Military Leaves and USERRA

By Robert K. Stewart, Jr. and Mark J. Hackett
[Feb. 2003]

With war in Iraq looming, as of February 19, 2003, over 151,000 members of the Reserves and National Guard are currently serving on active duty, with more call-ups likely in the coming months. That represents an increase of nearly 100,000 reservists serving in active duty since the beginning of the year. This dramatic increase in the reserve call-up has important implications for employers whose employees are called to active duty.

USERRA

The Uniformed Services Employment and Reemployment Rights Act ("USERRA"), 38 U.S.C. § 4301, et seq., is the most important law employers need to understand when dealing with employees called to military service or training. This federal law applies to all American employers, regardless of size, and provides job protection and special employment benefits rights to employees on military leave.

Qualifying Service. USERRA applies to all employees voluntarily or involuntarily in the uniformed services of the United States, which includes all branches of the military, including the Army, Navy, Air Force, Marines, Coast Guard, Army National Guard and Air National Guard, the Public Health Service's commissioned corps, and any other category of persons designated by the president in time of war or national emergency. USERRA’s protections apply to full-time and part-time employees, but not to short-term temporary employees. Employees are protected while on active duty or attending active or inactive duty training, including weekend and annual reserve and National Guard training. While USERRA does not apply to service in state militias, state laws may afford comparable protections.

Length of Leave. An employee is generally entitled to take up to five years of leave for military service under USERRA. Under certain circumstances, that time period can be extended, such as when the employee is required to remain on duty after his or her five-year military leave expires because of a war or other national emergency. An employee must provide appropriate notice of the need for leave to his or her employer.

Compensation During Leave. USERRA does not require employers to compensate employees during absences due to military service. Many employers, however, choose to pay their employees a portion or all of their pay for some period of time during military leave. Employees may, but are not required, to use accrued paid vacation while performing military duty.

Benefits Generally. Employees on military leave are entitled to the same benefits provided to employees who are on other forms of leave. For example, if employers typically provide continued life or disability insurance benefits to employees on unpaid leave, these benefits must be provided to employees on military leave.

Special Rules for Health Insurance Benefits. USERRA provides a COBRA-like continuation of coverage option for health insurance benefits. An employee on military leave for more than 30 days may continue health insurance benefits for up to 18 months, including coverage for the employee’s family. The cost to the employee is capped at 102 percent of the regular premium. When an employee returns from military leave, a plan may not impose a waiting period or any exclusion that would not have been applied had the individual not left employment for military service. However, a plan may include exclusions for service-related injuries or illnesses.

Reinstatement Rights. Perhaps the most important protection afforded by USERRA is job protection for employees returning from military leave. Reinstatement rights vary depending upon the length of the military leave, but generally an employee must be reinstated to the position the employee would have occupied had he or she remained on the job, including any promotions the employee would likely have received if he or she had remained continuously employed. If necessary, an employer must provide training to an employee to enable him or her to perform the job. In addition, reasonable efforts must be made to accommodate an employee disabled while on military duty. If the returning employee cannot perform the job the employee would have occupied had he or she remained on the job, the employer must place the employee in an available alternative position with comparable compensation, benefits, duties and opportunity for advancement. Reinstatement rights may be lost if the employer’s circumstances have changed so as to make reemployment an undue hardship, impossible or unreasonable.

The statute requires a returning employee to apply for reinstatement in a timely fashion, with “timely” being determined by the length of the military leave. Reinstated employees may only be discharged for cause during a specified period of time after they return to work. As with the right to reinstatement itself, the length of this time period depends on the duration of the leave.

Prohibition Against Discrimination. USERRA prohibits employers from discriminating against, or retaliating against an individual because of his or her affiliation with a military service organization. For example, USERRA makes it unlawful to refuse to hire an applicant because he or she serves in the military reserves. It is also unlawful to terminate a reservist employee's employment because he or she is called to active duty. Similarly, an employer cannot terminate an employee because he or she enlists in the military.

Some employers may consider creation of a list of employees who have military reserve obligations for the purpose of preparing contingency plans in the event of a mass call-up or to assess their potential financial obligations under USERRA. While we are unaware of any decisions forbidding this practice, such a list might be used against an employer to help establish a prima facie case of discrimination in the event of a claimed violation of USERRA. Suggested practices to help minimize this risk include making disclosures voluntary, similar to affirmative action information, and strictly limiting access to the information. The same considerations apply to inquiries concerning military reserve status during the hiring process.

Enforcement and Penalties. USERRA is enforced by the United States Department of Labor’s Veterans’ Employment and Training Service. Both the federal government and individual employees can sue to enforce USERRA leave provisions. Possible penalties for USERRA violations include lost wages and benefits, liquidated damages in the case of willful violations, attorneys' fees, expert witness fees, and other litigation costs.

OTHER LAWS

Several other federal laws provide protections and grant special rights to members of the military, including the Soldiers’ and Sailors’ Civil Relief Act, 50 U.S.C. App. § 501 et seq. (restrictions on debt collection and other civil actions against persons on active duty) and the Vietnam Era Veterans' Readjustment Assistance Act of 1974, 38 USC § 4212 (federal contractor affirmative action requirement for hiring veterans of the Vietnam War). In addition, state laws often provide protections for members of the military.

WHAT SHOULD YOU DO?

It is a good idea for employers to adopt a military leave policy or review any existing policies with counsel for compliance with USERRA and other applicable laws. Employers may consider granting additional rights beyond those required by federal law, such as making up the pay difference between the employees’ normal compensation and their military pay for a defined period of time. Employers should also review employee benefits plans and practices to assure proper treatment of participants on and returning from military leave.

HOW CAN DAVIS WRIGHT TREMAINE HELP?

USERRA and the other federal and state laws protecting military personnel impose obligations on employers at every stage of the employment relationship. They are complicated and easily misunderstood, especially since most employers have very little experience with military leave issues. Davis Wright Tremaine’s employment and employee benefits attorneys can help you understand your rights and obligations and prepare you to deal with employees in the military services by preparing or reviewing military leave policies, reviewing benefits policies and advising you when issues arise.

Note: DWT will be hosting a breakfast briefing, “Managing Military Leaves of Absence,” in Portland on April 10, 2003 addressing USERRA and other employment issues arising when employees volunteer or are called to military service.

A model military leave policy is also available for $25 on DWT's Online Bookstore.

Any questions about this Advisory should be directed to:

Robert K. Stewart, Jr., Anchorage, (907) 257-5336, bobstewart@dwt.com
Mark J. Hackett, Portland, (503) 778-5208, markhackett@dwt.com

This Employment Law Advisory is a publication of the Employment Law Department of Davis Wright Tremaine LLP. Our purpose in publishing this Advisory is to inform our clients and friends of recent developments in employment law. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.

Copyright © 2003, Davis Wright Tremaine LLP.

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