Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Okinawa, Japan
Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
11/14/2017
Date
The claimant is a Federal civilian employee of the 718 Civilian Engineer Squadron (718 CES), at Kadena Air Base (AB), in Okinawa, Japan. He requests the U.S. Office of Personnel Management (OPM) reverse his agency’s denial of his living quarters allowance (LQA). We received the claim on April 5, 2016, and the agency administrative report (AAR) on May 12, 2016. For the reasons discussed herein, the claim is denied.
The claimant was appointed to his current federal civilian position on January 25, 2016. Prior to his entrance into federal service the claimant was employed as a government contractor with Overseas Service Corporation Solutions, Inc. (OSC) in Okinawa, Japan. While working as a contractor in Japan the claimant applied for his current federal civilian position. On October 18, 2015, the claimant departed Japan for the United States. On October 29, 2015, the claimant was extended a tentative offer for a Supervisory Housing Management Specialist position with the 718 CES at Kadena AB, in Okinawa, Japan. The claimant resigned from his position with OSC on November 3, 2015, and was provided an official job offer from 718 CES on November 13, 2015. On December 10, 2015, the claimant was given an LQA questionnaire, and due to the answers provided in that same questionnaire was denied LQA on December 30, 2015.
The agency maintains the claimant’s hiring circumstances rendered him ineligible for LQA. The agency contends that the claimant applied for the position while he was residing in Okinawa, Japan and therefore could not be considered a stateside hire. Consequently the agency considered him a “locally hired applicant.” However, the agency states that the claimant did not meet the eligibility criteria outlined in the Department of State Standardized Regulations (DSSR) 031.12(b), Department of Defense Instructions (DoDI) 1400.25M, and the Civilian Personnel Manual (CPM) Subchapter 1250.
The claimant asserts that he should be considered a stateside hire or U.S. hire as defined in DSSR 031.11 and DoDI 1400.25, Volume 1250. He states that he was not a local resident of Okinawa, rather he was a permanent resident of an address in Indiana and assigned to a firm in San Diego, California. He also states that it was his understanding “travel and relocation expenses [would] be covered by the Air Force, which gave [him] a clear message and understanding that [his] hiring status was a stateside hire.” and that he did not use his travel agreement after his retirement from the military.
The 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, the 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.
DSSR section 031.11 states LQA may be granted to employees recruited in the United States:
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 Rico, 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 based on physical residency at the time of recruitment for the position in question. Thus, an employee must be physically residing in the United States from the time of application until acceptance of a formal job offer. This language does not allow for a more expansive interpretation such as the maintenance of a place of residence in the United States. Therefore, whether an employee is deemed to be recruited in the United States or outside the United States is dependent on the location of the employee when recruited, not the existence of a legal residence at some other place other than where the employee is actually located at that time. In this case, the claimant was employed and resided in Japan 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 the date he accepted the formal job offer. Therefore, he may not be considered a U.S. hire for LQA purposes under DSSR section 031.11 and implementing regulations of the DoDI.
The claimant also does not meet the eligibility requirements for LQA under DSSR section 031.12. It 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.]
Section 031.12b covering employees recruited outside the U.S. 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 U.S. The claimant has provided no documentation showing, nor does he assert, that prior to appointment he was employed overseas by one of the enumerated entities, which recruited him in the U.S. and provided him with return transportation back to the U.S. Therefore, the claimant does not meet basic LQA eligibility requirements under the DSSR section 031.12(b).
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 U.S. 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.