Washington, D.C
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Ramstein, Germany
Damon B. Ford
Pay and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
08/27/2024
Date
The claimant is a Federal civilian employee of the Air Force Installation & Mission Support Center, Military Transportation Command (MTC): 1M, Basing and Bed Down; Officer’s Spouses Club (OSC): Combat Engineering Battalion (CEB), Ramstein Air Base Squadron (ABS), U.S. Department of the Air Force (AF) in Ramstein, Germany. He requests the U.S. Office of Personnel Management (OPM) “overturn” AF’s denial of living quarters allowance (LQA) for his current position. We received his claim on December 19, 2022, and the agency administrative report (AAR) on April 28, 2023. For the reasons discussed herein, the claim is denied.
AF’s April 28, 2023, AAR to OPM provides few dates concerning key events associated with the claimant’s case. However, the claimant’s OPM claim request provides dates for many of these key events. Since AF does not contest the dates provided by the claimant, we have used these dates to develop the sequence of events for this case.
Prior to his retirement from the U.S. Department of the Army (DA) on February 28, 2021, the claimant was stationed at Camp Humphreys, South Korea on military permanent change of station (PCS) orders. After his retirement and separation from military service, the claimant elected to remain in South Korea, where he lived and worked as a flexible employee with DA’s Child Youth Services (CYS) at Camp Humphreys.
In March 2022, while working and residing in South Korea, the claimant applied to and interviewed for a Federal civilian contract position with Dynamic Systems Technology, Inc. (DysTech), also located at Camp Humphreys, South Korea.
In April 2022, the claimant returned to the continental United States (CONUS) due to concerns that his position with CYS was not covered under the North Atlantic Treaty Organization (NATO) Status of Forces Agreement (SOFA), and that his continued, unauthorized presence in South Korea may result in fines or his incarceration by the South Korean government.
In May 2022, the claimant accepted an offer of employment with DysTech, returned to South Korea, and entered on duty.
Between May 2022 and April 2023, the claimant applied to and was selected for his current position as Logistics Management Specialist, GS-0346-13 with AF in Germany. On April 10, 2023, he was appointed to this position in Ramstein, Germany.
On November 23, 2022, prior to appointment, the claimant completed and submitted a Personal Eligibility Questionnaire for LQA. Thereafter, the agency determined the claimant was neither eligible to receive LQA as a U.S. hire under section 031.11 of the Department of State Standardized Regulations (DSSR), and relative implementing guidelines in the Department of Defense Instruction (DoDI) 1400.25, nor as an overseas hire under DSSR 031.12. In its AAR to OPM the agency states, in part:
[The claimant] did not reside in the U.S. during the application process, but instead resided in [South] Korea. [the claimant] went back to the U.S between his civilian employment and his contractor position due to SOFA issues, however we cannot consider a 12 day stay as ‘residing’ in the U.S. [the claimant] is not eligible to receive LQA in accordance with DSSR para 031.11.
[The claimant] does not meet the personal eligibility requirements as stated in the DSSR 031.12 as a non-stateside hire because he doesn’t meet the singular employment requirement in the DSSR. [The claimant] came to [South]Korea on military PCS orders and retired there, then took up civilian employment with the DA in [South] Korea. Later he started to work for a contractor named Dystech Technology Inc. located in [South] Korea.
The claimant asserts that he meets the LQA requirements under DSSR 031.12, except for the singular employment clause and that he should be granted LQA. He states, in part:
It was determined I am ineligible for LQA, according to DSSR Section 031.12, because I cannot meet the singular employment requirement in the DSSR. From my understanding, I met all the other criteria listed in Section 031.12 other than having singular employment.
The claimant also seems to infer that he meets the U.S. hiring requirement under DSSR 031.11, and DoDI 1400.25, Volume 1250. He states, in part:
…I did not switch to a contractor position while still in [South] Korea. I left [South] Korea, moved back to the states, and was [subsequently] hired by DysTech, a United States contracting company, while I was in the states.
The DSSR contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas.
Section 031.11 of the DSSR states in relevant part:
“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 DSSR 031.11 criteria, DoDI 1400.25, Volume 1250 defines “U.S. Hire” as:
…A person who physically resided permanently in the United States or the Commonwealth of the Northern Mariana Islands from the time the employee applied for employment until and including the date the employee accepted a formal offer of employment…
Section 031.12 of the DSSR provides the following guidance relative to employees recruited outside the continental United States (OCONUS):
Quarters allowances prescribed in Chapter 100 may be granted to employees recruited outside the United States provided that:
-
- 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
- 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.
Both the agency and the claimant discuss the possible impact of NATO SOFA guidelines on the the claimant’s LQA eligibility in their submissions to OPM. However, relevant LQA-related provisions of the DSSR must be fully met before other guidelines, such as NATO SOFA can be applied. In this case, the claimant did not meet DSSR’s basic requirements for LQA. Therefore, the NATO SOFA guidelines discussed by the agency and the claimant are neither relevant nor applicable in determining the claimant’s eligibility to receive LQA and will not be addressed in this decision.
The claimant does not meet the CONUS recruitment provisions under DSSR 031.11. The DoDI 1400.25, Volume 1250, explains that an employee’s status as a “U.S. hire” is based on physical residency in the United States or one of its enumerated territories or possessions during the entire recruitment for the position in question, which includes application, selection, and acceptance of tentative and formal job offers. Thus, an employee must be physically residing in the United States during the entire recruitment process for the job in question to be considered a U.S. hire under DSSR 031.11 and the DoDI 1400.25. Volume 1250.
In its April 28, 2023, AAR to OPM, AF states the claimant applied for his current position while living in South Korea, and the claimant does not contest AF’s statement. Since the claimant was not physically residing in the United States or one of its enumerated territories or possessions during the entire recruitment, he is not eligible to receive LQA under DSSR 031.11, and his claim is denied.
DSSR section 031.12b specifies the conditions under which employees recruited outside the United States may be granted LQA.
The record indicates the claimant applied to and interviewed for his position with DysTech on or about March 2022, while working for CYS and living in South Korea and that he accepted DysTech’s final job offer and received travel orders to South Korea after his return to the CONUS in May 2022. Thus, the recruitment process for the DysTech position began while the claimant was in South Korea but continued and concluded after he returned to the United States. Therefore, prior to his appointment with DysTech, the claimant was not recruited in the United States or one of its enumerated territories or possessions, as required by DSSR 031.12(b). Rather, the recruitment began in South Korea and concluded in the CONUS with the claimant’s acceptance of DysTech’s final job offer.
Additionally, upon his return to the United States, the claimant’s recruitment could not be construed as having occurred outside the United States for purposes of DSSR section 031.12, which is based on the premise that, prior to appointment, the employee is physically located/employed overseas by one of the qualifying entities with return transportation benefits to the United States. See OPM File Numbers 20-0011, 20-0012, and 21-0009. Therefore, the claimant is ineligible to receive LQA under DSSR section 031.12, and his claim is denied.
DoDI 1400.25, Volume 1250, specifies that overseas allowances are not automatic salary supplements, nor are they entitlements. 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 has the authority to deny LQA payments to an employee when the circumstances justify such actions. OPM does not question an agency’s decision to deny LQA unless the agency’s actions are determined to be arbitrary, capricious, or unreasonable. Since AF’s decision to deny LQA to the claimant was made in accordance with the DSSR and DoDI implementing regulations, its decision cannot be construed as being arbitrary, capricious, or unreasonable. Therefore, the claim is denied.
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.