With President Bush’s announced call up of military reservists to the uniformed services for Homeland Defense, employers should be reminded of and reexamine personnel policies on leave and reemployment rights of employees who will be absent from civilian employment to serve in this country’s military forces.

The following is a summary of an employer’s obligations under federal law:

Under the "Uniformed Services Employment and Reemployment Rights Act of 1994," ("USERRA") 38 U.S.C. § 4301 et seq., it is unlawful for an employer to refuse an employee’s military leave of absence, or to discriminate in employment or reemployment based on military service, including non-career service. USERRA extends reemployment rights to individuals who have been absent from a position of employment on account of military duty in the "uniformed services" which are defined as:

  • Army, Navy, Marine Corps, Air Force, or Coast Guard.
  • Army Reserve, Naval Reserve, Marine Corps Reserve, Air Force Reserve, or Coast Guard Reserve.
  • Army National Guard or Air National Guard.
  • Commissioned Corps of the Public Health Service.
  • Any other category of persons designated by the President in time of war or emergency.

"Service" means the performance of such military duty on a commission or non-commission status, and on a voluntary or involuntary basis, in a uniformed service, including:

  • Active duty
  • Active duty for training
  • Initial active duty for training
  • Inactive duty training
  • Full-time National Guard duty
  • Absence from work for an examination to determine a person’s fitness for any of the above forms of duty
  • Funeral honors duty by National Guard or reserve members.

Under USERRA, it is unlawful for an employer to deny initial employment, reemployment, retention in employment, promotion, or any benefit of employment with respect to a person who is a member of or performs, applies to be a member of or perform, or who is obligated to perform service in a uniformed service.

Reemployment Rights And Employment Benefits

Under USERRA, an employee is entitled to reemployment rights and maintenance of employment benefits only if the person returning from military service meets five eligibility criteria:

  • The person must have held a civilian job with the employer;
  • The person must have given advance notice to the employer that he or she was leaving the job for service in the uniformed services;
  • The period of service must not have exceeded five (5) years;
  • The person must have been released from service under honorable conditions; and
  • The person must have reported back to the civilian job in a timely manner or have submitted a timely application for reemployment.

Notice By Departing Employee

Under USERRA, an employee must provide advance written or verbal notice to the employer of all military duty, unless giving notice is impossible, unreasonable, or precluded by military necessity. Notice may be provided by the employee or by an appropriate officer of the branch of the military service in which the employee will be serving. The law only requires "advance" notice, but does not specify how far in advance notice must be given.

Length Of Service

Although the law no longer differentiates between voluntary and involuntary military service, there is a five (5) year cumulative service limit on the amount of military service an employee can perform and still retain reemployment rights. The 5-year limit does not include: inactive duty training; annual training; involuntary recall to active duty or involuntary retention on active duty; or voluntary or involuntary active duty in support of war, national emergency or certain operational missions, such as the current Homeland Defense operational mission and reservist call up.

Notice By Returning Employees

A returning employee’s notification of an intent to return to work must be made promptly following completion of military service. Time limits for returning to work depend on the length of a person’s military service.

Service of 1 to 30 days

Under USERRA, in the case of someone whose military service was less than 31 days, the returning employee must report to the employer not later than the beginning of the first regularly scheduled work period on the first full calendar day following completion of service and the expiration of eight hours (i.e., an 8-hour "rest period") after a period allowing for safe transportation home from the place where military service was performed. In some circumstances, time limits for returning to work may be "as soon as possible" if reporting on the first regularly scheduled work period is "impossible or unreasonable through no fault of [the returning employee]."

Service of 31 to 180 days

For returning employees whose military service was more than 30 days but less than 181 days, an application for reemployment must be submitted no later than 14 days following completion of military service, or "as soon as possible" if the failure to make timely application is through no fault of the returning employee. Also, for returning employees whose length of service is more than 30 days, an employer may require the employee to provide documentation that: (1) the application is timely; (2) the leave has not exceeded the 5-year limit; and (3) the separation from military service was not disqualifying.

Service of more than 180 days

For those returning employees who serve more than 180 days, applications for reemployment must be submitted not later than 90 days from completion of military service.

Notice by disabled persons

Finally, returning employees who are hospitalized for or convalescing from injuries incurred in or aggravated by military service may apply for reemployment within two (2) years following recovery from such injuries.

Failure to give timely notice

If a returning employee fails to apply for reemployment or report to work within the specified time limits, the returning employee will be subject, without discrimination, to the employer’s rules governing unexcused absences.

Returning Employees’ Job Rights

The job position to which a returning employee is entitled also depends upon the length of military service. USERRA mandates generally that returning employees are to be reemployed in the same or similar position they would have attained but for their military service, with the same seniority, status and pay, as well as other rights and benefits determined by seniority.

Service of 90 days or less

Under USERRA, returning employees whose military service was less than 91 days are entitled to return to the positions in which they were employed or would have been employed if their employment had not been interrupted.

Service of more than 90 days

Returning employees whose military service was for more than 90 days are entitled to return to the positions in which they were employed, would have been employed, or a position of "like seniority, status and pay, the duties of which the person is qualified to perform" after reasonable efforts by the employer to qualify the person.

Training and Retraining Requirement

USERRA also requires that an employer make reasonable efforts, such as training or retraining, to reenable returning employees to refresh and upgrade their skills in order to qualify for reemployment in the position which they would have held if employment had been uninterrupted by military service.

Disabled veterans

For returning employees who are disabled during military service, an employer is obligated to reasonably accommodate the returning employee’s disability. If an employer’s reasonable efforts fail to accommodate the returning employee’s disability, the employee is entitled to any other position for which the employee is qualified or may be made qualified (for example, through training or retraining), and which is equivalent in seniority, status and pay.

"Escalator" Principle

The requirement that a returning employee is entitled to the same position and pay grade, or the position and pay grade which the employee would have held if employment had been uninterrupted, is referred to as the "escalator" principle. It may mean, for example, that the returning employee is entitled to the pre-service position, a better position, a worse position, or no position at all based on the returning employee’s probable advancement had employment been uninterrupted. For example, a collective bargaining agreement during the employee’s absence may change the relative seniority of the pre-service position, so long as such changes are reasonable, bona fide and not adopted for purpose of discrimination against veterans. Where two or more returning employees are entitled to reemployment in the same position, the person who left the position first would have the prior right to reemployment in that position.

"Changed Circumstances" Exception

USERRA provides for a "changed circumstances" exception to veterans’ reemployment rights. An employer is not required to reemploy a returning veteran if the employer’s circumstances have changed sufficiently that reemployment would be impossible, unreasonable, or would impose an undue hardship on the employer. Be advised, however, that this "changed circumstances" exception is narrowly interpreted and does not apply where, for example, the position formerly held by a member of the National Guard has been filled by a replacement worker.

"Brief Non-Recurrent Job" Exception

Reemployment rights do not apply to positions for brief, non-recurrent projects or periods of time, or where there was no reasonable expectation that the employment would continue indefinitely or for a significant period. The courts, however, have interpreted this exception narrowly. For example, this exception does not apply to recurrent part-time or seasonal work.

Compensation

USERRA does not require employers to compensate employees who are performing military service. Some employers, however, have elected voluntarily to compensate employees in military service for the difference between military pay and what the employees would have received had their employment not been interrupted for military service. Other employers offer paid military leave for a specified period, such as 30-days paid military leave per calendar year.

Returning Employees’ Benefits

In addition to reemployment rights for returning employees, USERRA also protects other terms and conditions of employment. Such protections extend to benefits, such as: vacation pay, health plans, pensions, stock options, bonuses, seniority rights, and severance pay.

Health Benefits

USERRA also provides that service members who are on duty for more than 30 days may elect to continue employer-sponsored health care for themselves and their families for up to 18 months (similar to COBRA), but they may be required to pay up to 102 percent of the full premium. Health care coverage of less than 31 days shall be provided by the employer as if the employee out on military service had remained employed.

Upon an employee returning from military service, the employer must reinstate health insurance coverage without any waiting period or exclusion for preexisting conditions, other than what would have applied ordinarily. However, this rule will not apply to the coverage of any illness or injury determined by the Secretary of Veterans Affairs to have been incurred in, or aggravated during the employee’s performance of military duty.

Pension Plans

Pension plans are also protected by USERRA. A "pension plan" that must comply with the requirements of the reemployment law would be any plan that provides retirement income to employees until the termination of employment or later. Defined benefits plans, defined contribution plans, and profit sharing plans that are retirement plans are covered.

Funding of benefits

Service members may be required to pay the employee cost, if any, of any funded benefit to the extent that other employees on leave of absence would be required to pay.

Pension/retirement plans tied to seniority

Pension plans which are tied to seniority are given separate, detailed treatment under the law. The law provides that:

  • A reemployed person must be treated as not having incurred a break in service with the employer maintaining a pension plan;
  • Military service must be considered service with an employer for vesting and benefit accrual purposes;
  • The employer is liable for funding any resulting obligation; and
  • The reemployed person is entitled to any accrued benefits from employee contributions only to the extent that the person repays the employee contributions.

Other Plans

USERRA also has detailed provisions for multi-employer plans. For example, in a defined contribution pension plan, benefits accrued by employees who are absent for military service may be allocated by the plan sponsor among participating employers. If there is no such cost-sharing arrangement, responsibility for retroactive contributions to the plan will be allocated to the returning service member’s last employer before the period of military service. An employer’s written notice to the plan must be made within 30 days after the returning service member is reemployed.

Employee Contributions

A returning service member is given an extended period of time in which to repay employee contributions. Repayment may be over a period which is 3X the period of military service, but no longer than 5 years.

Waiver Of Certain Benefits

Employees departing for military service cannot surrender reemployment rights and benefits provided by USERRA, except that, prior to departing for military service, an employee may waive entitlement only with regard to non-seniority based leave-of-absence benefits. Such waivers do not apply to other employment and reemployment benefits or rights. The departing employee’s waiver must be clear written notice to the employer of an intent not to return to work following military service, and the waiver must be "knowing" (i.e., the employee must be aware of the specific rights and benefits to be lost) and without coercion by the employer.

Employer Cannot Require Leave

USERRA forbids an employer from requiring an employee to use his or her vacation, annual or similar leave during such period of military service. The employee is permitted, but not required, to request that such military service be counted by the employer as vacation, annual or similar leave with pay.

Military Leave Of Absence

USERRA provides that a person who misses work due to military duty will be deemed to be on furlough or "leave of absence" while performing such service. The employer will be required to provide the same benefits not determined by seniority to that individual as are provided to other employees who miss work due to a "leave of absence." An exception to this provision is health benefits, which are covered above. If there is a variation among different types of non-military leaves of absence, the employer must extend the most favorable treatment to returning service members.

Termination Protection

USERRA also provides that an individual cannot be discharged, except for cause, for one year after being reemployed if that employee served in the military for more than 180 days. A returning employee is protected from discharge without cause for 180 days if the period of service was for less than 180 days but more than 30 days.

Disqualification

Rights to reemployment and benefits depend upon satisfactory completion of the term of military service and terminate, for example, if the returning employee is separated from the uniformed services with a dishonorable or bad conduct discharge, or under "less than honorable conditions" including a sentence of a general court martial.

No Retaliation

USERRA further provides that an employer may not discriminate in employment or take any adverse employment action against any person who took any action to enforce USERRA or testified or assisted another person under the Act or otherwise participated in an investigation or exercised his or her rights under the Act.

Enforcement And Penalties

The U.S. Department of Labor’s Veterans’ Employment and Training Service (VETS) is authorized to investigate and resolve complaints, although the filing of complaints with VETS is optional and not required prior to instituting an action in court. To enforce rights against an employer under USERRA, a returning veteran may institute an action in United States District Court or request assistance of the United States District Attorney in prosecuting the claim. Available remedies include: (1) an order compelling reinstatement to the appropriate position; (2) monetary damages, including backpay and benefits; and (3) attorneys’ fees, expert witness fees, and court costs. In cases of "willful" violations of USERRA, the award of back pay or lost benefits may be doubled (i.e., double damages).

State Laws

USERRA does not preempt state laws providing greater rights, but it does preempt state laws providing lesser rights. Employers are advised that many states have laws similar to USERRA for "state" military duty or where a State Governor calls up members of the National Guard.

Other Helpful Information

Also helpful in explaining an employer’s obligations under USERRA is the U.S. Department of Labor’s website at http://www.dol.gov and the website of the Society for Human Resource Management (SHRM) at http://www.shrm.org.

Should you have any questions or require any additional information, please feel free to contact the Ogletree Deakins attorney with whom you normally work or Hal Coxson.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.