Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Stuttgart, Germany
Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
10/31/2017
Date
The claimant was a Federal civilian employee of the U.S. Africa Command, Department of the Army (DA), in Stuttgart, Germany, during the claim period. He 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 June 7, 2016, and the agency administrative report (AAR) on August 4, 2016. For the reasons discussed herein, the claim is denied.
The claimant was employed by a U.S. firm assigned to its Honolulu, Hawaii, office when he was issued U.S. military reactivation orders for assignment to Germany from January 22, 2012, to March 30, 2013. While stationed in Germany, the claimant applied for a DA position. He was offered, and accepted the position after his return to the U.S. and appointed to the position effective August 26, 2013. He asserts LQA eligibility as a “U.S. Hire” on the basis that while he was activated and deployed to Stuttgart, Germany, he maintained a job and residence in Hawaii, and states that “being deployed overseas is not disqualifying criteria for LQA.”
The agency determined the claimant ineligible for LQA under the Department of State Standardized Regulations (DSSR) section 031.11 because he applied for his DA position in Germany while stationed in Germany, and under DSSR section 031.12b because the claimant returned to the United States on military deactivation orders before receiving and accepting his job offers.
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, 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.
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 which connotes physical presence in the United States during the recruitment process rather than maintenance of a physical or legal residence at some place other than where the employee was actually located at that time. 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 issued U.S. military reactivation orders for an assignment in Stuttgart, Germany, from January 2012 to March 2013. The claimant applied for his DA position located in Germany in January 2013. He returned to the United States in March 2013, where he was extended a tentative job offer, which he accepted on May 16, 2013, and a firm job offer on July 15, 2013. Although the claimant maintained a job and residence in Hawaii, he was on a U.S. military assignment and resided in Germany for portions of the recruitment process and was not physically residing in the United States from the time he applied for employment until and including when 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 states his U.S. military orders to Germany “were of a temporary nature,” thus meeting LQA eligibility requirements by reference to the September 19, 2013, policy advisory issued by the U.S. Department of Defense (DoD) 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 or deployments by Reservists and National Guard members do not alter a person’s “U.S. hire” status.” The claimant provided OPM a copy of the DoD policy advisory referenced, the DA’s Implementation of DoD’s policy advisory dated November 26, 2013, and U.S. Army Europe’s (USAREUR) implementation of the policy advisory dated December 16, 2013. The claimant asserts in a January 28, 2014, letter to USAREUR that he should receive LQA “as a result of the recent change in civilian hiring policy outlined in US Army Policy Guidance and the follow-on US Army Europe memorandum, Implementation of Department of Defense Advisory, Definition of U.S. Hire.” However, the DoD policy advisory regarding the U.S. hire definition was issued after the claimant started his Federal civilian position on August 26, 2013, and cannot be applied retroactively. Further, OPM applies agency-developed policies to the extent such guidance is in agreement with the DSSR, and conversely we will not consider instructions that contradict DSSR section 031 when such implementing instructions exceed the scope, meaning, or intent of the DSSR. The DSSR does not exempt particular categories of employees, such as military reservists mobilized overseas, from the provisions of section 031.11. Thus, agencies are precluded from doing so either explicitly or implicitly in their implementing regulations as this would exceed the scope of the DSSR. Incidentally, the policy advisory was rescinded in May 2015.
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.]
The claimant meets section 031.12a because his presence in Germany is attributable to his employment with the 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 when he was in Germany and applied for the position but continued and concluded after he had returned to the United States, where he received and accepted the temporary and firm job offers. Thus, upon his return to the United States on military deactivation 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.
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.