Washington, DC

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

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Ana A. Mazzi
Principal Deputy Associate Director
Agency Compliance and Evaluation
Merit System Accountability and Compliance


10/09/2024

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Date

The claimant is a Federal civilian employee of the Logistics Operations Division, Unit 15237, Associate Chief of Staff, J4, Headquarters, United States Forces Korea (HQ USFK); U.S. Department of the Army (DA) in Pyong Taek, South Korea. He requests the U.S. Office of Personnel Management (OPM) reconsider DA’s denial of living quarters allowance (LQA) for his current position. We received his claim on June 26, 2022, and the agency administrative report (AAR) on June 26, 2023. For the reasons discussed herein, the claim is denied.

Prior to January 2019, the claimant served as an active-duty member of the United States Marine Corps (USMC) stationed at Camp Humphreys, South Korea. On December 4, 2018, while living in South Korea and working for the USMC, the claimant was recruited for and accepted employment with the U.S. contractor, Group W Inc. in South Korea. The claimant separated from the USMC on January 31, 2019, and elected not to utilize his return transportation to the United States and, instead, transitioned immediately into his new position with Group W Inc. Sometime in late 2021, while employed with Group W Inc. and living in South Korea, the claimant was recruited by DA for his current position. On January 3, 2022, the claimant completed his service with Group W Inc. and entered on duty with DA. Although Group W Inc. provided return travel (i.e., home leave expense) to the United States for him and his dependents, the claimant elected to remain in South Korea and transition into his new position with DA in South Korea.

The Department of State Standardized Regulations (DSSR) contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas.

Section 031.12 of the DSSR provides the following guidance relative to employees recruited outside the United States:

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; or

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 the agency.

The agency contends the claimant does not meet DSSR 031.12 because: 1) prior to his appointment with DA the claimant was not recruited in the United States by Group W Inc. and 2) the claimant had more than one employer overseas prior to his current appointment with DA (i.e., USMC and Group W Inc.). In its AAR to OPM, DA states, in relevant part:

One of the criteria for LQA eligibility under DSSR section 031.12 is that the employee must have previously been recruited from within the United States by a specific type of employer and have remained in “substantially continuous employment by such employer” under conditions providing for the employee’s return transportation to the United States.

…Immediately prior to his federal appointment, the employee’s overseas employer, Group W Inc., did not recruit him from the United States. He was employed with the [USMC] and Group W Inc. in Korea before his federal employment.

…[OPM] compensation decisions clarify that “substantially continuous employment” under DSSR section 031.12b must be with a singular employer.

[The Claimant] lists employment with the USMC until January 31, 2019, and he was employed with Group W Inc. at Camp Humphreys, Pyongtaek, [South] Korea from February 1, 2019, to present when he accepted the offer of federal appointment [with DA]. Additionally, [the claimant] certifies that his actual residence was [South] Korea after his military retirement – he did not move back to the United States before taking the Group W Inc. employment on February 1, 2019.

The claimant asserts that his overseas position with the USMC should not count as employment for the purpose of determining LQA eligibility under DSSR 031.12b. In his OPM claim he states in relevant part:

…My first argument is that my service as a Marine should not be counted as employment…

However, contrary to the claimant’s assertion, DSSR 031.12b(1), specifically includes “the United States Government, including its Armed Forces” as a qualifying overseas employer. As stated earlier, the DSSR contains the governing regulations for LQA. Therefore, the claimant’s assertion that the USMC should not be considered an employer under DSSR 031.12 is without merit. His employment with the USMC in South Korea must be considered.

The claimant asserts he meets the LQA provisions for DSSR 031.12a and b. In his claim he states in relevant part:

…my second argument is that I do meet the [requirements] of criteria DSSR, section 031.12a and b…;

…employment is fairly attributable to the United States Government: military orders, uninterrupted US government SOFA [s]tatus, contract work in direct support of the US military…; and

…I maintain my return transportation through the Marine Corps and Group W (previous employer) provided return transportation during my employment…

The claimant requests that he be granted LQA effective from the time he entered on duty with DA on January 3, 2022.

The agency cites North Atlantic Treaty Organization (NATO) Status of Forces Agreement (SOFA) and Army in Korea Regulation (AKR) 690-10 LQA guidelines in his submission to OPM. However, relevant LQA provisions of the DSSR must be fully met before NATO SOFA and AKR LQA guidelines can be applied. In this case, the claimant did not meet DSSR’s basic requirements for LQA. Therefore, the NATO SOFA and AKR LQA guidelines cited by the claimant are neither relevant nor applicable in determining the claimant’s eligibility to receive LQA and will not be addressed in this decision.

The claimant meets DSSR 031.12a, in that his presence in South Korea is fairly attributable to his current employment with DA.

The claimant does not meet DSSR 031.12b. Prior to his Federal civilian appointment with DA, he was employed by Group W Inc, a qualifying employer under section 031.12b(2), who recruited the claimant in South Korea while he was living in South Korea and employed by his initial overseas employer the USMC. Consequently, the claimant’s subsequent overseas employment with Group W Inc. broke the continuity of employment by a single employer (i.e., “such employer that recruited him in the United States”). In addition, because he was not recruited in the United States prior to appointment by his previous employer (Group W Inc), he does not meet the basic LQA eligibility requirements under DSSR 031.12b for locally hired employees. Therefore, the claimant does not meet DSSR 031.12b, and his claim is denied.

The claimant asserts he meets DSSR 031.12c. However, it is unclear, based on arguments provided by the claimant, how his overseas employment meets DSSR 031.12c. In his request he states, in relevant part:

…DSSR, section 031.12c-not necessary (as the requirements for a&b have been met) it is the perfect vehicle for active-duty members separating and going into government service, due to cool [off] period for federal employment. DSSR, section 031.12c-government cooling off period and active-duty service certainly justify “unusual circumstances” for authorizing LQA. And,

…my final argument that should the Office of Personnel Management disagree on the first and second argument, then DSSR, section 031.12c applies for active-duty members separating overseas and seeking U.S. Federal Government employment.

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’s current appointment with DA does not meet the intent of DSSR 031.12c, because it constitutes a “new hire” position with the agency and was not required to nor authorized by the head of DA to move for his current appointment. Therefore, the claim is denied.

The statutory and regulatory language 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. 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). As discussed in this decision, the claimant has failed to do so. 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, 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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