Washington, DC

U.S. Office of Personnel Management
Compensation and Leave 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


08/08/2016

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Date

The claimant is a Federal civilian employee of the U.S. Air Forces, Europe; Department of the Air Force; in Aviano, Italy.  He requests the U.S. Office of Personnel Management (OPM) reconsider the agency’s denial of his request for living quarters allowance (LQA) and home leave.  We received the request from the claimant on April 14, 2015, the agency’s administrative report (AAR) on April 30, 2015, and the claimant’s June 15, 2015, comments on the AAR.  For the reasons discussed herein, the claim is denied.

The record shows the claimant was stationed as a military member in Aviano, Italy, prior to his being placed on military terminal leave in November 2009 until his February 28, 2010, retirement from the military.  While in Italy, he applied for his current Federal civil service position, which the record shows was advertised from September 25, 2009, to October 1, 2009.  He accepted the job offer extended to him on January 14, 2010, and was appointed to the Federal civil service position on May 27, 2010.  He was determined ineligible for LQA at the time of appointment.

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 or other agency implementing guidance may be applied.

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.]

In the March 19, 2015, response to the claimant’s LQA request, the Civilian Personnel Officer for the Department of the Air Force’s 31^st Fighter Wing, although determining that he meets provisions of DSSR section 031.12b as a former military member maintaining “substantially continuous employment[1],” denied his request as follows:

Your ineligibility was based on section 031.12a of the DSSR, referencing that your continued presence in Italy after your retirement from the military service was primarily due to your relationship with an Italian and the (co-)ownership of a house in the vicinity of Aviano.  Accordingly, your actual residence at the time of appointment cannot be reasonably attributed to employment with the U.S. Air Force, and thus the requirement of DSSR 031.12.a. is not met and LQA had to be denied.

The claimant disagrees with the agency’s determination regarding DSSR section 031.12a, stating in his claim request to OPM that he “adamantly denies ever being a resident in his town or in location within Italy.”  Had he been a “resident” of Italy, he asserts that he would not have been considered eligible for his current Federal service position nor issued a passport from the United States or work visa from Italy.  He also states he has not been issued an identification card from the Italian Government or registered as a “resident” by the City Hall Registrar’s Office in Italy, and that his retirement and income from his Federal service position are not subject to taxation by the Italian Government.  The claimant asserts he has maintained a residence in Sherman, Texas, since August 1987[2].  To support his assertions, he submitted various information including: (1) a document showing he is registered to vote in Texas, (2) his notarized statement that he has “not established residence or been granted residency by any Italian Government agency,” (3) a notarized document with an Italian-to-English translation of a purchase agreement for the Italian property for which he shares ownership, (4) a notarized document regarding property tax breaks, and (5) documents identifying he and his family members issued by Italian city Government offices.

Relative to these assertions, the claimant states he has a “domicile status” similar to military and other Federal civilian employees in Italy.  However, he misconstrues the eligibility criteria concerning residency under DSSR section 031.12a, which specifically states LQA may be granted to employees recruited outside the United States provided that the employee’s actual place of residence to which the allowance applies is attributable to his/her employment by the U.S. Government.  We regard “residence” in terms of its commonly-understood meaning and usage as to live in a place as one’s usual, customary dwelling place.  Physical residency involves where the employee actually, physically resides regardless of the home of record, legal residence, or domicile status.  The claimant’s attempt to conflate “residence” as used in the DSSR and “domicile” as the term is used for military and other matters is not relevant to our interpretation of DSSR section 031.12a.  The only distinction to be made is where the claimant was physically residing (i.e., the actual place of his residence), which the record shows is Italy.  Thus, that he has not been issued an identification card by, nor pays income taxes to, the Italian Government has no bearing on his eligibility for LQA under DSSR section 031.12a.

The claimant states he remained in Italy after accepting the agency’s January 14, 2010, job offer and until his appointment to the Federal service position on May 27, 2010.  He explains remaining in Italy for the four-month gap due to issues with his passport and visa.  He asserts he would have been appointed to his Federal service position without delay if the agency had an established process in place for issuance of passports and visas.  Implicit in his rationale is that he would have been deemed eligible for LQA under DSSR section 031.12a if there had been no four-month gap.  Regardless, that the claimant presents a set of hypothetical circumstances does not confer eligibility for LQA under controlling policy and regulations based on his actual circumstances.  We further note his assertions regarding the agency’s failure to appoint him to the position in a timely manner are unrelated to and thus immaterial to the agency’s reason for denying LQA.

The claimant also asserts in his claim request that, after his military retirement, he “planned to gain employment from his home of record” in Sherman, Texas, thus implying he intended to re-establish residency in the United States.  However, this is contradicted by his responses on his May 27, 2010, "Local Applicant Questionnaire."  For example, in response to the question of how long he intended to stay in the overseas area "regardless of whether or not ...employed by the U.S. Forces," he checked "indefinitely" and "3-5 years," and in response to the question regarding his "status and reasons for being in the overseas area," he checked "other" (as opposed to "former military member") and wrote in "civilian."  These responses would appear to indicate his intent to continue his residency in Italy regardless of his employment status. 

The DSSR sets forth the basic eligibility criteria for the granting of LQA.  However, under section 013, it allows 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 allowance, 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 of and accounting for these payments.

The use of the permissive term “may” in this section as opposed to the mandatory terms “shall” or “will” identifies these allowances as discretionary on the part of the agency.  Further, DoDI 1400.25 articulates the Department of Defense policy on the granting of LQA and provides the following guidance:

Overseas allowances and differentials are not automatic salary supplements, nor are they entitlements.  They are specifically intended to be 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 the foreign area, that inducement is normally unnecessary.  Individuals shall not automatically be granted these benefits simply because they meet eligibility requirements.  [Emphases added.]

Within this context, the agency’s determination of the claimant’s eligibility under DSSR section 031.12a is largely subjective in nature and dependent on an assessment of whether his presence in Italy was “fairly attributable” to his Federal employment.  The agency considers his presence in Italy, after his retirement from the military, was “primarily due to [his] relationship with an Italian and the (co-)ownership of a house in the vicinity of Aviano,” and thus his presence there cannot be considered as “fairly attributable to his/her employment by the United States Government.”  See OPM File Number 14-0049, March 12, 2015.  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.  Given the discretionary nature of LQA and the circumstances of this case, the agency's conclusion cannot be regarded as unreasonable and therefore, we will not substitute our judgment in regard to the agency’s determination that the claimant is ineligible under DSSR section 031.12a.

The claimant asserts that the agency’s contentions regarding his being a “resident” of Italy conflicts with his standing under the Status of Forces Agreement (SOFA) between the United States and Italy.  He states he was SOFA-sponsored while he was a military member stationed in Italy but that the “SOFA does not grant Claimant any type of special Italian residency based upon being a property owner and/or married to his spouse, for the past 10 years, who is Italian.”  The claimant’s assertions regarding the applicability of SOFA to LQA determinations are misplaced.  The SOFA is a diplomatic instrument that establishes the legal treatment of U.S. Armed Forces stationed in Italy.  Its purpose is to shield U.S. service members and Department of Defense civilians from the Italian legal and taxation systems, not from U.S. laws and regulations.  This confers neither entitlement nor eligibility for LQA.  The claimant’s attempt to rely on and apply SOFA terminology to the LQA determination process is contrary to the basic principles of statutory and regulatory construction.  See OPM File Number 09-0039, March 19, 2010.

The claimant states his organization recently hired and granted LQA to a “local hire,” who was also a former military member who applied for a position advertised worldwide.  OPM has no authority to authorize payment based solely on consideration of equity.  We note LQA is designed exclusively as a recruitment incentive and not an entitlement.  The agency has the authority to offer LQA in those instances where they feel it necessary to attract qualified candidates and the fiduciary responsibility to limit it to those instances.  Therefore, the claimant’s assertion that he has not been treated equitably has neither merit nor applicability to our claim settlement determination.

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 section 178.105 of title 5, Code of Federal Regulations (CFR), 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.

The claimant requests reconsideration of the agency’s denial for home leave and to “gain back [annual] leave” used in June 2014.  As provided in 5 CFR 630.602, an employee who meets the requirements of 5 U.S.C. 6304(b) for the accumulation of a maximum of 45 days of annual leave earns and may be granted home leave.  Eligibility criteria for 45-day annual leave accumulation are set forth in 5 U.S.C. 6304:

(b)  Annual leave not used by an employee of the Government of the United States in one of the following classes of employees stationed outside the United States accumulates for use in succeeding years until it totals not more than 45 days at the beginning of the first full biweekly pay period, or corresponding period for an employee who is not paid on the basis of biweekly pay periods, occurring in a year:

(1)     Individuals directly recruited or transferred by the Government of the United States from the United States or its territories or possessions including the Commonwealth of Puerto Rico for employment outside the area of recruitment or from which transferred.

(2)     Individuals employed locally but –

(A) (i)  who were originally recruited from the United States or its territories or possessions including the Commonwealth of Puerto Rico but outside the area of employment;

(ii)  who have been in substantially continuous employment by other agencies of the United States, United States firms, interests, or organizations, international organizations in which the United States participates, or foreign governments; and

(iii)  whose conditions of employment provide for their return transportation to the United States or its territories or possessions including the Commonwealth of Puerto Rico; or

(B)  (i)  who were at the time of employment temporarily absent, for the purpose of travel or formal study, from the United States, or from their respective places of residence in its territories or possessions including the Commonwealth of Puerto Rico; and

(ii)  who, during the temporary absence, have maintained residence in the United States or its territories or possessions including the Commonwealth of Puerto Rico but outside the area of employment.

(3)     Individuals who are not normally residents of the area concerned and who are discharged from service in the armed forces to accept employment with an agency of the Government of the United States.

The claimant does not meet 6304(b)(1) because he was not directly recruited or transferred by the Government from the United States for employment in Italy.  Rather, the claimant was already physically residing in Italy when he was recruited by the agency.

The claimant does not meet 6304(b)(2)(A) because he does not meet the three separate requirements under (b)(2)(A)(i)-(iii) as required by law.  He was appointed to the Federal service position following active duty military service and, as addressed in a previous compensation claim decision issued by OPM, OPM File Number 1996-01102 (See at http://www.opm.gov/policy-data-oversight/pay-leave/claim-decisions/decisions/1996/60110300/), the term “employment” is restricted to civilian employment:

The “substantially continuous employment” test in (b)(2) applies only when an individual is moving from one civilian (or private sector) position to a civilian position in the federal service.  However, members of the armed forces are not “employees”, nor is their tenure in the armed services considered “employment”.  Through the definitions in section in [sic] 5 U.S.C. 6301(2), the term “employee”, as used in section 6304, incorporates the definition of employee in 5 U.S.C. 2105, which expressly applies to persons appointed into the civil service.  By contrast, subsection (b)(3) expressly provides [sic] applies to persons discharged from the armed forces.  Therefore, if a civilian employee hired overseas claims entitlement to home leave based on prior military service, the applicable subsection is (b)(3).

The claimant does not meet 6304(b)(2)(B) because at the time of employment he was not temporarily absent from the United States for travel or formal study.  Instead, he remained in Italy from the beginning of his terminal military leave in November 2009,  until his new civilian job began in May 2010 for the personal reasons described above and not in order to travel or engage in formal study.

The claimant does not meet 6304(b)(3) because he was not discharged from service in the armed forces to accept Federal civilian employment but rather retired from such service.  See OPM File Number 11-0021.

The controlling regulations for home leave are contained in 5 CFR 630.602, which states:

An employee who meets the requirements of section 6304(b) of title 5, United States Code, for the accumulation of a maximum of 45 days of annual leave earns and may be granted home leave in accordance with section 6305(a) of that title and this subpart.

Thus, the receipt of home leave is dependent on eligibility for 45-day annual leave accumulation under section 6304(b).  Since the claimant is not eligible for 45-day annual leave accumulation, he is also not eligible for home leave.

The claimant also makes various allegations of discrimination and defamation of character against his agency.  He seeks monetary relief in the amount of $223,440 for discrimination and $167,580 for character defamation, but he does not provide an explanation for his calculations.  The claims jurisdiction authority of OPM is limited to consideration of statutory and regulatory liability.  OPM adjudicates compensation claims by determining whether controlling statute, regulations, policy, and other written guidance were correctly applied to the facts of the case.  Therefore, the claimant’s discrimination and character defamation allegations, as well as the associated monetary relief he requests, are not subject to review under OPM’s claims adjudication authority of 31 U.S.C. 3702(a)(2) and will not be addressed further.

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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