As part of the effort to make the return to civilian life as seamless as possible for the thousands of troops returning from Afghanistan and Iraq, President Obama signed into law on November 21, 2011 the Veterans Opportunity to Work ("VOW") to Hire Heroes Act. VOW is meant both to encourage employers to hire veterans and to offer additional protections to veterans entering the workforce. Of the Act's three main provisions, two are of interest to employers.
First, the Act offers tax credits to employers who hire qualified veterans, which are defined as veterans who have been looking for work for more than four weeks. According to the Bureau of Labor Statistics, over 800,000 of the nearly 21.2 million veterans in the civilian population as of March 2012 are unemployed. A large portion of these veterans are from the Gulf War II era and are under the age of 35. The unemployment rates for these veterans are well above those for the civilian population.
To decrease this number, VOW offers a tax credit of up to $5,600 to an employer who hires a qualified veteran who has been looking for work for over six months. That tax credit is doubled to $9,600 if the qualified veteran has a service-connected disability. An employer can also receive a tax credit of up to $2,400 for hiring an unemployed veteran who has been looking for work for over four weeks but less than six months. Generally, employers must request the credit within 28 days after hiring the qualified veteran. The IRS has made it relatively simple for employers who have already hired or who plan to hire qualified veterans to take advantage of the credit by releasing applicable forms, which are available at http://www.irs.gov/pub/irs-pdf/f8850.pdf .
As with most federal legislation, VOW giveth and it taketh away. Of concern for employers is the Act's amendment to the Uniformed Services Employment and Reemployment Rights Act ("USERRA"), creating a hostile work environment private right of action for individuals based on their military status. Historically, federal courts have been reluctant to recognize a hostile work environment claim under USERRA, and it was unclear whether such a claim could survive. This amendment erases those doubts.
USERRA now prohibits discrimination against veterans with respect to the "terms, conditions, or privileges of employment." See 38 U.S.C. § 4303(2). This standard brings USERRA on par with other federal antidiscrimination laws, such as Title VII and the Americans with Disabilities Act. It also opens up liability – including payment of lost wages, benefits, and potentially liquidated damages for willful violations – for employers who discriminate against individuals based on veterans status or subject them to a hostile work environment.
With the anticipated influx of veterans into the labor pool, employers should expect to see an uptick in applicants with some military status. By virtue of their statuses, veterans will be sympathetic plaintiffs. To avoid a simultaneous increase in USERRA claims, employers should begin to take preventive action by revising equal opportunity policies and procedures, including complaint-reporting procedures, to ensure they include military and veteran status. Employers also should train all managers, supervisors, and hiring personnel on the importance of USERRA compliance, and any complaints by applicants or employees regarding potential violations of USERRA should be promptly investigated and addressed.
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