  As previously stated, the claimant was residing in Italy when he applied for and accepted his current position.  In addition, it states that “[i]f LQA is unnecessary for recruitment purposes, it will be denied and there will be no further review or determination.”  LQA is an incentive and means of recruiting individuals who would not otherwise work overseas.  Further, paragraph 3.2.3 states, “should it be determined that LQA is necessary, the applicant’s eligibility will be determined IAW the DSSR and DoDI 1400.25 – V1250.  This determination has precedence, i.e. if an employee is found to be personally ineligible all other considerations are irrelevant.”  This means that all the requirements of the DSSR and DoDI must be met.  The claimant did not meet the requirements of the DSSR, which makes him ineligible under the DoDI, and further bars him from any eligibility under the USAFEI. 

DoDI 1400.25-V1250 specifies that overseas allowances are not automatic salary supplements, nor are they entitlements.  They are specifically intended as recruitment incentives for U.S. citizen civilian employees living in the United States to accept Federal employment in a foreign area.  If a person is already living in a foreign area, that inducement is normally unnecessary.  Furthermore, 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).  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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