Washington D.C

U.S. Office of Personnel Management
Compensation and Leave 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


02/29/2024

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Date

The claimant is a Federal civilian employee of the Information Management Division, S6, U.S. Army Medical Materiel Center Europe (USAMMCE), U.S. Department of the Army (DA), in Pirmasens, 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 October 24, 2022, and the agency administrative report (AAR) on January 3, 2023. For the reasons discussed herein, the claim is denied.

The claimant was recruited while residing in Sierra Vista, Arizona by the U.S. Department of Defense (DoD) contractor, General Dynamics Information Technology (GDIT), for a position in Kaiserslautern, Germany and began his employment with them on or about November 26, 2018. While employed with GDIT and residing in Germany, the claimant was recruited for his current Federal civilian position as an Information Technology Specialist (Data Management /Applications Software), GS-2210-12, with DA’s USAMMCE in Pirmasens, Germany. The agency determined the claimant ineligible to receive LQA during the recruitment process. Nevertheless, the claimant accepted the agency’s job offer and entered on duty in his current position on August 30, 2020.

The claimant believes the agency erroneously determined him ineligible to receive LQA based, in part, on his belief that the agency incorrectly assummed that GDIT had not recruited him in the United States. The claimant also asserts that his agreement with GDIT specifically provided for his return trip to the United States at the end of his contract. He states, in part:

I have provided documentation such as the ones attached as well as proof of residency from my stateside address showing that I was indeed hired while living in America ( I did this by providing my rental agreement/contract for my Mountain Vista apartment as well as providing my plane ticket to come to Germany)…the question has been and remains with all the evidence showing and proving that I was hired while living in the U.S. [by GDIT] and provided orders/travel and rotation agreements and LQA, how do I not qualify for it now?

In its AAR, dated January 3, 2023, the agency asserts the claimant was ineligible to receive LQA because he did not fully meet the overseas hire provisions of DSSR 031.12 (b). The agency states, in relevant part:

The employment contract [the claimant] entered into with GDIT for employment in Germany from his stateside residence at the time lacked the necessary specificity with respect to him having been employed by that firm under conditions that would provide for return transportation to the United States…the conditions under which he would be relocated following the end of his employment with the firm are ambiguous. Paragraph RELOCATION of his employment agreement identifies return to home of record in the United States, here, Colorado Springs, CO, (and not Sierra Vista, AZ, where he resided when GDIT hired him in October 2018) but also to “an alternate mutually agreed location,” not exceeding $36,500 (see page 4 of the agreement provided by Mr. Little to OPM as part of his claim). This language lacks specificity with respect to the stringent requirements stipulated for the eligibility for LQA found in the DSSR § 031.12b.

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, the Department of Defense Instruction (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:

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 agency discusses supplemental agency instructions (i.e., AER 690-500.592 and current law (i.e., North Atlantic Treaty Organization Status of Forces Agreement (NATO SOFA)) associated with LQA in its submissions to OPM. However, relevant provisions of the DSSR must be fully met before additional supplemental agency regulations can be applied. The claimant does not meet the DSSR requirements for LQA. Therefore, the additional supplemental regulations and laws discussed by the agency are are moot with respect to determining the claimant’s eligibility to receive LQA and will not be addressed further.

The claimant believes the agency found him ineligible for LQA, in part, because they did not consider him a U.S. hire for his GDIT position and, by extension, impacting his eligibility for LQA in his current position under DSSR 031.12(b). However, the agency states in the AAR report to OPM:

There is no dispute that GDIT recruited [the claimant] in the United States for one of their positions in Kaiserslautern, Germany.

Since the agency clearly acknowledges that GDIT recruited the claimant in the United States, the claimant’s concern regarding the U.S. hire status of his position with GDIT is unfounded. After reviewing the record, OPM concurs with the agency’s determination that GDIT’s recruitment of the claimant meets the definition of “U.S. hire” in DSSR 031.11 and DoDI 1400.25, Volume 1250. Therefore, the U.S. hire status of the claimant’s GDIT position is not in question, nor does it negatively impact his eligibility for LQA under DSSR 031.12(b) and will not be discussed further in this decision.

The claimant meets DSSR 031.12(a), because his actual place of residence in Germany is fairly attributable to his employment with DA’s USAMMCE.

DSSR 031.12(b), allows LQA eligibility in those instances where the employee, prior to appointment, had substantially continuous employment with one of the entities listed under (b)1 through (b)4, and “such employer” recruited the employee in and provided return transportation to the United States, or one of its enumerated territories or possessions. The claimant does not meet DSSR 031.12(b). The “Relocation” section of the October 25, 2018, “Agreement” between GDIT and the claimant states in part:

The total maximum amount of reimbursements and/or direct payments to a third party for which Employee has been authorized to receive in this regard is not to exceed $36,500 (one way). This will include traveling from Point of Origin to Assignment Location, and to Employee home of record in the United States (or an alternate mutually agreed location) upon completion of Employee assignment.

In considering DSSR 031.12(b) and the meaning of the phrase "under conditions which provided for his/her return transportation to the United States," it is instructive to consider the underlying intent of LQA.  LQA is granted to employees recruited directly from the U.S. and secondarily, to employees recruited outside the U.S. under very specific and limited conditions.   As articulated in DoDI 1400.25, Volume 1250, it is DoD policy that: 

Overseas allowances and differentials (except the post allowance) are not automatic salary supplement; nor are they entitlements.  They are specifically intended to be 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 in the foreign area, that inducement is normally unnecessary. 

Thus, LQA is designed as an overseas recruitment incentive for individuals residing in the U.S., and for individuals currently employed overseas (for certain specified entities) but with the specific provision that at the conclusion of that employment, the individual is to be returned to the U.S. (or other enumerated locations stipulated in DSSR 031.12b) by the employing entity.  This allows the granting of LQA only to individuals who have primary residency in the U.S. and are expected to resume that residency at the conclusion of the overseas employment.  In other words, subsequent return to the U.S is a specific "condition" of the employment, not merely an "option."  The employee may, at his or her own initiative, incur the cost of relocating elsewhere, but this cost will not be borne by the employer.  Although an individual working overseas may intend to return to the U.S. with or without any commitment by the employer to provide for return transportation, "intent" cannot serve as the basis for the granting of LQA.  Instead, the individual's employment contract or benefits must serve as the basis for making a reasonable determination as to whether his or her return transportation to the U.S. is understood and ensured.  This is in keeping with the design of LQA as a means of inducing individuals who would otherwise be returning to the U.S. to accept Federal employment overseas, and to disqualify those who have undertaken long-term residency overseas with no specific commitment or expectation on the part of their employer to return them to the U.S.  These conditions are not met by an employment contract that provides "traveling…to Employee home of record in the United States (or an alternate mutually agreed location) upon completion of Employee assignment” emphasis added.  This is not a specific commitment and expectation on the part of the employer to return the employee to the U.S. upon termination of that employment.  Return to the U.S. under these circumstances is merely speculative.  The criteria expressed under DSSR section 031.12b are narrow and go to the very heart of the intent of LQA as a recruitment incentive.  See OPM File Numbers 08-0009 and 08-0027, September 18, 2008; 09-0021, May 18, 2009; 09-0048, March 18, 2010; and 12-0006, September 27, 2012.

In the claimant’s request, he seems to assert that he accepted his current position without LQA compensation was based, in part, on assurances and/or misinformation provided to him by USAMMCE employees. He states:

Upon being offered my current position as a GS Federal employee here at USAMMC-E it was explained to me that I should not have a problem receiving LQA being that I was hired for my GOV Contr position while stateside and had not accepted any other jobs since taking it on. I was skeptical on taking the position because I was seemingly been looked as if I was a local hire but I was again assured that once onboard I could appeal and provide the proof necessary and be granted LQA.

Nevertheless, the claimant accepted the agency’s job offer and entered on duty in his current position on August 30, 2020.

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.

As mentioned, DoDI 1400.25, Volume 1250, 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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