U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Riyadh, Saudi Arabia
Damon B Ford
Compensation and Leave Claims
Program Manager
08/10/2021
Date
The claimant is a Federal civilian employee of the U.S. Air Force (AF) in Riyadh, Saudi Arabia. He requests the U.S. Office of Personnel Management (OPM) reconsider the agency’s denial of living quarters allowance (LQA), separate maintenance allowance (SMA), and post differential. We received the claim on March 1, 2021, and the agency administrative report on April 20, 2021. For the reasons discussed herein, the claim is denied.
On January 24, 2019, AF posted a job announcement for a Logistics Management Specialist, GS-0346-12, position with duty station in Riyadh, Saudi Arabia. The claimant applied for this position and on March 28, 2019, while still employed by a U.S. Army contractor in Riyadh, he was selected for the position. At the time of selection, the agency determined the claimant was ineligible for LQA due to his personal circumstances. Nevertheless, he accepted the job offer without LQA. On June 30, 2019, the claimant’s employment with the U.S. Army contractor ended. Thereafter, he relocated to the Philippines. Sometime around December 2019, the claimant returned to the United States and entered on duty with AF on February 3, 2020. On November 11, 2020, he received permanent change of station (PCS) orders and subsequently relocated to Riyadh, Saudi Arabia.
The agency determined the claimant was ineligible for LQA under sections 031.11 and 031.12 of the Department of State Standardized Regulations (DSSR). Additionally, the agency cites Department of Defense Instruction (DoDI) 1400.25, Volume 1250, dated February 23, 2012, and the Under Secretary of Defense (OUSD) memorandum, dated January 3, 2018, as support for their decision to deny the claimant LQA. The agency also determined the claimant was ineligible to receive SMA and post differential.
The claimant asserts that he is “not receiving any allowances and [is] being paid the same as [he] would be if [he] was working in the states.” He further states “I understand I was not in the U.S. when I accepted the position, (contract completed June 2019) but I’m hopeful due to some circumstances this will be taken into consideration.”
The DSSR contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas, including LQA and Post Differential benefits. Therefore, applicants must fully meet the relevant provisions of the DSSR to be eligible to receive LQA and Post Differential benefits.
LQA may be granted to employees recruited in the United States (U.S.) or one of its enumerated territories or possessions, as stated in DSSR section 031.11:
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:
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.
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. Therefore, an employee must be physically residing in the United States from the time of application until acceptance of a formal job offer. In this case, the claimant applied for his current Federal position while he was employed as a U.S. Army contractor, in Riyadh. Therefore, since he applied for the position while he was physically residing in Riyadh, as opposed to in the United States, he does not meet LQA eligibility criteria under DSSR section 031.11 in connection with the implementing regulations in DoDI.
LQA may also be granted to employees recruited outside the U.S. or one of its enumerated territories or possessions, under conditions described in DSSR section 031.12:
Quarters allowances prescribed in Chapter 100 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.
DSSR 031.12a, is met because the claimant’s presence in Riyadh, Saudi Arabia is attributable to his employment with AF. However, the claimant must also meet all requirements specified in section 031.12b in order to be considered eligible to receive LQA.
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 living and working in Saudi Arabia, where he applied to and was selected for his current position. Thereafter, he traveled to the Philippines and then returned to the United States, where he entered on duty with AF and received PCS orders to return to Saudi Arabia. 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 individual is employed overseas by one of the qualifying entities with return transportation benefits to the United States. The claimant provided no evidence that return transportation rights were afforded to him by the U.S. Army contractor and were still intact during his recruitment by AF. Therefore, DSSR 031.12b is not met.
The claimant also requests OPM review his agency’s denial of post differential and SMA benefits in conjunction with his current position.
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 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) …”
Pursuant to the plain language of DSSR 031.2 and 031.3, receiving post differential and SMA are contingent upon whether the employee is eligible to receive LQA. In this instance, the claimant was deemed ineligible under basic eligibility requirements found in DSSR section 031.11 and 031.12b. Accordingly, the claims for LQA, SMA, and post differential are denied.
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.