Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Stuttgart, Germany
Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
01/27/2022
Date
The claimant is a Federal civilian employee of the U.S. Department of the Army (Army) in Stuttgart, Germany. She requests that the U.S. Office of Personnel Management (OPM) reconsider the agency’s denial of her living quarters allowance (LQA) and waive the living quarters allowance (LQA) eligibility requirements described in section 031.12(b) of the Department of State Standardized Regulations (DSSR), due to unusual circumstances associated with her case. We received the claim request on May 24, 2021, and the agency administrative report on August 25, 2021. For the reasons discussed herein, the claim is denied.
On November 23, 2019, while attending school and residing in Grenoble, France, the claimant applied for her current Foreign Affairs Specialist, GS-0130-13, position with Army’s U.S. Africa Command in Stuttgart, Germany. On December 17, 2019, she returned to the United States and reestablished residency. On January 13, 2020, she accepted a tentative job offer for her current position. Shortly thereafter, and without having received an official LQA eligibility determination from the agency, the claimant accepted a final job offer, received permanent change of station (PCS) orders, and traveled to Stuttgart, Germany, where she was appointed to her current position on July 6, 2020.
Upon appointment, the agency determined the claimant did not meet the basic eligibility requirements to receive LQA under sections 031.11 and 031.12 of the Department of State Standardized Regulations (DSSR) and the Department of Defense Instruction (DoDI) 1400.25, Volume 1250. Specifically, the agency states:
…The recruiting process commenced in late November 2019 whilst she was still residing in France; she returned to the United States on 17 December 2019 where she eventually was offered and accepted the tentative job offer on 10 January 2020 and 13 January 2020, respectively. Thus, given [the claimant’s] hiring circumstances, the agency could not consider her an employee recruited in the United States, or “U.S. hire”, and consequently, could not employ the provisions of the DSSR § 031.11 and associated DODI 1400.25-V1250, but had to treat her as an employee recruited outside the United States, despite the circumstance that she eventually transferred from the United States to Germany under a government-funded PCS order. OPM consistently held that an “employee’s status as ‘U.S hire’ is based on physical residency at the time of recruitment for the position in question…
…None of the criteria identified specifically in the DSSR § 031.12b were met [by the claimant]. Said section is rather specific in the identification of individuals who seek the eligibility for LQA when they apply for federal positions with the DOD whilst already residing in the overseas area. Exhibiting the characteristics of a student taking a degree with a European university in Europe for an extended period of time is not one that the DSSR considers viable for the grant of a discretionary allowance [LQA]. …
The claimant does not disagree that she fails to meet the basic eligibility requirements under DSSR sections 031.11 and 031.12 of the DSSR and DoDI 1400.25, Volume 1250. Instead, she asserts that the DSSR section 031.12(b) lacks specific guidance regarding employees who had been overseas students prior to recruitment to Federal overseas positions. She states:
…Section 031.12(b) [DSSR] only addresses employment. I was temporarily overseas as a student when I applied for my current position in November 2019. I would be determined [LQA] eligible if I was employed overseas (and recruited in the U.S.) but there is no guidance for students…
The DSSR contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas. DoDI 1400.25, Volume 1250, implements the provisions of the DSSR for Army employees. Because LQA is a discretionary allowance, implementing regulations may be more restrictive, but not more permissive, than the DSSR; i.e., it may impose additional limitations on the granting of LQA but may not extend benefits that are not otherwise permitted by the DSSR.
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:
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 her current Federal position while she was residing in France as a student. Therefore, since she applied for the position while she was physically residing in France, as opposed to in the United States, she 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. It provides:
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; or
as a condition of employment by a Government agency, the employee was required by that agency to move to another area, in cases specifically authorized by the head of the agency.
Subsection 031.12b may be waived by the head of agency upon determination that unusual circumstances in an individual case justify such action.
Relative to section 031.12(c), DoDI 1400.25, Volume 1250, Enclosure 2, 2.e., states:
Section 031.12(b) of reference (c) [DSSR] will be waived for locally-hired U.S. citizen employees who have, immediately prior to appointment, been directly employed by the United States as foreign nationals under third-country contracts or agreements that provided them with LQA or housing at no cost.
The claimant meets section 031.12a because the claimant’s presence in Stuttgart, Germany is attributable to her employment with Army. However, the claimant must also meet all requirements specified in section 031.12b to be considered eligible to receive LQA.
The claimant does not meet section 031.12(b). Section 031.12(b) specifies the conditions under which employees recruited outside the United States may be granted LQA. In the claimant’s case, the recruitment process began when she applied for her current position while living and attending school in Grenoble, France. The recruitment process continued after she returned, at her own expense, to the United States and concluded when she accepted Army’s formal job offer and received PCS orders to relocate to Stuttgart, Germany. Thus, upon her return to the United States, she could no longer be considered to have been recruited outside the United States for purposes of section 031.12(b). Section 031.12(b) is also not met in that, prior to recruitment, she had not been substantially continuous employed by one of the qualifying entities described in b(1) through b(4) under conditions which provided for her return transportation to the United States. Instead, she was a United States citizen living and attending school in France when she applied for her current position and paid for her own return transportation to the United States upon completion of her foreign education.
The claimant does not meet section 031.12(c). Section 031.12(c) applies to existing Federal employees rather than new hires in both its language that the employees have been required by the agency to move to “another area” as opposed to, for example, the “initial duty station,” and that the move be “in cases specifically authorized by the head of agency.” The latter would apply, for instance, to base closures or transfers of function that are specifically authorized by agency heads, which authorization is not required for routine Federal appointments. See OPM File Number 14-0016, June 4, 2015.
The claimant does not disagree with the agency’s decision to deny her LQA based on their application of sections 031.11 and 031.12 of the DSSR and DoDI 1400.25, Volume 1250. Instead, she asks OPM to waive the LQA requirements described in DSSR 031.12(b) due to unusual circumstances associated with her case. She states:
…Given the unusual circumstances of my case, I ask for 031.12b to be [waived] given that student status is not addressed [in DSSR 031.12(b)], and I PCSed to Germany with an unclear determination…
OPM adjudicates compensation claims for certain Federal employees under authority of section 3702(a)(2) of title 31, United States Code (U.S.C.). The authority in U.S.C. section 3702(a)(2) is narrow and limited to determining if monies are owed the claimant under the controlling statutes or regulations. Section 3702 does not include the authority to waive provisions of the DSSR, which determine LQA eligibility. However, DSSR section 031.12(c), clearly authorizes the head of the agency to waive LQA eligibility requirements described under subsection 031.12(b). Therefore, the authority to waive LQA eligibility requirements described under subsection 031.12(b), rests with the agency and OPM has no jurisdiction, within the context of the claims adjudication function it performs under 31 U.S.C. section 3702(a)(2), to consider the claimant’s request for a waiver allowing her to receive LQA in her current position.
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. Therefore, her 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.