Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Joint Activities
Stuttgart, Germany
Ana A. Mazzi
Principal Deputy Associate Director
Agency Compliance and Evaluation
Merit System Accountability and Compliance
11/27/2024
Date
The claimant is a Federal civilian employee of the U.S. Africa Command, Joint Activities, in Stuttgart, Germany. He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s denial of a living quarters allowance (LQA). We received the claim on November 7, 2022, additional information from the claimant in April 2023, and the agency administrative report (AAR) and the claimant’s comments to the AAR on August 22, 2023. For the reasons discussed herein, the claim is denied.
The claimant retired from the U.S. Navy on January 1, 2022, in Stuttgart, Germany. While residing in Germany prior to retirement, he was interviewed and began contractor employment on January 17, 2022, with the private U.S. firm ADS, Inc. working remotely from home. On May 15, 2022, the claimant applied for his initial Federal civilian position in Stuttgart, Germany. On July 7, 2022, he resigned from his contractor employment with ADS, Inc. On August 16, 2022, the claimant received and accepted a tentative job offer, and he subsequently completed an LQA questionnaire. On August 26, 2022, the Civilian Human Resources Agency, Europe’s (CHRA-E) LQA Team determined him ineligible for LQA. In October 2022, a firm job offer was extended and accepted by him without LQA. On November 7, 2022, the claimant was appointed into the Federal civilian service in Stuttgart, Germany.
The claimant was initially found ineligible for LQA for not meeting eligibility criteria in the Department of State Standardized Regulations (DSSR) section 031.11 in conjunction with Department of Defense Instruction (DoDI) 1400.25, Volume 1250. However, after the claimant began his initial Federal civilian employment, he requested a reconsideration of the CHRA-E LQA Team decision to deny him LQA from the U.S. Army Europe and Africa (USAREUR-AF), Civilian Personnel Directorate. After another review of his situation and based on information provided in a second LQA questionnaire, the claimant was found LQA ineligible based on not meeting the criteria in DSSR section 031.12a and b in a memorandum dated April 15, 2023. In July 2023, the claimant was reassigned to his current Federal civilian position in Stuttgart, Germany.
The claimant asserts the CHRA-E LQA Team and USAREUR-AF, Civilian Personnel Directorate incorrectly denied him LQA, and states their reasoning was inconsistent. The claimant states he did not understand “how to navigate and provide accurate information [in the LQA Questionnaire] based on [his] living and work conditions at the time” and submitted a second updated LQA Questionnaire. He further states ADS, Inc. would provide him “with both relocation and housing expenses if desired (return transportation to the United States).” The claimant believes he meets the LQA eligibility criteria in DSSR section 0131.12a and b as a military retiree overseas.
In its AAR to OPM, the agency explained its decision and states, in part:
In CHRA-E’s view, based on the information available to them in August [2022], he applied for the position whilst in the United States and accepted the formal job offer in August 2022, whilst he was in Germany. As such, he did not meet the provisions of the DSSR § 031.11 in conjunction with the DODI 1400.25-V1250. There was no reason for CHRA-E to conduct further analysis of [claimant’s] application for LQA at that time, given the information they had.
[The claimant’s] request for reconsideration provided, at least in part, information that was significantly different from what he provided in the LQA questionnaire that he completed on August 18, 2022…With the new information, he suggested that he never left Germany on a permanent basis but worked under a remote work agreement with a private stateside employer.
…[H]e did not meet DSSR § 031.12b., since his previous employer, a contractor firm, recruited/hired him in Germany, and not in the United States. This constitutes an intervening employment between his retirement from the military service and his Federal civilian employment, which disqualifies an applicant for LQA under aforementioned section of the DSSR, principally for the reason that the contractor hired and employed [claimant] in Germany and not in the United States. The one-year grace period provided by the DODI 1400.25-V1250 for former military members who separate in the overseas area and considered as being “substantially employed” by the military provided the transportation entitlement is not used, which was the case in his case, did not apply to him.
The DSSR contains the governing regulations for allowances, differentials, and defraying of residence expenses in foreign areas. Within the scope of these regulations, the head of an agency may issue further implementing instructions for the guidance of the agency with regard to the granting of and accounting for these payments. DoDI 1400.25, Volume 1250 implement the provisions of the DSSR for DoD employees. Because LQA is a discretionary allowance, agency implementing regulations may be more restrictive, but not more permissive, than the DSSR; i.e., they may impose additional limitations on the granting of LQA but may not extend benefits that are not otherwise permitted by the DSSR. Therefore, an LQA applicant must fully meet relevant provisions of the DSSR before the supplemental requirements of the DoDI or other agency implementing guidance may be applied.
LQA may be granted to employees recruited in the United States, 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, Volume 1250 defines “U.S. Hire” as follows:
A person who resided permanently in the United States or 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.
DSSR 031.11 is not in dispute by the claimant. Since he acknowledges he was physically residing in Germany when he applied for his initial position, and additionally has not established that he was residing in the United States, a Commonwealth, or a possession until and including the date he accepted the firm job offer, he is ineligible for LQA under DSSR section 031.11 in accordance with the DoD implementing regulations as they pertain to U.S. hires.
DSSR section 031.12 states, in relevant part, that LQA 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. [Italics added.]
The claimant’s place of residence in the place to which the quarters allowance would apply (Germany) is attributable to his employment by the United States Government, and meets DSSR section 031.12a. However, prior to appointment, he was employed by ADS, Inc., a qualifying employer under section 031.12b(2), which is not in dispute. However, ADS, Inc. recruited him in Germany rather than in the United States or one of the enumerated territories or possessions.
The singular usage of “such employer” in section 031.12b requires that the employee have had only one such qualifying employer prior to appointment and, consequently, the employer immediately preceding appointment be the same employer that recruited the employee in the United States or one of the other qualifying locations. Further, section 031.12 also requires that the employee have been substantially continuously employed by such employer under conditions providing for return transportation to the United States.
The agency included in the AAR a copy of the claimant’s employment contract and relocation agreement. The claimant contends the relocation agreement shows that ADS, Inc., at the time of hire, would provide him return transportation to the United States. Under the relocation expenses section, the company agreed “to ship up to 500 lbs of personal effects to the assigned location” and “ship the same amounts back to [his] home country.” However, the relocation agreement is silent on providing the claimant transportation benefits to the United States; thus, not obligating itself to repatriate him to the United States upon the termination of his employment. He was recruited in the United States by the U.S. Navy, as evidenced by his DD Form 214, Certificate of Release or Discharge from Active Duty, showing his place of entry into active duty as Des Plaines, Illinois. His subsequent employment by ADS, Inc., broke the continuity of employment by a single employer overseas (i.e., “such” employer that recruited him in the United States). Therefore, the claimant does not meet DSSR section 031.12b because he was neither recruited in the United States or other qualifying location nor provided return transportation to the United States by ADS, Inc.
The claimant asserts eligibility under the DoDI 1400.25, Volume 1250, under which “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.” He states in his claim: “My Transportation Agreement is still valid as I DEFERRED it for one year. I never transferred or worked in or moved to the United States.” However, agency implementing regulations such as DoDI 1400.25, Volume 1250, supplement but do not supplant the requirements of the DSSR. Therefore, the requirements of DSSR section 031.12b must still be met before the DoDI “substantially continuous employment” provision may be applied (hence its prefacing as “under the provisions of Section 031.12b”). Within this context, the DoDI 1400.25 essentially allows former military and civilian employees a period of up to one year of unemployment after separation (or loss of transportation entitlement) to be considered “substantially continuously employed” by the military or civilian employer, but that military or civilian employer is presumed to have recruited the employee in the United States consistent with DSSR section 031.12b. In the claimant’s case, his intervening employment by ADS, Inc., renders the DoDI “substantially continuous employment” provision inapplicable to his circumstances. Further, since the return transportation must be provided by the employer prior to appointment (in this case, ADS, Inc.), any retention of transportation benefits from his military service is irrelevant for purposes of establishing eligibility under DSSR section 031.12b. Accordingly, the claim for LQA is denied.
The claimant contends his initial Federal position was an essential hard-to-fill overseas assignment, which required a Top Secret/Sensitive Compartmented Information clearance. He further states that he would have received LQA if he occupied a similar position in the United States. However, the claimant provides no direct evidence that the agency determined his initial position was essential or hard-to-fill. Furthermore, the DoDI 1400.25-V1250 specifies that overseas allowances are not automatic salary supplements, nor are they entitlements. They are specifically intended as recruitment incentives for U.S. citizen civilian employees living in the U.S. to accept Federal employment in a foreign area. If a person is already living in a foreign area, that inducement is normally unnecessary. 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 5 Code of Federal Regulations 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.
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.