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 is a Federal civilian employee of the Department of the Army (DA) in Stuttgart, 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 February 14, 2017, and the agency administrative report (AAR) on May 18, 2017, from the Civilian Personnel Directorate (CPD), Department of the Army, Europe (USAREUR). We received the claimant’s response to the AAR and the agency’s comments to his response on May 23, 2017. For the reasons discussed herein, the claim is denied.
In July 2014, while residing in Fayetteville, North Carolina the claimant applied for his current Federal civilian position of Intelligence, Surveillance and Reconnaissance Air Planner, GS-301-12. In October 2014, the claimant accepted contractor employment with the U.S. firm FLUOR International, Inc. (FLUOR) in Afghanistan. While in Afghanistan, he received and accepted the tentative job offer for his current Federal civilian position. On January 30, 2015, he returned to the United States on “Rest and Relaxation” (R&R) leave afforded by his employing firm. On February 18, 2015, the day of his scheduled return to Afghanistan, he received and accepted the final job offer. He resigned his contractor employment with FLUOR that same day and did not return to Afghanistan. The claimant was appointed to his current Federal civilian position with DA effective April 20, 2015. The agency determined the claimant ineligible for LQA under the provisions of Department of State Standardized Regulations (DSSR) section 031.11, for employees recruited in the United States, and under DSSR section 031.12, for employees recruited outside the United States.
The DSSR contains 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. The Department of Defense Instruction (DoDI) 1400.25, Volume 1250 dated February 23, 2012, and in effect at the time of the claimant’s appointment implements the provisions of the DSSR, but may not exceed their scope i.e., extend benefits that are not otherwise permitted by 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 allowances 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 defines “U.S. hire” as follows:
A person who physically resided permanently in the United States or the Commonwealth of 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.
The claimant asserts eligibility for LQA as a “U.S. hire,” because he “lived and owned 2 Homes in Fayetteville, NC [North Carolina], ten years prior to and during the entire hiring process.” He further states he “…maintained a place of residence in NC [North Carolina] during the months [he] worked for FLUOR,” and submits a copy of a utility bill listing his home address in North Carolina. However, 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” or “home of record” 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 Afghanistan 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 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]
In the claimant’s case, the recruitment process began while he resided in United States and applied for the position, continued in Afghanistan, and concluded after he returned to the United States, where he received and accepted the firm job offer. Thus, because the claimant began and concluded the recruitment process in the United States, he cannot be considered as an employee “recruited outside the United States.” Moreover, the claimant’s recruitment circumstances do not reconcile with the fundamental premise of DSSR section 031.12, which is to permit the granting of LQA to “employees recruited outside the United States,” because he applied for the Federal civilian position while residing in the United States. Therefore, since the claimant cannot be considered an employee “recruited outside the United States,” application of the provisions stipulated by DSSR section 031.12 to his situation would be inappropriate.
In its AAR to OPM the agency states that “following the circumstance that Mr. Blair could not be considered eligible for LQA as a “U.S. hire,” he must be considered an employee recruited outside the United States, otherwise referred to as “local hire….” The agency does not address the requirements of DSSR section 031.12(a) as they considered he would have met those requirements. However, they determined the claimant ineligible for LQA because he did not meet all the requirements of DSSR section 031.12b, explaining the following:
It appears that Mr. Blair may have been employed under conditions that provided for his return to the United States following the completion of the assignment, either satisfactorily or unsatisfactorily, chiefly in the form of a return flight. However, it also appears that he used his entitlement, albeit not possibly known by the company at the time, when he returned to the United States on January 30, 2015 for “R&R” leave purposes, as he was scheduled to return to his place of work in Afghanistan on February 18, 2015. As a result, the requirements under which LQA may be granted to a locally hired employee under DSSR section 031 12.a and b and the DODI 1400.25-V1250, paragraph E2.2.a., were no longer met. All the criteria of the DSSR and its DOD implementing guidance must be met in order to be considered eligible for LQA.
Whether the claimant meets employment conditions as required by DSSR section 031.12b is immaterial to our claim determination since he, as previously mentioned, cannot be considered an employee recruited outside the United States for purposes of DSSR section 031.12.
Additionally, in his response to the AAR, the claimant states that there should be an “exception for combat zones where none of this applies.” We understand this statement to mean that he seeks an exception to the application of DSSR sections 031.11 and 031.12 to his situation. DSSR section 031.15 implemented on April 3, 2016, provides criteria for “Employees Deployed to or Employed in Combat Zones.” OPM adjudicates compensation claims by determining whether the controlling statute, regulation, policy, or other written guidance, in effect at the time of the action, were correctly applied to the facts of the case. Therefore, since his claim period predates the April 3, 2016, implementation of DSSR section 031.15, and thus not in force at the time of his LQA eligibility, application of these provisions to the claimant’s situation would be inappropriate and will not be addressed further.
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.