Washington, DC

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

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Robert D. Hendler
Classification and Pay Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance


11/09/2015

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Date

The claimant is a Federal civilian employee of the U.S. Army Installation Management Command, Department of the Army (DA), in Wiesbaden, Germany.  He requests the U.S. Office of Personnel Management (OPM) reconsider the agency’s denial of his request for living quarters allowance.  We received the request from the claimant on October 7, 2014, the agency administrative report (AAR) on May 20, 2015, and the claimant’s comments on the AAR on July 24, 2015.  For the reasons discussed herein, the claim is denied.

The claimant was appointed to his Federal service position as a GS-301-11 Mobilization and Deployment Specialist, effective December 30, 2013.  The agency determined him ineligible for LQA at the time of appointment because he did not meet eligibility provisions in Department of State Standardized Regulations (DSSR) section 031.11 in connection with the Department of Defense Instruction (DoDI) 1400.25, Volume 1250, which permits the granting of LQA to employees recruited in the United States.

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.  Thus, DoDI 1400.25, Volume 1250, implements the provisions of the DSSR but may not exceed their scope; i.e., extend benefits that are not otherwise permitted under the DSSR.  Therefore, an LQA applicant must fully meet the relevant provisions of the DSSR before the supplemental requirements of the DoDI or other agency implementing guidance may be applied.

DSSR section 031.11 states 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, DoDI 1400.25, Volume 1250, 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.

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.

The claimant asserts his eligibility for LQA as a “U.S. hire” pursuant to DSSR section 031.11 above.  The record shows he, as a military member, had been stationed in Germany from July 2001 to August 2011 with periods of deployment to Iraq, Kuwait, and Turkey.  He was subsequently assigned to the Joint Base Lewis-McChord in Washington State, to which he returned after his April 15, 2012, to January 23, 2013, deployment to Afghanistan.  Effective July 11, 2013, the claimant was placed on military leave until his December 31, 2013, retirement from the military.  The agency states he, at that point, used his military transportation entitlement to ship his household goods from the United States to Germany.  The claimant travelled to Poland and Germany while on military leave, returning to his Tacoma, Washington, residence on August 19, 2013.  While there, he applied for the Federal service position advertised from November 8 to 12, 2013.  Having purchased a round-trip airline ticket, he returned to Germany purportedly for personal reasons on November 23, 2013.  Instead of returning to the United States, the claimant remained in Germany to accept the job offer extended by the DA on December 9, 2013, and appointment to the Federal service position on December 30, 2013.

The agency explains the denial of LQA to the claimant in its AAR to OPM:

It is evident from the record that [the claimant], in anticipation of his military retirement, took decisive actions to establish his future permanent residence in Germany.  Thus, his travels to Germany while on military leave in mid and late 2013, cannot be considered visits that may be considered undertaken as a regular tourist on a sight-seeing tour; rather, those visits seem to have been for the purpose of reuniting with his family and to re-establish permanent residency in Germany.  This is further supported by the fact that [the claimant’s] spouse, and presumably his children, resided permanently in Germany in mid-2013 as she resumed her employment with [Army and Air Force Exchange Service] in September 2013.

Also pointing to the claimant’s DD 214, Certificate of Release or Discharge from Active Duty, documenting his retirement to support its LQA denial, the agency states in its AAR to OPM:

[The claimant’s] actions in not only establishing a residence in Germany for him and his family well in advance of his retirement from the U.S. Army by not only providing a forwarding address and nearest relative residential address in Germany on his DD214, but also to have shipped his household goods to an address in Germany in the summer of 2013, culminating in him accepting a job offer in Wiesbaden, Germany while on a visit with his family and not returning to the United States, show that he is outside the scope of the DSSR’s and DOD’s guidance and characterization of a U.S. hire.

The claimant disagrees with the agency’s rationale, stating that (1) using his military transportation entitlement to ship household goods from the United States to Germany was for the purpose of “establishing a residence” for his family, not himself; (2) he was “not in [Germany] more than few weeks at a time” and thus his visits there were as a “tourist”; and (3) he applied for the Federal service position from his Tacoma, Washington, residence and identified his address on his resume as his spouse’s Germany-based address to “improve [his] chances of obtaining the position.”  He subsequently provided property and tax documents to show his ownership of the Tacoma-based residence.

Neither the claimant nor the agency dispute he maintained a residence in Tacoma, Washington, and that he applied for the Federal service position while there.  The claimant further states concerning his Tacoma-based residence that he has “since rented out the house, but it should be noted that [he] did not put it on the market until 18 February 2014,” a decision he maintains he did not make until after he was offered employment in Germany.  Regardless, his owning a residence in the United States and his agreeing to rent it out following rather than preceding his accepting employment with the DA in Germany does not establish his physical residency in the United States during the entire recruitment process per the definition of “U.S. hire” in DoDI 1400.25, Volume 1250; i.e., from when he initially applied for through the time he accepted the position in question.[1]  This language does not allow for a more expansive interpretation such as a “permanent residence” or “home of record” in the United States.  Whether an employee is deemed to be recruited in the United States or outside the United States is dependent on the actual physical residency of the employee when recruited, not the existence of a legal or “permanent” residence at some other place.  The claimant acknowledges he was in Germany when he interviewed for, was offered, and accepted the position from the DA, thus he was not permanently or physically residing in the United States from the time he applied for employment until and including the date he accepted the formal job offer as discussed later in this decision.  The term “recruitment” is not defined in section 5923 of title 5, United States Code (U.S.C.), the statutory provision authorizing LQA; 5 U.S.C. 5922, the provision granting the President authority to promulgate regulations governing the administration of LQA; or the DSSR.  Deference, however, is to be afforded to an agency’s interpretation of regulations drafted by another agency where, as here, the interpreting agency adopts and administers the subject regulations, and particularly when an agency is given the authority to implement the regulations of another agency.  Bortone v. U.S., 110 Fed.Cl. 668 (2013).  The DA’s interpretation of the term “recruitment” as encompassing the entire recruitment process, from applying for up to and including accepting the position, is consistent with the purpose of LQA as an incentive for prospective employees to move overseas to work for the Federal Government.

The claimant seeks to characterize his trips abroad as that of a “tourist” with stays of short duration and clearly of transitory status, while maintaining actual physical residency in the United States.  However, his characterization of his actions as those of a tourist is unconvincing in light of numerous decisions he made on his part to identify his “mailing address after separation” and that of his nearest relative, his spouse, as one in Germany on his DD 214; to ship his household goods from the United States to Germany upon his military retirement; and to identify an address, again, in Germany on his employment application.  In seeking to characterize himself as a tourist on his overseas trips, he maintains he has not established a residence in Germany.  Specifically in his comments to the AAR, he states:

The address on the DD214 in Germany was not an established residence.  I lived there while stationed in Germany, but have NOT moved or lived there when I came to visit, and neither my family lived there since August 2011.  I used this address as I had my mail forwarded from there to my friends’ house and needed an address for DD214.  I was NOT sure where I will end up upon retirement as this was based on my finding a job.  I used my transportation entitlement to move most of my household goods to Germany, but not the address on my DD214.  The reasons for this was the [sic] my spouse and children were moving to Germany in August, which does not automatically means that I was moving.  I did NOT have an established residence when I shipped my [household goods] to Germany…[sic]

The claimant failed to provide a rental, residential, or other property agreement and other evidence to clearly demonstrate that the German residence, to which he had his household goods shipped, was that of his spouse’s alone.  His assertions that he had not established a German residence are unconvincing in the absence of such evidence.  The ordinary conclusion of shipping household goods to a Germany-based address, having a family residing at that address, and identifying that same address on an application for employment would corroborate the setting up of or actual existence of a residency, not the actions and decisions of a typical “tourist.”  Even disregarding the number and duration of trips he reports having taken to Germany within a relatively short span of time, the claimant’s actions and decisions show familial and financial ties to Europe in general and Germany, specifically, that are uncommon to an individual travelling abroad as a “tourist.”  Furthermore, the claimant states the “reasons [he] identified a local German address was to improve [his] chances of obtaining the position, as it was listed “local hire.””  However, the vacancy announcement provided by the agency at our request shows the position was not limited to the local community, as inferred by the claimant, but open to all status candidates worldwide; thus, the decision to list a German address on his employment application was apparently for reasons other than those stated.  Without benefit of compelling evidence beyond mere assertion, we have no basis on which to conclude the agency’s determination of his ineligibility under DSSR section 031.11 was in error.  Therefore, he may not be considered a “U.S. hire” for LQA eligibility purposes under DSSR section 031.11.

The claimant states in his request to OPM that he specifically meets LQA eligibility requirements by reference to a September 19, 2013, policy advisory issued by the Department of Defense regarding the U.S. hire definition.  The advisory states, in part, that “[t]emporary absences from the U.S. for reasons such as vacations, temporary duty assignments…do not alter a person’s “U.S. hire” status.”  OPM applies agency-developed policies to the extent such guidance is in agreement with the DSSR, and conversely we will not consider instructions that contradict DSSR section 031 when such implementing instructions exceed the scope, meaning, or intent of the DSSR.  The policy advisory, though rescinded in May 2015 as stated by the agency in its AAR to OPM, was in force at the time of the claimant’s LQA eligibility determination.  Regardless, we note the policy advisory would not apply to his situation because, as stated above in our discussion of the DSSR section 031.11 criteria, we found his absence from the United States to be inconsistent with that of a vacation, temporary duty assignment, or other temporary absence described by the September 2013 policy advisory.

DoDI 1400.25-V1250 specifies that overseas allowances are not automatic salary supplements, nor are they entitlements.  They are specifically intended as recruitment incentives for U.S. citizen civilian employees living in the United States to accept Federal employment in a foreign area.  If a person is already living or planning on living in a foreign area, that inducement is normally unnecessary.  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 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 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.

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