If Your Employees Are Called to Military Duty: FAQs
AND REEMPLOYMENT RIGHTS ACT OF 1994 ("USERRA")
The tragic events in New York, Washington and Pennsylvania have affected all of us individually and as employers in dramatic and powerful ways. Those of us fortunate enough not to have lost a loved one, friend or employee have shared the grief of others. We also wait expectantly for news from our government regarding our nation’s response. As you make or revise business plans, we know that President Bush has instructed all military personnel to be on standby and has already activated some reserve components of the military. This means that some of your employees will be called into active duty. When this happens, your response to an employee’s request for military leave needs to comply with the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
We have issued previous bulletins providing information about the differences between USERRA and the requirements of statutes replaced by the new law. Our Client Bulletin No. 306 is still an accurate summary, and another copy will be forwarded at your request. In response to an increasing number of inquiries from clients about USERRA’s requirements, we have prepared an updated overview in an extensive and detailed "question and answer" format. This should also be a useful human resources tool.
If you have questions or require additional information, please call on your regular Constangy, Brooks & Smith attorney or contact Mike Giles/Linda Shaper in our Birmingham office at (205) 252-9321 or e-mail mgiles@constangy.com or contact Bob Lemert in our Atlanta office at (404) 525-8622 or e-mail rlemert@constangy.com.
GENERAL QUESTIONS
QUESTION: What conduct by employers does USERRA prohibit?
ANSWER: USERRA prohibits any employer from denying initial employment, reemployment, retention in employment, promotion, or any benefit of employment to any person because he/she is a member of or applies to be a member of a uniformed service, or because he/she performs, has performed, applies to perform, or has an obligation to perform service in a uniformed service.
Also, an employer may not discriminate in employment or take any adverse employment action against any person because he/she takes any action to enforce USERRA, testified or assisted another person under the Act, or otherwise participated in an investigation or exercised any right under the Act.
QUESTION: What does "uniformed services" mean?
ANSWER: As used in USERRA, "uniformed service" means duty assignments in any of the following services:
• Army, Navy, Marine Corps, Air Force, or Coast Guard;
• Reserve units of the Army, Navy, Marine Corps, Air Force, or Coast Guard;
• Army National Guard and Air National Guard;
• Commissioned Corps of the Public Health Service; and
• Any other category of persons designated by the President in time of war or national emergency.
QUESTION: What kinds of duty in these branches of service are protected?
ANSWER: USERRA provides protection for employees, without regard for whether they are enlisted (non-commissioned) or commissioned personnel when they have orders for any of the following types of duty:
• Active duty
• Active duty for training
• Initial active duty for training
• Inactive duty training
• Full-time National Guard duty
• Examinations to determine fitness for any of the above types of duty
• Funeral honors duty by National Guard or reserve members.
QUESTION: Is an employee protected by USERRA even if he/she volunteers for duty?
ANSWER: Yes, USERRA applies to all military service, without regard for whether it is voluntary or involuntary in nature.
QUESTION: Do probationary, part-time, seasonal and temporary employees and trainees or apprentices all enjoy the protections of USERRA?
ANSWER: Part-time employees, probationary employees, trainees and apprentices will usually be entitled to USERRA’s reemployment rights. If an employee leaves a temporary job that is intended to be for a brief, non-recurrent project or period of time and there is no reasonable expectation that the employment will continue for an indefinite or significant time, he/she should not have reemployment rights under USERRA. However, because of the variety of definitions of "temporary" jobs, reemployment rights for individuals in temporary jobs should be reviewed carefully and not rejected summarily. If an employer wishes to deny USERRA benefits because a person is/was a temporary employee, it must prove that an employment relationship was truly temporary.
Although seasonal employees may not be entitled to USERRA’s protections, in some cases seasonal employees can reasonably expect their seasonal employment to be recurrent from season to season. Such an expectation may arise because of contract, custom or practice. If such an expectation of "continued" employment exists, seasonal employees will have reemployment rights under USERRA.
QUESTION: What agency enforces USERRA and what are an employer’s risks if it violates the Act?
ANSWER: The U.S. Department of Labor’s Veterans’ Employment and Training Service (VETS) is authorized to investigate and resolve complaints by veterans under USERRA; however, filing a complaint with VETS is not required prior to filing a lawsuit. A returning veteran may institute an action in United States District Court to enforce USERRA 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 back pay 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).
QUESTIONS REGARDING MILITARY LEAVE RIGHTS
QUESTION: Is there any limit on how long an employee may be gone from work for uniformed service?
ANSWER: Yes, USERRA permits an employee to serve a total of five years on active duty, without losing re-employment rights. Under certain circumstances, however, this five year limit may be extended. For example, the five year limit does not include time spent on:
• inactive duty training
• annual training
• involuntary recall to active duty
• involuntary retention on active duty to complete an initial period of obligated service
• involuntary retention beyond the five year limit where the person was unable to obtain orders releasing him/her and such inability is through no fault of the individual
• voluntary or involuntary active duty in support of war, national emergency or certain operational missions (such as the current Homeland Defense or Operation Enduring Freedom)
QUESTION: What if an employee has already exhausted his limit on military service at another employer, do we still have to let him/her take time off for military service?
ANSWER: Yes, the five year limitation on military service applies only to active duty performed after the employee leaves a job to which he seeks restoration. Therefore, when you are determining the length of time the employee may take on military leave, you may not consider any active duty performed by the employee before you hired him/her.
QUESTION: Does an employee have to give us notice of his/her military orders before leaving for military service?
ANSWER: As a general rule, yes. USERRA requires an employee to provide advance written or verbal notice to the employer of all military duty, unless giving such notice is impossible, unreasonable, or precluded by military necessity. Unfortunately, the law does not specify how far in advance notice must be given. Also, this notice may be provided by either the employee or by an appropriate officer of the branch of the military service in which the employee will be serving.
QUESTION: Does USERRA require an employer to pay employees while they are on military duty?
ANSWER: No, USERRA does not require employers to pay employees who are performing military service. Some employers voluntarily elect to pay employees the difference between their usual compensation and their military pay during the entire period of military service. Other employers have adopted paid military leave policies that limit these paid leave benefits to a specified period.
Note - In some states, public employers are required by statute to continue all or a part of an employee’s compensation for a defined period of military leave.
QUESTION: Can we require an employee to use accrued vacation, annual or other similar paid leave during military service?
ANSWER: No, USERRA specifically prohibits an employer from requiring an employee to use such paid leave benefits during a period of military service. An employee may, however, voluntarily request to use such paid leave benefits during a military leave.
QUESTION: How are vacation and other benefits that are not accrued purely on the basis of seniority affected by USERRA?
ANSWER: Under USERRA an individual who is away from work because of service in a uniformed service is deemed to be on furlough or "leave of absence" while performing such service. Therefore, an employer is required to provide the same benefits to an individual on military leave as are provided to other employees who miss work due to a "non-military" leave of absence. Thus, if employees on non-military leave do not accrue additional non-seniority based benefits, an individual on military leave is not entitled to accrual of additional benefits. If, however, there is a variation among the benefits provided under different types of non-military leaves of absence, the employer must extend the most favorable of those treatments to returning service members.
Vacation, earned time off, sick leave, etc.
Where an employer has a practice, policy or contract that provides for the accrual of vacation, earned time off, sick leave and other similar benefits that accrue based upon hours worked, an employee on a leave of absence is entitled to return to work after uniformed service with the accrued benefits he/she had when he/she left for uniformed service, but is not entitled to accrue additional benefits during the leave of absence. To the extent that an accrual rate is increased by years of service, a returning individual may not be charged with a break in service for the purpose of determining the veteran’s accrual rate upon his/her return to work.
QUESTION: What happens to an employee’s health insurance benefits while he/she is on military leave?
ANSWER: USERRA 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. If a person is absent from work because of uniformed service for less than 31 days, he/she must be allowed to maintain the same coverage he/she had before entering the service and may not be charged more than the employee’s share, if any was charged, for such coverage.
Upon an employee’s return from military service, the employer must reinstate health insurance coverage without any waiting period or exclusion for pre-existing conditions, other than what would have applied but for the military leave. 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.
QUESTION: What is the effect of military leave on an employee’s participation under an employer sponsored pension plan?
ANSWER: USERRA provides specific requirements for pension plans that are covered by ERISA and federal or state laws that govern pension benefits for government employees. "Pension plans" that must comply with USERRA’s requirements include defined benefits plans, defined contribution plans, and profit sharing plans that are retirement plans.
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
USERRA provides separate, detailed provisions governing pension plans that are tied to seniority. The law provides that:
• A reemployed person must not be charged a service break for time spent in the uniformed services for vesting and benefit accrual purposes.
• The reemploying employer is liable for funding any obligation under the employer sponsored plan in the same manner and to the same extent as the allocation occurs for other employees during the period of service.
• The reemployed individual is entitled to accrued benefits that are contingent on the making of or derived from employee contributions or elective deferrals only to the extent that the person repays the employee contributions upon his/her reemployment.
• A returning employee may be given an extended period during which to repay employee contributions. This period may be up to three (3) times the period of uniformed service, not to exceed five (5) years.
QUESTION: May an employee waive his/her reemployment rights under USERRA?
ANSWER: An employee who is leaving employment for a period of uniformed service may waive entitlement only to non-seniority based reemployment rights and benefits provided by USERRA. A person’s statutory right to participate in his employer’s retirement plan may not be waived before he/she enters military service. For a waiver to be effective, it must be created by a clear, unequivocal written notice to the employer of the employee’s intent not to return to work following completion of uniformed service. The employer must prove that such a waiver is "knowing" and voluntary and without coercion by the employer. For such a waiver to be considered "knowing," the employee must be aware of the specific rights and benefits he/she will lose as a result of the waiver.
QUESTION: Does USERRA change the employment-at-will nature of the employment relationship after an employee is reemployed?
ANSWER: Yes, if an employee serves in the uniformed service for more than 180 days, USERRA provides that he/she cannot be discharged, except for cause, for one year after being reemployed. If an employee serves in the uniformed services for more than 30 days, but less than 181 days, USERRA provides that a returning employee is protected from discharge without cause for 180 days.
QUESTION: Does USERRA pre-empt state laws that provide military leave benefits?
ANSWER: USERRA pre-empts only state laws that provide lesser military leave benefits.
QUESTIONS REGARDING RETURN TO WORK RIGHTS
QUESTION: What happens if an employee who did not give us notice of his/her military orders before leaving for military service wants to return to work?
ANSWER: If an employee’s failure to give notice of his/her military duty is the result of deliberate disregard of the employer’s needs, the reemployment right may be forfeited. However, to prevail, the employer must prove that the employee deliberately disregarded its needs. For example, the Sixth Circuit Court of Appeals upheld an employer’s denial of reemployment to a reservist who gave the employer only 15 minutes’ notice of a need for a three week leave of absence.
QUESTION: Are there any grounds for denying reemployment under USERRA?
ANSWER: Yes. USERRA provides the following three grounds for denying reemployment rights to persons returning from service in the uniformed services:
1. The employer’s circumstances have so changed as to make reemployment impossible or unreasonable;
2. Reemployment of a person who has a service related disability or who is not qualified for certain types of employment, after reasonable efforts by the employer, if reemployment would impose an undue hardship on the employer; and
3. The person seeking reemployment left for uniformed service from a job that was for a brief, non-recurrent period and there was no reasonable expectation that such employment would continue indefinitely or for a significant period (e.g., temporary and some seasonal jobs).
Note: The determination of whether the "changed circumstances" and "undue hardship" justifications for denying reemployment is complicated and must be based upon compliance with the statute, regulations and case law. If you have questions about these issues, call your Constangy, Brooks & Smith lawyer.
QUESTION: Is an employee who is released from uniformed service under "less than honorable" conditions entitled to USERRA’s reemployment rights?
ANSWER: No, an individual’s reemployment rights terminate under USERRA if he/she is dismissed from uniformed service with a "dishonorable" or "bad conduct" discharge, or is discharged under "less than honorable conditions."
QUESTION: What kind of notice must an employee give an employer before he/she is entitled to USERRA’s reemployment rights?
ANSWER: Under USERRA, an individual’s right to reemployment requires that he/she report back to the civilian job or submit an application for reemployment in a "timely" manner. The time limits for returning to work depend on the length of the person’s period of uniformed service and whether or not the person has been disabled as a result of uniformed service. In addition to setting time limits for returning to work, the statute defines the action returning veterans must take to initiate the reemployment process. In general, veterans who serve less than thirty-one (31) days must report for work, while veterans who return after more than thirty-one (31) days must submit an application for reemployment.
QUESTION: May employers require returning veterans to provide documentation demonstrating that they are entitled USERRA’s benefits?
ANSWER: Yes, employers may require returning employees whose length of service is more than 30 days to provide documentation that: (1) the application for reemployment is timely; (2) the leave has not exceeded the 5-year limit; and (3) the separation from military service was not disqualifying.
QUESTION: What happens to an individual’s USERRA rights if he/she fails to report back to work or submit an application for reemployment in a "timely manner"?
ANSWER: If a returning employee fails to apply for reemployment or report to work within the specified time limits, the returning employee may not automatically be denied the rights and benefits afforded under USERRA. Instead, because an individual who is absent from work to fulfill a uniformed services obligation must be considered to be on furlough or a leave of absence, he/she must be subject, without discrimination, to the employer’s rules governing unexcused absences.
QUESTION: If an individual satisfies all the obligations required to become entitled to reemployment under USERRA, what are his/her job rights?
ANSWER: The job to which a returning employee is entitled depends upon the length of the person’s uniformed service, the returning individual’s qualifications, whether he/she has a service related disability and whether two or more returning veterans are entitled to the same position. The statute and regulations provide a very detailed procedure for identifying the job into which a returning veteran must be placed. If you have questions regarding this issue, contact your Constangy, Brooks & Smith lawyer.
QUESTION: What is the "Escalator" Principle under USERRA?
ANSWER: The requirement that a returning employee be returned to the same position and pay grade that the employee would have held if employment had not been uninterrupted by uniformed service, or to a position that is equivalent in seniority, status and pay, is referred to as the "escalator" principle. The application of this "escalator" principle may result in the returning employee being entitled to his/her preservice position, a better position, a worse position, or no position at all based on the returning employee’s probable advancement had employment been uninterrupted.
QUESTION: How does the "Escalator" Principle affect a returning veteran’s seniority, pay, vacation and other benefits?
ANSWER: Under USERRA, a person who is reemployed after satisfactory completion of a period of uniformed service is entitled to the seniority and other rights and benefits that are determined by the person’s seniority on the date the uniformed service began, plus the additional seniority, rights and benefits that the person would have attained if he/she had remained continuously employed. This principle affects seniority, pay, vacation and other benefits as follows:
Seniority
USERRA requires that a period of uniformed service not cause a break-in-service for seniority purposes or for any benefit that is determined on the basis of an individual’s seniority.
Effect of Collective Bargaining Agreement Changes - A returning veteran’s relative seniority can be increased or decreased by changes in collective bargaining agreements negotiated during a veteran’s absence as long as the changes are reasonable, bona fide, and not adopted to discriminate against veterans.
Pay
Pay, for USERRA purposes, includes all elements of a person’s compensation. Thus, pay includes not only salaries, hourly rates, piece rates or commissions, but also shift differentials, bonuses, draw accounts, stock options, severance pay and any other form of compensation for similarly situated employees. Generally, a returning veteran is entitled to the same pay or compensation he would have reached as a result of the application of the employer’s seniority rules if his employment had not been interrupted by uniformed service.
Vacation
Where an employer has a policy, practice or contract that provides for vacation benefits that accrue automatically purely as a function of continued employment, a returning veteran will be entitled not only to the vacation he/she had at the time the uniformed service began, but also to any additional vacation to which he/she would have become entitled but for the interruption caused by the uniformed service.