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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Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance


04/14/2023

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Date

The claimant is a Federal civilian employee of the Directorate of Public Works, U.S. Army Garrison Bavaria, U.S. Army Installation Command, U.S. Department of the Army (DA), in Grafenwoehr, Germany. He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s denial of living quarters allowance (LQA). We received his claim on April 26, 2022, and the agency administrative report (AAR) on July 14, 2022. For the reasons discussed herein, the claim is denied.

From December 1, 2019, through approximately July 2021, the claimant was on an extended vacation outside the continental United States (OCONUS) in various countries in Europe. Between July and August 2020, he briefly worked for an unnamed U.S. firm and conducted site visits for them in Germany and the United Kingdom (UK). On or about December 20, 2020, while living in Valencia, Spain the claimant applied for his current position as Supervisory General Engineer, GS-0801-13, with DA in Germany. On March 16, 2021, while living in London, UK he accepted the agency’s tentative job offer for the aforementioned DA position. On April 29, 2021, the agency informed the claimant he was determined ineligible to receive LQA. Nevertheless, the claimant proceeded with the recruitment process. According to the agency, he returned to his home in Hawaii sometime around early July 2021, where he received government-funded travel orders and entered on duty in his current position with DA in Germany on July 19, 2021.

The agency determined the claimant was ineligible for LQA under sections 031.11 and 031.12 of the Department of State Standardized Regulations (DSSR) and relative implementing guidelines in the Department of Defense Instruction (DoDI) 1400.25, Volume 1250.  In its AAR to OPM, the agency explained its decision as follows:     

… [the claimant] has not resided permanently in the United States since early December 2019 until early-mid July 2021 when he returned to the United States only to return to Europe for his current Federal civilian employment. The recruitment process, i.e., application, selection and acceptance of job offer, took place whilst he was in Europe, albeit as a sojourner. Thus, given [the claimant]’s hiring circumstances, the agency could not consider him 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 him as an employee recruited outside the United States, despite the circumstance that he eventually transferred from the United States to Germany under a government-funded travel order…

Further, [the claimant’s] recruitment process could not be reconciled with the provisions of the DSSR § 031.12a and b., for him to be considered eligible for LQA. None of the criteria identified specifically in the DSSR § 031.12b were met. 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 sojourner in various countries in Europe for an extended period of time is not one that the DSSR considers viable for the grant of a discretionary allowance…

The DSSR contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas. Implementing regulations, such as DODI 1400.25, Volume 1250, Army in Europe Regulations (AER), or other agency implementing guidance may further restrict the provisions of the DSSR but may not extend benefits that are not otherwise permitted by the DSSR. Thus, an LQA applicant must fully meet the relevant provisions of the DSSR before supplemental requirements of the DoDI1400-V1250, AER, or other agency implementing guidance may be applied.

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 OCONUS:

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 believes DA erroneously determined him ineligible for LQA as a U.S. hire for his current position. He attempts to establish residency in the U.S. by asserting maintenance of a home in Hawaii; payment of Hawaii state taxes; participation in primary and general elections; payment of state (Hawaii) professional engineering license fees; and possession of a Hawaii driver’s license as support for his claim that he resided in the U.S. during the recruitment process.

Regardless of the claimant’s assertions the DoDI 1400.25, Volume 1250, clearly indicates 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 recruitment for the position in question. Thus, an employee must be “physically” residing in the United States for the entire recruitment process (i.e., submission of a job application up to and including acceptance of a formal job offer) for the job in question. This language does not allow for a more expansive interpretation, such as residency based on maintenance of a home in Hawaii; payment of Hawaii state taxes; payment of Hawaii professional engineering license fees; possession of a Hawaii driver’s license; and participation in Federal, State, and local elections. Therefore, whether an employee is deemed to be recruited inside or outside the United States depends upon the physical location of the employee throughout the entire recruitment process. See OPM file Number 18-0027, dated March 5, 2019, and 21-0016, dated January 27, 2022.

In this case, the claimant vacationed OCONUS in Europe from approximately December 2019 through July 2021, during which time the recruitment process occurred. Therefore, within the context of section 031.11, he was not permanently and physically residing in the United States during the recruitment for his current position with DA. Consequently, he cannot be considered a U.S. hire under DoDI 1400.25, Volume 1250, and is not eligible to receive LQA under DSSR 031.11.

DSSR 031.12a, is met because the claimant’s current presence in Germany is attributable to his employment with DA.

The claimant does not meet section 031.12b.  Section 031.12b, provides specific conditions under which employees recruited OCONUS may be granted LQA. However, an employee must meet all requirements specified in section 031.12b to be eligible to receive LQA as an OCONUS hire.

We note that both the agency and the claimant state he was recruited for his current position while he was on a personally funded vacation in Europe and that, during the course of his vacation, he was briefly employed by an unnamed U.S. firm (firm) from July to August 2020. However, neither his brief employment with the firm, nor the circumstances surrounding his recruitment while vacationing OCONUS, meets the requirements for OCONUS hires under DSSR 031.12(b).

Although it is possible that the firm in this case may qualify as one of the entities described in b(1) through b(4) of this section, the claimant was not substantially and continuously employment by this firm under conditions which provided for his return transportation to the United States or one of its enumerated territories or possessions. Instead, his employment with the firm was circumstantial and not the primary purpose of his presence in Europe. Furthermore, all travel to and from this European vacation was paid for by the claimant and only after his return to Hawaii, did he receive government paid travel orders to his current OCONUS position with DA in Germany. Therefore, the claimant is not eligible to receive LQA under DSSR 031.12 as an OCONUS hire.

Both the agency and the claimant discuss and analyze supplemental agency instructions (i.e., AER 690-500.592, involving hard to fill positions) associated with LQA in their submissions to OPM. However, an employee must fully meet DSSR requirements for LQA before additional supplemental agency instructions can be applied. In this case, the claimant did not meet he DSSR requirements for LQA. Therefore, the additional supplemental agency instructions 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 discussed in this decision.

The claimant asserts his decision to accept his current position without LQA compensation was based in part on advice and/or misinformation provided to him by his chain of command.  He states:

“…if I didn’t sincerely believe that the initial determination of ineligible was incorrect, I would not have accepted the position. I’ve taken the risk of accepting the position because of that belief, also because I received encouragement from my chain of command that they believed the determination would be overturned on appeal or waived…”

It is well settled by the courts that a claim may not be granted based on misinformation provided by agency officials. Payments of money from the Federal Treasury are limited to those authorized by statute, and erroneous advice or information provided by a government employee cannot bar the Government from denying benefits which are not otherwise permitted by law. See Office of Personnel Management v. Richmond, 496 U.S. 414, rehearing denied, 497 U.S. 1046, 111 S. CT. 5 (1990). Furthermore, even if they have no actual knowledge, Federal employees are charged with constructive knowledge of statutory requirements pertaining to them and of the implementing regulations authorized to be issued by statute. See B-173927, October 27, 1971: B-187104, April 1, 1977; and B-192510, April 6, 1979.

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 DA’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.

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