Washington, D.C.

U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code

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Kimberly A. Steide, DPA
Principal Deputy Associate Director
Agency Compliance and Evaluation
Merit System Accountability and Compliance

06/02/2025

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Date

The claimant is a current Federal civilian employee of the U.S. Department of the Navy (hereafter referred to as “agency” and “Navy”), assigned to the Naval Air Systems Command, Fleet Readiness Center East, in Yokota, Japan. He requests the U.S. Office of Personnel Management (OPM) reconsider the agency’s denial of living quarters allowance (LQA). We received the claim on August 15, 2024, and the agency administrative report (AAR) on October 25, 2024. For the reasons discussed herein, the claim is denied.

The claimant is currently assigned to an Electronic Technician, GS-0856-11, position with the Naval Air Systems Command, Fleet Readiness Center East, in Yokota, Japan, effective June 17, 2024. Prior to appointment the claimant was an active-duty member of the U.S. Armed Forces. The claimant separated from the U.S. Armed Forces in Okinawa, Japan, on November 26, 2021. After which, the claimant was hired as a contractor with two U.S. based firms, Amentum Pacific Architects and Bell Flight-Textron. The claimant was employed with Amentum Pacific Architects, from October 18, 2021, to December 2, 2022, then with Bell Flight-Textron from December 19, 2022, to December 2, 2023. On September 18, 2023, the claimant was “identified as an applicant” for his current position with Navy and on December 9, 2023, the claimant accepted the agency’s tentative job offer. On December 1, 2023, the claimant used his return transportation rights to travel back to the United States where he says he was “residing with friends and moving about.” On January 15, 2024, the claimant was determined ineligible to receive LQA for having multiple overseas employers and the use of his return transportation rights during the recruitment process. The claimant requests that the agency’s denial be reversed because they were “incorrect” according to established regulations and he is further supported by “the issuance of a permanent duty change of station.”

The Department of State Standardized Regulations (DSSR) set forth basic eligibility criteria for the granting of LQA. The DSSR contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas. Under DSSR section 031.11, LQA may be granted to employees recruited in the United States. It states in 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.

According to the record, the claimant applied for the Electronics Technician, GS-0856-11, position, outside the United States. Therefore, the claimant did not meet section 031.11 of the DSSR at the time of his selection and was ineligible for LQA as a stateside hire.

The agency also determined the claimant did not meet the basic requirements of a non-stateside hire under DSSR section 031.12, which states:

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.

The claimant meets DSSR 031.12a in that his presence in Japan is fairly attributable to his current employment as an Electronic Technician, GS-0856-11, in Yokota, Japan.

However, the record shows that the claimant had multiple overseas employers prior to his appointment. Section 031.12b allows LQA eligibility in those instances where the employee, prior to appointment, had substantially continuous employment with one of the entities listed under b1 through 4, and which entity (i.e., the singular usage of “such employer”) recruited the employee in and provided return transportation to the United States or its territories or possessions. Therefore, by extension, an employee who has had more than one “employer” overseas prior to federal appointment would be disqualified because their initial overseas employer, rather than the employer immediately preceding appointment, would have recruited the employee in the United States.

Immediately prior to his selection with the Navy, the claimant was employed by the contractor, Bell-Flight Textron in Okinawa, Japan. Prior to this employment, the claimant was employed by another contractor, Amentum Pacific Architects in Okinawa, Japan. In addition, the claimant was recruited in the United States by the U.S. Armed Forces, prior to his arrival in Japan. As such, prior to his selection for the Electronic Technician position in Yokota, Japan, the claimant had not been recruited in the United States by the contractor, Bell-Flight Textron, as evidenced by the Navy’s AAR to OPM, in which Navy stated thus. Further, his employment with both Amentum Pacific Architects and Bell-Flight Textron in Okinawa, Japan broke the continuity of employment by a single employer (i.e., “such employer that recruited him in the United States”). Consequently, the claimant also does not meet this requirement as stipulated in the DSSR.

In addition, DSSR section 031.12b stipulates that an employee recruited outside the United States must, immediately prior to appointment, have been recruited in the United States by one of the enumerated entities which provided return transportation back to the United States. On December 1, 2023, the claimant used his return transportation rights to travel back to the United States. Although the claimant was tentatively offered the job on December 8, 2023, just a few days after traveling back to the United States, the claimant was not in the overseas area when he accepted the position on December 9, 2023. 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. Although the claimant had return transportation rights back to the United States during a portion of the recruitment process, an employee undergoing the recruitment process in line with section 031.12b must maintain their transportation rights during the entire process. According to the Under Secretary of Defense Memo dated January 3, 2018, titled New Living Quarters Allowance Guidance, the recruitment process is defined “as the time of application through the acceptance of the [f]ormal offer of employment.” The claimant’s transportation rights were not intact during the entire recruitment process for his current position and therefore, DSSR 031.12b is not met.

Lastly, the agency determined the claimant did not meet the basic requirements under DSSR section 031.15, which states:

Notwithstanding the provisions of Section 031.12, quarters allowances prescribed in Chapter 100 may be granted to employees who, immediately prior to appointment or assignment to the position for which recruited, were deployed or employed in a combat zone (see definition in Section 040t) supporting contingency operations by:

(1) the United States Government, including its Armed Forces; or

(2) a single United States firm, organization, or interest not immediately preceded by any prior such employment overseas; or

(3) an international organization in which the United States Government participates; and

immediately prior to meeting one of the above circumstances, were customarily resident in the United States, its territories, or possessions, or had met one of the above conditions and returned to the United States, its territories, or possessions during recruitment.

Although the claimant was initially deployed to Japan as a member of the U.S. Armed Forces, he was not in a combat zone. Therefore, he is ineligible to receive LQA under DSSR 031.15.

Furthermore, the Department of Defense Instruction 1400.25 V1250 specifies that overseas allowances are not automatic salary supplements, nor are they entitlements. The statutory and regulatory languages are permissive and give agency heads considerable discretion in determining whether to grant LQA to agency employees. Thus, an agency may deny LQA payments 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 section 178.105 of title 5, Code of Federal Regulations, 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). In this case, the claimant failed to do so. Since an agency decision made in accordance with established regulations and within its discretionary authority as is evident in the present case cannot be considered arbitrary, capricious, or unreasonable, there is no basis upon which to reverse the agency’s decision, and the claim is therefore denied.

This settlement is final. No further administrative review is available within the OPM. Nothing in this settlement limits the claimant’s right to bring an action in an appropriate United States court.

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