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

12/17/2024

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Date

The claimant is a Federal civilian employee of the Logistics Division, BG C.F. Sams U.S. Army Health Clinic, U.S. Army Medical Department Activity  Japan, U.S. Army Medical Command, Camp Zama, U.S. Department of the Army (Army), in Zama, Japan. He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s denial of living quarters allowance (LQA) for his current position. We received his claim on May 4, 2023, and the agency administrative report (AAR) on September 12, 2023. For the reasons discussed herein, the claim is denied.

The record (i.e., claimant’s request and AARs) shows the claimant was a continuous resident of Japan from at least October 29, 2007, through the period of recruitment for his current position as a Facility Operations Specialist, GS-1640-12, with Army on August 29, 2022.

Prior to his recruitment by the agency to his current position, the claimant had been employed in Japan by four different U.S. Federal contractors, i.e., University of Maryland University College (UMUC) Asia (October 10, 2007 – September 9, 2015); Tidewater, Inc. (Tidewater) (September 16, 5016 – September 15, 2016); J&J Worldwide Services (September 16, 2016 – February 14, 2021) and Johnson Controls (February 15, 2021 – August 23, 2022). The record provides no evidence that the claimant returned to the United States during transitions between each of the aforementioned employments, nor does the record provide evidence that employment contracts with these employers included return transportation benefits to the United States for the claimant.

The claimant entered on duty in his current position on August 23, 2022, and received a Notification of Personnel Action Standard Form 50 (SF50) on that date determining him to be eligible to receive LQA. However, in a subsequent SF50 dated August 29, 2022, the agency changed its determination, finding the claimant ineligible to receive LQA in his current position.

The agency states the claimant is not eligible to receive LQA as an overseas hire because he does not meet the “singular” employer requirement for LQA under section 031.12(b) of the Department of State Standardized Regulations (DSSR). In its AAR to OPM the agency states:

…the claim should be disallowed because the employee is not eligible for LQA under the applicable rules and regulations. Immediately prior to his federal appointment, the employee’s overseas employer, Johnson Controls, did not recruit him from the United States. He was employed with the University of Maryland University College (UMUC) Asia, Tidewater, Inc, and J&J Worldwide Services in Japan before his federal appointment.

In his appeal, [the claimant] disagrees with the assessment that he had more than one employer in the overseas area prior to his appointment in civil service. He lists employment with the UMUC until September 15, 2015, Tidewater, Inc., until September 15, 2016, J&J Worldwide Services until February 14, 2021, and he was employed with Johnson Controls at Camp Zama, Japan from February 15, 2021, to present when he accepted the offer of federal appointment. Additionally,[the claimant] certifies that his actual residence was Japan (1402-12 Minamiohya, Machida, Tokyo Japan 194-0031) resided 7 years and 8 months – he did not move back to the United States before taking the Tidewater, Inc., employment on September 16, 2015.

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. Army and other DoD activities had been interpreting the “substantially continuous employment” provision to have been met when an individual worked for more than one employer overseas, as long as that employment was continuous. However, U.S. Office of Personnel Management compensation decisions clarified that “substantially continuous employment” under DSSR section 031.12b must be with a singular employer.

The claimant notes differences between the SF50 issued to him by the agency on August 23, 2022, and a subsequent SF50 issued to him and infers that these differences may have confused the agency and resulted in their incorrectly determining him ineligible to receive LQA for his current position. In his claim he states:

…I am writing to [OPM] to state my appeal about being denied [LQA] after hire, despite it being part of my approved benefit package as written in my Final Job Offer (FJO) and on my first [SF50], with approval date 23 August 2022. After further research, I found there were two SF50’s generated. The first SF50 approved 23 August 2022 has all the information from the SF52 including LQA eligibility, while the second SF50 approved 29 August 2022 is missing that and other key information. I believe this has led to the confusion about eligibility at the Overseas Benefits Branch.

The claimant also cites numerous excerpts from a variety of official documents and guidelines (e.g., Electronic Official Personnel Folder e-OPF, SF50, DD1614 Request/Authorization for DoD Civilian Permanent Duty or Temporary Change of Station (TCS) Travel, DSSR 031 and Department of Defense Instruction(DoDI) 1400.25 v1250) and e-mails between himself and Civilian Human Resources Agency (CHRA) representatives as support for his assertion that the agency erred when it determined him ineligible to receive LQA for his current position.

However, the claimant does not deny his physical presence in Japan during the entire recruitment process for his current Federal position with Army or for his position with his previous overseas employer (i.e., Johnson Controls), nor does he deny that the employment agreements between himself and Johnson Controls lacked a provision for his return transportation to the United States.

The DSSR contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas.

LQA may be granted to employees recruited outside the United States or one of its enumerated territories or possessions, under conditions described in DSSR section 031.12:

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.

Section 031.12a of the DSSR, is met because the claimant’s presence in Japan is attributable to his employment with Army.

As it relates to DSSR 031.12(b), the record clearly shows that the claimant was living in Japan and working for J&J Worldwide Services from September 16, 2016, through February 14, 2021, and that he began work with Johnson Controls on February 15, 2021. Therefore, the claimant was physically residing in Japan during the entire recruitment process for his previous position with Johnson Controls. In addition, the employment contracts between the claimant and Johnson Controls do not include a return transportation the United States for the claimant. Consequently, neither the circumstances surrounding the claimant’s Federal civilian recruitment by the agency while living and working in Japan, nor the conditions of his employment contract with Johnson Controls (i.e., lack of return transportation to the U.S.), meet the requirements for overseas hires under DSSR 031.12(b). Therefore, the claimant is not eligible to receive LQA under DSSR 031.12 as an overseas hire.

The claimant’s request also seems to infer that the financial and emotional difficulties experienced by him and his family associated with his current employment with Army and/or his residence in Japan meets the intent of “unusual circumstances” described in DSSR 031.12, and that his circumstances justify waiving the normal requirements for recruitment outside the continental United States. In his request he states:

April 26, 2023 – Department of State Standardized Regulation (DSSR) 030, states eligibility requirements however: “Subsection 031.12b may be waived by the head of agency upon determination that unusual circumstances in an individual case justify such action.”

As a DoD Invited Contractor to Camp Zama, Japan, I was making $102,000 and qualified for the IRS Foreign Earned Income Exclusion. Now even as a GS-12 step 5 with post allowance, I am making 30% less after tax. It is a financial hardship for my family as we are unable to afford our living expenses off base. I would not have taken the job if I knew LQA would not be honored as stated on my FJO. There were more than 30 days between when I accepted the TJO on 16 July 2022 and when I received the FJO on 19 August 2022, more than enough time for CHRA to research and issue a new FJO without LQA. That would have given me time to decide whether to stay in my current job or accept the US Government job without LQA. My final decision to take the job was based on the official offer, which is the promise of benefits that I accepted. All official documents I received before hire show LQA as a benefit included in employment with the US Government. The job terms I accepted included LQA, which was the primary reason I left my six-figure job. It is not acceptable that nearly 2 months after being hired CHRA can then deny my promised LQA. I am under significant financial and emotional hardship, with my family suffering through all of this. We request a swift resolution based on the evidence provided.

However, OPM’s authority under section 3702(a)(2) of title 31, United States Code (U.S.C.) to adjudicate compensation claims for certain Federal employees is narrow and limited to determining if monies are owed the claimant under the controlling statutes or regulations. Moreover, authority to waive the requirements of section 031.12b of the DSSR rests with the employing agency. Consequently, OPM lacks the authority to consider the claimant’s request for a waiver of the aforementioned overseas eligibility requirements within the context of its claims adjudication function performed under 31 U.S.C. 3702(a)(2), and the request for a waiver is denied.

DoDI 1400.25, Volume 1250, specifies that overseas allowances are not automatic salary supplements, nor are they entitlements. 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. In this case, the agency’s decision to deny LQA to the claimant was made in accordance with the DSSR. 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 agency’s decision. 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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