Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Army Field Support
Brigade – Far East
Yokohama, Japan
Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
06/23/2017
Date
The claimant was a Federal civilian employee of the Army Field Support Brigade – Far East in Yokohama, Japan, during the claim period. His representative requests the U.S. Office of Personnel Management (OPM) reconsider the agency’s denial of his request for living quarters allowance (LQA). We received the claim on February 2, 2016, and the agency administrative report (AAR) on April 26, 2016. For the reasons discussed herein, the claim is denied.
The claimant was stationed in Rock Island, Illinois, from July 2007 until his retirement from active duty military service in July 2012. He accepted his initial Federal service position with the U.S. Army Sustainment Command effective August 12, 2012, and was deployed on temporary change of station (TCS) orders to his duty station in Kuwait. While in Kuwait, the claimant applied for, was offered, and accepted a Supervisory Logistics Management Specialist, GS-346-13, position located in Japan with the Department of the Army (DA), effective July 13, 2014.
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, Department of Defense Instruction (DoDI) 1400.25 – V1250 implements 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.
The agency determined the claimant ineligible for LQA prior to the suspense date of the firm job offer’s acceptance/declination, stating in a June 3, 2014, email: “Mr. Workman does not meet the definition of a US hire according to the DoDI 1400.25 Volume 1250. Mr. Workman was OCONUS [Outside the Continental United States] when he applied and does not currently have a transportation agreement/return trip to the US.” The agency explains in its AAR to OPM:
Mr. Workman is not a U.S. Hire. The Department of State Standardized Regulations (DSSR) Section 031.11 sets forth the conditions under which employees recruited in the U.S. may be granted LQA. Department of Defense DoD Civilian Personnel Manual 1400.25-M further defines a U.S. Hire as a person who resided permanently in the United States, or the Northern Mariana Islands, from the time he or she applied for employment until and including the date he or she accepted a formal offer of employment. Mr. Workman does not meet that definition as he was stationed in Kuwait when he applied for the positon in Japan.
The claimant’s representative asserts the claimant’s eligibility for LQA as a “U.S. Hire,” explaining his rationale in the claim request to OPM:
At the time Mr. Workman applied for and accepted the appointment for his [Supervisory Logistics Management Specialist] position, he was temporarily assigned for duty at Camp Arifjan, Kuwait. Camp Arifjan is a military base leased from the Kingdom of Kuwait. As a result, Mr. Workman was in the United States because such bases are considered to be a “possession of the United States.” See, e.g. Vermiya-Brown Co. v. Connell, 335 U.S. 377, 69 S. Ct. 140 (1948) (holding that property in Bermuda leased from Great Britain for the purpose of constructing a U.S. military base was a “possession of the United States” for purposes of the Fair Labor Standards Act).
LQA may be granted to employees recruited in the United States, as stated in DSSR section 031.11:
Quarters allowance prescribed in Chapter 100 may be granted to employees who were recruited by the employing government agency in the United States, the Commonwealth of Puerto, the Commonwealth of the Northern Mariana Islands, and the possessions of the United States.
Relative to these criteria, DoDI 1400.25, Volume 1250, defines “U.S. hire” as follows:
A person who resided permanently in the United States, or the Northern Mariana Islands, from the time he or she applied for employment until and including the date he or she accepted a formal offer of employment.
An employee’s status as a “U.S. hire” is thus based on physical residency at the time of recruitment for the position in question. Hence, an employee must be physically residing in the U.S. from the time of application until acceptance of a formal job offer. In this case, the claimant was employed by DA at Camp Arifjan, Kuwait, on assignment from August 2012 to April 2014. The claimant applied for the Supervisory Logistics Management Specialist position located in Japan in December 2013, and the agency extended a tentative job offer to him on April 2, 2014. He accepted the offer by the suspense date of April 4, 2014. The claimant was redeployed back to the United States in April 2014, which is before the agency extended the firm job offer in June 2014. The claimant was employed and resided in Kuwait for portions of the recruitment process and was not permanently or physically residing in the United States from the time he applied for employment until and including when he accepted the formal job offer.
The claimant’s reliance on Vermilya-Brown Co. to support his position that he is eligible for LQA as a "U.S. Hire” is misplaced. In that case the Court was concerned with the applicability of the Fair Labor Standards Act of 1938 to employees engaged in commerce on a leasehold of the United States, located in Bermuda. Vermilya-Brown Co. was not intended to define “possession of the United States” for purposes of determining LQA eligibility under section 031.11 in the DSSR and, therefore, has no application in the present non-FLSA related claim. For the reasons stated above, the claimant may not be considered a U.S. hire for LQA purposes under DSSR section 031.11 and implementing regulations of the DoDI.
The claimant attempts to characterize his initial Federal service employment in Kuwait as “temporary,” thus meeting LQA eligibility requirements by reference to the September 19, 2013, policy advisory issued by the U.S. Department of Defense regarding the U.S. hire definition. The policy advisory stated, in part, that “[t]emporary absences from the U.S. for reasons such as vacations, temporary duty assignments … do not alter a person’s ‘U.S. hire’ status.” Although rescinded on May 11, 2015, the policy advisory was in force at the time of the claimant’s LQA eligibility determination. Regardless, the plain meaning of a temporary duty assignment is a travel assignment to a location other than the employee’s permanent duty station. In such a situation, there is an identifiable permanent duty station and a temporary duty station to which the employee is assigned on a time-limited basis. By contrast, Notification of Personnel Action Standard Form (SF) 50s contained in the record reveal that the claimant was hired on two successive excepted appointments by DA to work exclusively in Kuwait. Thus, the characterization of that locale as a temporary duty station would be inappropriate. Furthermore, the duration of his estimated 395-day assignment, which was extended for an additional year to Kuwait for DA would not be indicative of an absence from the United States of a temporary or short-term nature. We find the September 2013 policy advisory is inapplicable to his situation as his absence from the United States is inconsistent with that of a vacation, temporary duty assignment, or other temporary absence described by the advisory.
He is also not eligible for LQA under DSSR section 031.12, which states, in relevant part, that LQA may be granted to employees recruited outside the United States provided that:
a. the employeee'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 employement by the United States Government; and
b. prior to appointment, the employee was recruited in the United States, the Commomwealth of Puerto Rico, the Commenwealth of the Norther Marina Islands, the former Canal Zone, or a possesion 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 claimant meets section 031.12a because his presence in Japan is attributable to his employment with DA. DSSR section 031.12b specifies the conditions under which employees “recruited outside the United States” may be granted LQA. In the claimant’s case, the recruitment process began while he was in Kuwait and applied for the position but continued and concluded after he had returned to the United States, where he received and accepted the firm job offer. Thus, upon his redeployment back to the United States on TCS orders, he could no longer be considered to have been recruited outside the United States for purposes of section 031.12b and the employment conditions it describes, which are based on the premise that, prior to appointment, the individual is employed overseas by one of the qualifying entities with return transportation benefits to the United States.[1]
DoDI 1400.25 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 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.
[1] Department of Defense Form 1614, dated April 4, 2014, provided in the record, shows the claimant exercised his return transportation benefits to the United States.