Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Kosovo
Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
09/11/2018
Date
The claimant is a Federal civilian employee of the Department of the Army (Army) in Kosovo. He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s denial of living quarters allowance (LQA), separate maintenance allowance (SMA), and foreign post differential (FPD). OPM received the claim on November 15, 2017, and the agency administrative report on April 18, 2018. For the reasons discussed herein, the claim is denied.
The claimant was in Kosovo on official military orders in service of the U.S. Army National Guard between August 16, 2014, and July 12, 2015. During his time in Kosovo he applied for a General Supply Specialist, GS-2001-11, position duty stationed in Kosovo. On August 25, 2015, by way of correspondence, Army’s Civilian Human Resources Agency, Northeast/Europe Region, Civilian Personnel Advisory Center extended the claimant a final job offer for the position. In the job offer the claimant was informed that LQA was not authorized, as he would be living in government-owned quarters, however that SMA and FPD may be authorized. The claimant accepted the final job offer and was appointed to the position, effective October 19, 2015. Although LQA was not authorized for the position, prior to his appointment, the claimant was determined ineligible for the allowance based on his failure to provide relevant documents, e.g., a Department of Defense form 214 and a showing of intact return transportation entitlement. The agency asserts these documents were needed to make a conclusive determination. The agency further states that since the claimant cannot be considered eligible for LQA, he cannot be considered eligible for SMA and FPD. The claimant asserts that his inability to receive SMA and FPD has resulted in loss wages.
As provided under 5 USC 5923(a), LQA is an allowance that may be provided to an employee to help supplement the cost of “rent, heat, light, fuel, gas, electricity, and water” and may only be granted under the following circumstances:
When Government owned or rented quarters are not provided without charge for an employee in a foreign area […].
The Department of State Standardized Regulations (DSSR) set forth the basic criteria for the granting and payment of LQA. Within the scope of these regulations, the head of an agency may issue additional implementing instructions for the guidance of the agency with regard to the granting of and accounting for these payments.
As stated in DSSR section 031.11, 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, Department of Defense Instructions (DoDI) 1400.25-V1250, 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 record shows that the claimant was serving in the U.S. Army National Guard in Kosovo on assignment when he applied for the General Supply Specialist position and had returned to the United States when the agency extended him the firm job offer. The claimant does not dispute these events. Therefore, the claimant was employed and resided in Kosovo 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 he accepted the formal job offer. Therefore, the claimant is not eligible under DSSR 031.11.
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 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.]
If government-owned quarters were not provided by the agency, the claimant would likely meet section 031.12a because his presence in Kosovo is directly attributable to his employment with the United States Army. However, DSSR section 031.12b further 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 Kosovo, where he 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 military 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.
The DSSR outlines the criteria in which an agency may authorize allowances beyond LQA. DSSR 031.2 Other Allowances specifies that an employee may only receive separate maintenance allowance (SMA) if they are eligible to receive LQA. It states:
Post Allowances prescribed in subchapter 220, danger pay allowance prescribed in Chapter 650 and the compensatory time off prescribed in Chapter 800 may be granted to employees defined in Section 040i. Other cost-of-living allowances (foreign transfer allowance, home service transfer allowance, separate maintenance allowances, education allowances, and educational travel), and difficult to staff incentive differential, prescribed in subchapters 240, 250, 260, 270, 280, and 1000, respectively, may be granted subject to exceptions contained in the foregoing chapters, only to those employees who are eligible for quarters allowances under Section 031.1. Employees of the Peace Corps shall not be eligible for allowances mentioned in this section except as may be expressly authorized by the Director of the Peace Corps in amounts determined by him/her not in excess of those determined in accordance with the relevant provisions of Chapters 200 and 650.
Similarly, DSSR 031.3, Post Differential provides that an employee may only receive a post differential if they are eligible to receive LQA. It states, in relevant part “Post differential prescribed in Chapter 500 may be granted to employees who are described in Sections 031.11 and 031.12 (eligible for quarters allowances)…”
As stated above, the claimant’s official job offer stated that LQA would not be authorized as the claimant would be living in government-owned quarters. Pursuant to DSSR 031.2 and 031.3, receiving post allowances and/or pay differentials is contingent upon whether the employee is eligible to receive LQA. In this instance, the claimant was deemed ineligible as he does not meet basic eligibility requirements found in DSSR section 031.11 or 031.12b.
LQA is an overseas allowance and, as such, not an automatic salary supplement, nor an entitlement. 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).
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.