Washington, DC

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

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Robert D. Hendler
Classification and Pay Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance


05/17/2016

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Date

The claimant is a Federal civilian employee of the U.S. Army Sustainment Command, Department of the Army (DA), in Waegwan, Republic of Korea (Korea).  He requests the U.S. Office of Personnel Management (OPM) reconsider the agency’s denial of his request for living quarters allowance (LQA) and “transportation rights” to the United States.  We received the request from the claimant on February 19, 2015, and the agency’s administrative report (AAR) on July 9, 2015.  For the reasons discussed herein, the claim is denied.

The record shows the claimant began employment with Lear Siegler Services, Inc., a division of the United Research Services (URS), at Camp Carroll, South Korea, in July 2006.  During his tenure in the position, the URS discontinued the Lear Siegler Services, Inc., name of the division.  While employed with the U.S. firm, the claimant applied for, was selected, and subsequently appointed to his Federal service position effective January 26, 2015.

The Department of State Standardized Regulations (DSSR) contain the governing regulations for allowances, differentials, and defraying of official 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.  Thus, Department of Defense Instruction (DoDI) 1400.25-V1250 implements the provisions of the DSSR but may not exceed their scope; i.e., extend benefits that are not otherwise permitted under the DSSR.  Therefore, an LQA applicant must fully meet the relevant provisions of the DSSR before the supplemental requirements of the DoDI, Army in Korea (AK) Regulation 690-10, or other agency implementing guidance may be applied.

The agency determined the claimant ineligible for LQA at the time of appointment, stating in its December 2, 2014, denial letter that he, as an “invited contractor [outside the continental United States] with a single employer [outside the continental United States] since July 2006,” fails to meet eligibility requirements stipulated by the DSSR in addition to the DoDI 1400.25.  The agency explains in its AAR to OPM:

This ineligibility is based upon the fact that the employee was living in Korea in more than a temporary duty (TDY) nature when he applied for federal appointment, thus he was a local hire.  Since local hires are eligible for LQA only if certain conditions are met, such as housing allowances and return transportation rights, and since he does not have a proper housing allowance nor return transportation in his initial contract, he fails to meet the requirements to be granted LQA.

The claimant asserts his eligibility for LQA as a “U.S. hire,” explaining his rationale in his claim request to OPM:

…I was told, by phone, that I would be hired as a local hire because I applied for the position and accepted the tentative offer while I was still in Korea.  I did not agree with it and informed [the servicing human resources office] that I was going to appeal.  Before I was given the firm offer on Jan 22, 2015, I was already unemployed in the United States.

LQA may be granted to employees recruited in the United States, as stated in DSSR section 031.11:

Quarters allowance 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.

An employee’s status as a “U.S. hire” is thus based on physical residency at the time of recruitment for the position in question.  In this case, the record shows the claimant was employed by URS at Camp Carroll, South Korea, from July 2006 to December 2014.  The agency-completed portion of the Questionnaire for Overseas Benefits Determination, signed by the claimant on November 14, 2014, shows he applied for his current Federal service position on August 24, 2014, and the agency extended a job offer to him on November 13, 2014.  He accepted the position on the following day.  The claimant suggests he was “unemployed” and in the United States when the agency extended the firm job offer on January 22, 2015, which we noted is four days prior to the effective date of his Federal service appointment.  The record includes a flight itinerary showing he returned to the United States following his URS employment on December 26, 2014.  The record thus shows the claimant was employed and resided in Korea for portions of the recruitment process and was not permanently or physically residing in the United States from the time he applied for employment until and including the date he accepted the formal job offer.  Therefore, he may not be considered a U.S. hire for LQA purposes under DSSR section 031.11 and implementing regulations of the DoDI.

The claimant attempts to characterize his URS employment as “TDY,” thus meeting LQA eligibility requirements by reference to the September 19, 2013, policy advisory issued by the U.S. Department of Defense regarding the U.S. hire definition.  He supports his characterization with a November 14, 2014, letter from a URS site manager stating the claimant had been in a “permanent TDY status since his arrival to Korea.”  The policy advisory states, in part, that “[t]emporary absences from the U.S. for reasons such as vacations, temporary duty assignments…do not alter a person’s “U.S. hire” status.”  Although rescinded in May 2015, the policy advisory was in force at the time of the claimant’s LQA eligibility determination.  The agency, for purposes of explaining the inapplicability of the advisory to the claimant’s situation, cites the Joint Travel Regulations’ definition of TDY as “[d]uty at one or more locations, away from the Permanent Duty Station (PDS), under an order providing for further assignment or, pending further assignment, to return to the old PDS or to proceed to a new PDS.”  Regardless, the plain meaning of a temporary duty assignment is a travel assignment to a location other than the employee’s permanent duty station.  In such situation, there is an identifiable permanent duty station and a temporary duty station to which the employee is assigned on a time-limited basis.  In contrast, URS hired the claimant to work exclusively in South Korea, thus the characterization of that locale as a temporary duty station would be inappropriate.  Furthermore, the duration of his estimated nine-year assignment to Korea for the URS would not be indicative of an absence from the United States of a temporary or short-term nature.  We conclude the policy advisory is inapplicable to his situation as his absence from the United States is inconsistent with that of a vacation, temporary duty assignment, or other temporary absence described by the September 2013 policy advisory.

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.]

DSSR section 031.12b specifies the conditions under which employees “recruited outside the United States” may be granted LQA.  In the claimant’s case, the recruitment process began while he was in Korea and applied for the position but continued and concluded after he had returned to the United States, where he received the firm job offer.[1]  Thus, upon his return to the United States, he could no longer be considered to have been recruited outside the United States for purposes of section 031.12b and the employment conditions it describes, which are based on the premise that, prior to appointment, the employee is physically located overseas by one of the qualifying entities with return transportation benefits to the United States.  Although the claimant began the recruitment process as an employee “recruited outside the United States,” he concluded the process as an employee “recruited in the United States,” albeit not fully meeting the requirements, as previously discussed, of DSSR section 031.11 as implemented by DoDI 1400.25.  See OPM File Number 14-0026, October 19, 2015.

For our purpose of fully addressing the claimant’s concerns, we nonetheless evaluated his situation by application of the requirements stipulated by DSSR section 031.12.  The claimant meets section 031.12a because his presence in Korea is attributable to his employment with DA.  Section 031.12b 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 which entity (i.e., the singular usage of “such employer”) recruited the employee in and provided return transportation to the United States or its territories or possessions.  Further, the plain language of DSSR section 031.12b of “recruited in the United States” clearly connotes physical presence at the time of recruitment.

Neither the claimant nor agency disagree that URS (his employer prior to his Federal service appointment) recruited the claimant from the United States as required by DSSR section 031.12b.  However, the claimant has not established he was in substantially continuous employment “under conditions which provided for [his] return transportation to the United States” or its territories or possessions with URS.  Other than the twelve-month employment agreements with URS dated July 10, 2006, and October 22, 2009, the claimant has not provided the remaining employment agreements.  We are therefore unable to determine whether his benefits changed or remained the same as related to his being substantially continuously employed by URS under conditions providing for return transportation to the United States.[2]  We note the November 2014 letter from the URS site manager states the claimant has “return rights back to the United States upon completion of his employment obligation.”  However, letters from URS representatives, who may or may not be authorized to speak for the firm regarding its employment benefit obligations and purporting benefits for past employment, do not establish that the firm had committed itself at the time of hire and throughout his employment to provide return transportation to the United States and are not acceptable for purposes of LQA determination.  Since the claimant has not established that he was recruited in the United States prior to appointment by his previous employer (URS), under conditions that provided for his return transportation to the United States, he does not meet basic LQA eligibility requirements under the DSSR for locally hired employees.[3]

The DSSR are the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas.  However, under section 013, they allow agencies to issue implementing regulations as follows:

When authorized by law, the head of an agency may defray official residence expenses for, and grant post differential, difficult to staff incentive differential, danger pay allowances, quarters, cost-of-living, representation allowances, compensatory time off at certain posts and advances of pay to an employee of his/her agency and require an accounting thereof, subject to the provisions of these regulations and the availability of funds.  Within the scope of these regulations, the head of an agency may issue such further implementing regulations as he/she may deem necessary for the guidance of his/her agency with regard to the granting and accounting for these payments.

The agency also refers to the AK Regulation for denying LQA to the claimant, specifically provisions of Chapter 2-2(b) stating that LQA for locally hired employees “may” be granted under the following conditions:

(1)   The position is announced worldwide, and;

(2)   The employee meets basic eligibility requirements to receive LQA as defined by the DSSR, section 031.12a and b, and;

(3)   The employee did not previously accept a position for which LQA was not offered.

The agency asserts that, in addition to not meeting the basic eligibility requirements defined by DSSR section 031.12b, the claimant’s URS position did not provide him with LQA and he thus fails to meet condition (3).  The claimant, however, states in his claim request to OPM that he was provided $166 per diem, which he describes as a “combination of housing with meals and incidentals.”  We noted his initial 2006 employment agreement, regarding local housing and transportation benefits, states that “[h]ousing is the employee’s responsibility” and “continues” to be his responsibility as stated in the 2009 agreement.

The agency determined the claimant’s employment with URS fails to demonstrate the contractor’s obligation to provide him with LQA or suitable, adequate living quarters at the work location as required by condition (3), stating in its AAR to OPM:

Because there is no standard contract language for privately owned contractors, there are various terms for per diems, cost of living, and allowances offred [sic] to the invited contractors overseas.  Because of this, the region constantly applies that to meet this qualification, the employment contract has to specifically state that the allowance/per diem/[cost of living allowance] is for housing.  In other words, it is a housing allowance, housing [cost of living allowance], etc.  In this case, [the claimant’s] employment contract only lists an overseas allowance under the compensation section (Paragraph 2) and lists that housing is the employee’s responsibility under the local housing and transportation section (Paragraph 7).

When the agency’s factual determination is reasonable, we will not substitute our judgment for that of the agency.  See e.g., Jimmie D. Brewer, B-205452, March 15, 1982.  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.

Even if the claimant had met all the conditions for locally hired employees, the plain text of the AK Regulation, by indicating that such employees “may” be granted LQA, does not compel payment of such.  This is consistent with DSSR section 031.12, which applies to employees recruited outside the United States, and provides that “[q]uarters allowances…may be granted to employees recruited outside the United States…” (emphasis added).  The DSSR does not state that an agency shall or must grant LQA once an employee meets the prescribed eligibility requirements.  The DSSR establishes only basic LQA eligibility parameters and bestows considerable discretion on agency heads to decide under what circumstances they will actually grant LQA to eligible individuals.  See Mark Roberts v. United States, 104 Fed. Cl. 598 (2012).

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 United States to accept Federal employment in a foreign area.  If a person is already living in a foreign area, that inducement is normally unnecessary.  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 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 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 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.

The claimant also requests reconsideration of the agency’s denial of a transportation agreement.  Agency decisions regarding transportation agreement negotiations are at the discretion of the agency and are not subject to review under section 3702(a)(2) of title 31, United States Code (U.S.C.).[4]

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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