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


05/16/2024

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Date

The claimant is a former Federal civilian employee of the Individual Mobilization Augmentee, Command Element, Motor Transportation Branch G-4 Division (MCIPAC-MCBB G-4 Division), III Marine Expeditionary Force (III MEF), Camp Foster, U.S. Marine Corps (USMC), Okinawa, 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 November 30, 2022, and the agency administrative report (AAR) on January 20, 2023. For the reasons discussed herein, the claim is denied.

The claimant is a member of the USMC Reserves. On or about March 6, 2021, while in an inactive reserve status, the claimant traveled to Tbilisi, Republic of Georgia (Tbilisi), for personal reasons.

On May 2, 2021, while physically residing in Tbilisi, he received Active-Duty Operational Support Active Component (ADOS AC) orders from USMC III MEF, requiring him to report to Camp Courtney, Okinawa, Japan no later than May 16, 2021, for a duty period of up to 110 days. On the ADOS AC orders, the claimant’s primary residence was identified as Tbilisi and provided that upon completion of duty, he would be returned to Tbilisi. On August 24, 2021, III MEF issued Individual Mobilization Augmentee (IMA) orders to the claimant to report to Okinawa, Japan for training. The IMA orders also identified the claimant’s primary residence as Tbilisi and provided return transportation to Tbilisi.

On September 8, 2021, Marine Corps Installation Pacific (MCIPAC), Marine Corps Base Camp Butler (MCBB), Okinawa, Japan announced a vacancy for a Supervisory Transportation Operations Specialist GS-2150-13, position, which the claimant applied for. On September 30, 2021, the claimant entered into a second tour and received permanent change of station (PCS) orders from III MEF. The orders identified the claimant’s primary residence as Tbilisi and provided for return transportation to Tbilisi. On January 22, 2022, the claimant received a tentative job offer for the Supervisory Transportation Operations Specialist position. Thereafter, he completed the MCIPAC living quarters allowance LQA questionnaire and identified Indianapolis, Indiana (IN) as his “USMC home of record.” On January 24, 2022, and February 8, 2022, in e-mail conversations between the claimant and the agency’s Civilian Human Resources Office (CHRO), the claimant stated in writing that his primary residence was Tbilisi.

On March 29, 2022, CHRO determined that the claimant was ineligible to receive LQA.

On April 27, 2022, III MEF issued official PCS orders requiring the claimant to report to III MEF, CE-III MEF, Unit 35601, Okinawa, Japan, which officially modified the claimant’s primary residence from Tbilisi, Republic of Georgia, to New Orleans, Louisana.

On July 15, 2022, CHRO issued a second LQA ineligibility determination in connection with the claimant’s Supervisory Transportation Operations Specialist position.

On September 26, 2022, the claimant entered on duty as Supervisory Transportation Operations Specialist with MCIPAC-MCBB, Okinawa, Japan without LQA.

On November 4, 2022, CHRO issued their third and final LQA ineligibility determination in connection with the claimant’s position, stating the claimant did not meet basic requirements for LQA under the Department of State Standardized Regulations (DSSR), and the Department of Defense Instruction (DoDI), and emphasized the agency’s discretionary authority with regard to granting LQA.

The claimant believes he meets sections 031.11 and 031.12 of the DSSR and should be granted LQA. In his claim he states:

…CHRO made determination that [the claimant] was residing in another country. This determination is inaccurate as [the claimant] was recruited from the United States and awaiting to executing orders to support MCIPAC. [the claimant’s] residence is Florida with a Home of Record in Indianapolis and a House in New Orleans, Louisiana.

The claimant met section 031.12b because prior to appointment, he was presumably recruited in the United States by the U.S. military under conditions which provided for his return transportation to the United States. Department of Defense Instruction (“DoDI”) 1400.25-V1250, provides Department of Defense’s (“DoD”) definition of "substantially continuous employment" as that term is used in DSSR section 031.12b.

Under the provisions of section 031.12b, former military and civilian members shall be considered to have "substantially continuous employment" for up to 1 year from the date of separation or when transportation entitlement is lost, or until the retired and/or separated member or employee uses any portion of the entitlement for Government transportation back to the United States, whichever occurs first.

The claimant was appointed to his current position within one year of his military retirement and his military return transportation entitlement was still fully intact. As such, he is considered to have had “substantially continuous employment” as prescribed by DoDI 1400.25-V1250 within the context of DSSR 031.12(b). [the claimant’s] transportation entitlements are fully intact most likely satisfying the element of maintaining “substantially continuous employment”.

According to DSSR section 031.12(c), the third element to satisfy the LQA eligibility is the agency required to relocate to new station. The third element is mostly suited for current employees transferring to another station vice a new hire. Enclosure 2 section (2)(c)(2)(g) of the DoDI provides that LQA may be given to an employee recruited outside the United States if, 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. The section further defines a condition of employment, if not fulfilled, results in failure to gain or retain employment. [the claimant] was ordered to Okinawa by the United States Marine Corps and upon completion with be authorized transportation back to his home of record.

A mobilized/deployed applicant is eligible for overseas allowance and benefits regardless of classification as a local hire. Subsequently, as a new hire [the claimant] determination of overseas allowances and benefits would be most likely determined by DSSR 031.12. [the claimant], as a new hire, satisfies the three elements for successful eligibility for such benefits as LQA. Furthermore, SNO satisfies the three prongs identified by the aforementioned DoDI test to for granting of overseas benefits. The DoDI and the DSSR provide specific instances of ineligibility for LQA and provide latitude for unusual circumstances by the agency. [the claimant] DOES NOT fall into any of the specifications that would render him ineligible for overseas allowances benefits. [the claimant] was not residing in another country, was recruited in the United States to fulfill a US military occupation and has had transportation back to the United States prior to his appointment. Additionally, it is well within the discretion of the agency, benefit to the agency, and within current policies to award [the claimant] as an applicant [for]overseas allowances for the GS position.

The claimant also expresses concern that the agency, by denying him LQA, may have violated Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) and the Uniformed Services Employment and Reemployment Rights Act (USERRA).

Under section 3702 of title 31, United States Code (U.S.C.), OPM adjudicates compensation and leave claims brought by employees who seek to challenge pay or leave decisions made by their employing agency. VEVRAA prohibits federal contractors and subcontractors from discriminating in employment against protected veterans and requires employers take affirmative action to recruit, hire, promote, and retain these individuals. USERRA protects military service members and veterans from employment discrimination on the basis of their service and allows them to regain their civilian jobs following a period of uniformed service. OPM’s authority under section 3702 of title 31 U.S.C. does not extend to settling claims brought under the VEVRAA or USERRA. Therefore, the claimant’s assertions regarding VEVRAA and USERRA violations are misplaced and will not be discussed in this decision.

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, 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:

1. 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
2. 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) 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.

c. 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 agency.

Subsection 031.12b may be waived by the head of agency upon determination that unusual circumstances in an individual case justify such action.

The claimant infers that he meets the requirements for U.S. hire under DSSR 031.11 and DoDI 1400.25, Volume 1250, because he maintains “a residence is Florida with a home-of-record in Indianapolis and a house in New Orleans, Louisiana” and submits records in support this argument. Regardless of the claimant’s submissions, 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 entire recruitment (i.e., application, selection, and acceptance of tentative and formal job offers) for the position in question. Thus, an employee must be physically residing in the United States during the recruitment process for the job in question. This language does not allow for a more expansive or relaxed interpretation of “residency” based on a Florida driver’s license; a dwelling in Louisiana; or a military home-of-record of Indianapolis. 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.

The record shows the claimant applied for his current position while living and working in Okinawa, Japan, and that he accepted both the tentative and final employment offers while physically residing in Japan. Since the claimant was not physically residing in the United States or one of its enumerated territories or possessions throughout the entire recruitment process, he does not meet the definition of U.S. Hire under DoDI 1400.25, Volume 1250, and is not eligible to receive LQA under DSSR 031.11.

The claimant meets the requirements of DSSR section 031.12a, in that his actual place of residence in Okinawa, Japan is fairly attributable to his employment by the USMC for the Supervisory Transportation Operations Specialist position.

DSSR section 031.12b requires that immediately prior to appointment, the employee must have been recruited in the United States by one of the enumerated entities and have been provided return transportation back to the United States. The claimant’s circumstances do not meet eligibility requirements under section 031.12b, as he was not re-activated into military duty in the United States, but rather while he was in Tbilisi. 

Application of section 031.12b to the conditions of prior civilian or military employment is clear, in that there must be continuity of employment (i.e., “substantially continuous employment”) by a single employer from the time of initial recruitment in the United States by that employer, including the Armed Forces, up to the point of Federal appointment. The record shows the claimant was in an inactive status and residing in Tbilisi on May 2, 2021, when he received orders to return to active-duty and report to Okinawa. Therefore, prior to his return to active-duty on May 2, 2021, the claimant had been physically present in Tbilisi from approximately March 6, 2021, through May 2, 2021. Furthermore, both the home of record and the return transportation address on his return to duty orders was listed as Tbilisi. His residence in Tbilisi was further documented as the claimant’s official home of record on the August 24, 2021 III MEF IMA orders and in written statements from the claimant in emails dated January 24 and February 28, 2022. Thus, prior to his appointment to the Supervisory Transportation Operations Specialist position with the USMC in Okinawa, the claimant had not been substantially continuous employment with one of the entities listed under (b) 1 through (b) 4, and “such employer” had not recruited him in and provided return transportation to the United States, or one of its enumerated territories or possessions. Therefore, the claimant is ineligible to receive LQA under DSSR 031.12b.

The claimant also believes he meets section 031.12c of the DSSR, which allows LQA eligibility in those instances where, “as a condition of employment by a government agency, the employee is required by the agency to move to another area, in cases specifically authorized by the head of agency.” However, section 031.12c applies exclusively to existing employees of Government agencies who are stationed overseas but have not otherwise qualified for LQA under section 031.12b, but who are subsequently required by their agencies to relocate from one overseas area to another in cases specifically authorized by the head of the agency (see OPM Decision No. 13-0040). Therefore, the claimant’s circumstances do not meet the specific requirements to be eligible for LQA under 031.12c, and the claimant is not eligible to receive LQA as an OCONUS hire under DSSR 031.12.

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 a discretionary allowance, such as LQA, unless the agency’s actions are determined to be arbitrary, capricious, or unreasonable. Under 5 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). In this case, the claimant did not establish the liability of the United States or provide evidence proving that the agency’s use of its discretionary authority to deny him LQA was unreasonable, arbitrary, or capricious, as required under under 5 CFR 178.105. Therefore, OPM will not disturb the agency’s decision and the claim is 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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