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
05/23/2018
Date
The claimant is a Federal civilian employee of the Headquarters, U.S. Africa Command, Department of the Army (DA), in Stuttgart, Germany. He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s denial of a living quarters allowance (LQA) grant. We received the claim on June 12, 2017 and the agency administrative report (AAR) on August 21, 2017. For the reasons discussed herein, the claim is denied.
In June 2016, while working as a contractor for the private firm TechWise Global JLT (TechWise) in Abu Dhabi, United Arab Emirates, the claimant applied for his current Federal civilian position of Joint Fires and Effects Specialist, GS-0301-13, with DA. Shortly thereafter, the claimant’s employment contract with TechWise ended and the company returned him to the United States. While back in the United States, the claimant received tentative and firm job offers for the DA position on August 16, 2016, and October 13, 2016, respectively. The claimant was subsequently appointed to the DA position effective January 23, 2017.
Prior to appointment, the agency determined the claimant ineligible for LQA under the provisions of Department of State Standardized Regulations (DSSR) section 031.11, in connection with the definition of “U.S. hire” in the Department of Defense Instruction (DoDI) 1400.25, Volume 1250 because he was not physically residing in the United States when he applied for the position. Further, the agency states the claimant did not meet the “1-year residency requirement in the United States upon vacating a contractor position in the foreign area prior to accepting a follow-on assignment in the overseas area…” in accordance with Army in Europe Regulation (AER) 690.500.592. The claimant was also determined ineligible under DSSR section 031.12, for employees recruited outside the United States because his hiring circumstances did not meet the requirements of DSSR section 031.12b.
The claimant takes the position that he was “in fact a U.S. Hire.” To support his position, he references a September 19, 2013, policy advisory issued by the U.S. Department of Defense (DoD) which clarifies the application of the definition of U.S. hire within the DoDI as it relates to temporary absences from the United States. The claimant contends that his employment with TechWise was a temporary absence from the United States, within the meaning of the policy advisory, because he did not ship any household goods and therefore his employment there should not alter his status as a “U.S. hire.” He further asserts that he is exempt from the 1-year residency requirement found in AER 690-500.592 , paragraph 7.a.(1) since he was a civilian or contractor employee serving overseas in an area where family members were not authorized on an assignment that provided for their return transportation to the United States, as provided for in AER 690-500.592 , paragraph 7.a.(1)(c).
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. Department of Defense Instruction (DoDI) 1400.25, Volume 1250 dated February 23, 2012, and AER 690-500.592, dated November 18, 2005, both in effect at the time of the claimant’s appointment, implement 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, AER, or other agency implementing guidance may be applied.
The DSSR distinguishes between two categories of employees, namely either “employees recruited in the United States,” otherwise known as “U.S. Hire” (DSSR 031.11) or “employees recruited outside the United States,” otherwise known as “local hire” (DSSR 031.12a and b).
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.
Thus, an employee’s status as a “U.S. hire” is based on physical residency at the time of recruitment for the position in question. In this case, the claimant was employed and resided in the United Arab Emirates when he applied for the position and was not 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. Furthermore, as previously explained agency implementing guidance such as that contained in the AER 690-500.592 may not be applied unless the employee has first met the basic DSSR eligibility criteria, which in the claimant’s case have not been met. Thus, AER 690-500.592, paragraph 7.a.(1)(c) cited by the claimant is not applicable and will not be addressed.
Regarding the September 19, 2013, policy advisory issued by DoD, the advisory states, in part, that “[t]emporary absences from the U.S. for reasons such as vacations, temporary duty assignments (including the private industry equivalent) or deployments by Reservists and National Guard members do not alter a person’s ‘U.S. hire’ status…” However, as stated by the agency in its AAR, this advisory was rescinded in May 2015, and therefore not in force at the time of the claimant’s LQA eligibility determination. Regardless, had the policy been in effect at the time of the claimant’s LQA eligibility determination, characterization of his presence overseas as a temporary absence would not have met the intent of the policy advisory as his absence from the United States is inconsistent with that of a vacation, temporary duty assignment, or other temporary absence described by the September 2013 policy advisory.
DSSR section 031.12 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 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. However, the agency determined the claimant ineligible for LQA because he did not meet all the requirements of DSSR section 031.12b, explaining the following:
There is no dispute that TechWise Global hired Mr. Blume in the United States; there is also no dispute that the company provided for return travel and transportation to his place of hire in the United States; however, Mr. Blume used his entitlement. As a result, his hiring circumstances could no longer be reconciled with the requirements of the DSSR section 031.12b. All of the requirements of the DSSR Section 031.12a and 12b must be met in order for LQA to be granted.
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 the United Arab Emirates and applied for the position but continued and concluded after he had returned to the United States, where he received and accepted the tentative and firm job offers. Thus, upon his return to the United States, 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 employee is physically located overseas by one of the qualifying entities with return transportation benefits to the United States. Therefore, the claimant is also ineligible for LQA under DSSR section 031.12.
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.