You & USERRA: An Employer s Guide to Military Leave

Transcription

1 You & USERRA: An Employer s Guide to Military Leave Julie Athey Attorney M. LEE SMITH PUBLISHERS LLC Brentwood, Tennessee

2 This special report provides practical information concerning the subject matters covered. It is sold with the understanding that neither the publisher nor the writer is rendering legal advice or other professional service. Some of the information provided in this special report contains a broad overview of federal law. The law changes regularly, and the law may vary from state to state and from one locality to another. You should consult a competent attorney in your state if you are in need of specific legal advice concerning any of the subjects addressed in this special report M. Lee Smith Publishers LLC 5201 Virginia Way P.O. Box 5094 Brentwood, Tennessee ISBN X All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means without permission in writing from the publisher. Printed in the United States of America

3 Contents INTRODUCTION USERRA PROTECTIONS... 3 Covered Employers... 3 Employee Eligibility... 5 Amount of Leave Required... 7 Benefits Protections... 8 Job Reinstatement Discrimination and Retaliation Policies and Procedures Enforcement and Litigation INTERACTION WITH THE FMLA Comparison of USERRA and FMLA FMLA Leave for Military Families Effect of USERRA Leave on FMLA Eligibility DISABILITIES UNDER THE USERRA AND ADA USERRA Provisions for Disabled Employees Comparison of USERRA to ADA Other ADA Implications for Disabled Veterans iii

4 You & USERRA: An Employer s Guide to Military Leave 4 USERRA S CONTINUATION COVERAGE REQUIREMENTS Comparison to COBRA Scope of USERRA Coverage Election Procedures Coordinating USERRA, COBRA, and Military Coverage STATE LAWS State Military Family Leave Laws Military Leave Requirements in All 50 States CONCLUSION Notes APPENDIX A Sample Military/Reserve Leave Policy APPENDIX B State Military Leave Laws iv

5 Introduction With the continuing U.S. military presence in Iraq, Afghanistan, and other parts of the world, more and more employers are faced with the task of determining their obligations to employees who have served in the military, enlist in the military, are called to or serving active duty, or have a family member on active duty or injured in military service. As of January 2008, nearly 24,000 members of the National Guard and military reserves were deployed in Iraq or Afghanistan. Even more dramatically, more than 450,000 members of the National Guard and military reserves have been deployed to Iraq or Afghanistan since September Most of those servicemembers left behind a job and a family in order to fulfill their military obligations. For each employee that leaves a job in order to serve in the military, there is an employer obligated to comply with the many legal requirements and protections that apply to servicemembers and their families. The most notable of those requirements arise under the Uniformed Services Employment and Reemployment Rights Act (USERRA), which contains a wide range of provisions that protect employees who leave work for the purpose of serving in the military. For example, the USERRA: Guarantees employees up to five years of leave for their own military service; Requires employers to give them their old jobs back when they return from military service; Provides certain benefits protections during and upon returning from leave; and Prohibits discrimination against employees and job applicants on the basis of their past, current, or future military service. 2 However, the USERRA is far from the only law that is implicated when an employee takes leave related to her own or a family member s military service. The following laws are also implicated: The Family and Medical Leave Act (FMLA) guarantees eligible employees up to 26 weeks of leave when a family member is called to or injured in military service, provides certain benefits protections during and after leave, and prohibits discrimination against employees who assert or exercise their FMLA rights. Employees may also be eligible for FMLA leave after returning from military service. The Americans with Disabilities Act (ADA) prohibits discrimination against and requires reasonable accommodation of qualified employees and job applicants who are disabled, have a history of disability, or 1 More than 450,000 members of the National Guard and military reserves have been deployed to Iraq or Afghanistan since September 2001.

6 You & USERRA: An Employer s Guide to Military Leave are regarded as being disabled, including those who are disabled as a result of military service. The Consolidated Omnibus Budget Reconciliation Act (COBRA) guarantees employees the right to continue their employer-provided health coverage at their own expense for up to 36 months after specified events occur (such as the employee quitting or going on military leave). State military leave laws may entitle employees to military leave under different circumstances than under federal law. Because the main obligations that employers have to employees who serve in the military arise under the USERRA, we will discuss it first and in the most detail. In later sections, we will cover the other laws and discuss and compare how they interact with and differ from the USERRA. 2

7 USERRA 1 Protections The USERRA s requirements are more vast and complicated than many employers realize. The Veterans Employment and Training Service (VETS) which is part of the U.S. Department of Labor (DOL) is responsible for interpreting and enforcing the USERRA. In December 2005, VETS issued final regulations intended to guide employers on how to comply with the USERRA. 3 The regulations are structured in a question and answer format, with employees as the intended audience. They offer valuable (if excruciatingly detailed) guidance on how to comply with some of the law s more confusing aspects. The following sections are based in large part on those regulations. In general, the USERRA requires employers to give up to five years of unpaid leave to, reemploy, and maintain certain benefits for employees who are members of or enlist in one of the uniformed services. It also prohibits discrimination against members of the military and retaliation against them for exercising their USERRA rights. COVERED EMPLOYERS Unlike many other federal employment laws and regulations, the USERRA applies to virtually all employers, regardless of size. More specifically, it applies to: All public and private employers, regardless of how many or few employees they have; 4 All states, their political subdivisions, and U.S. territories; 5 The federal government (as a public employer); Local governments (as a public employer); Foreign employers that do business in and have a physical location or branch in the United States; 6 and U.S. employers that operate overseas. 7 Joint Employers Two (or more) employers that have joint control over an employee may both be responsible for USERRA compliance. 8 For example, both a temporary staffing agency and the employer where the temporary employees work are responsible for USERRA compliance. 3

8 In most joint employment situations, both employers are liable for any violations that may occur. You & USERRA: An Employer s Guide to Military Leave In most joint employment situations, both employers are liable for any violations that may occur. It is unclear from the DOL s regulations whether that is the case under the USERRA. In fact, the regulations appear to indicate that although an employee may be jointly employed by more than one employer, it is the employer that actually commits the violation who will be legally responsible for it. That would, however, contradict the application of joint employment principles in most other federal employment statutes. Employers who have any employees who are jointly employed through or by another employer should take precautions to ensure that the other employer is in full compliance with the USERRA in its dealings with the employee. It is also useful to have a clause in any contract under which the other employer agrees to assume responsibility and liability for USERRA violations. That may not protect you from a lawsuit by the employee, but it may provide you with a claim against the other employer if you are eventually held liable for its violations of the USERRA. Successors in Interest An employer may be liable for USERRA violations committed by a predecessor company if it meets the requirements of a successor in interest. That basically means that the employer bought out or took over the operations of another company or organization and there was sufficient continuity between the two businesses for them to be treated as one. The factors that are considered in making this determination focus on whether there was: Substantial continuity of business operations, facilities, machinery, equipment, and methods of production; Substantial continuity of employees; and Similarity of supervisors or managers and products or services. 9 As with joint employers, a successor company can try to limit its exposure to USERRA liability with contractual provisions under which the predecessor takes responsibility for any USERRA violations it may have committed. Again, this will not protect you from being sued or a judgment being entered against you. However, if that happens, you may then be able to sue the predecessor company to recover your losses. What if an employee is already out on military leave when the change in business operations occurred? At least one court has held that an employee in such case may have the right to be reinstated to a job at the successor company. 10 Individual Liability 4 The USERRA applies to all employers, a term that is defined to include any person who: 1) pays salary or wages for work performed, or 2) has control over employment opportunities.

9 USERRA Protections The definition of employer also includes individual employees to whom an employer has delegated the performance of employment-related responsibilities that aren t purely ministerial in nature. In other words, the USERRA allows employees to sue the individual within the employer s organization that took any actions in violation of the USERRA. That could potentially include individual supervisors and managers, human resources professionals, and any executives who were involved in making decisions such as whether to hire or fire an employee in violation of the USERRA. EMPLOYEE ELIGIBILITY In order to qualify for leave and reemployment under the USERRA, the employee must meet a variety of eligibility criteria. Some of those criteria must be met before the employee takes leave while others must be met when the employee returns from leave. Scope of Employment Relationship Most of the USERRA s provisions apply to all employees and former employees of the employer. Temporary, part-time, probationary, and seasonal employees are also protected under some provisions, but independent contractors are not. 11 Some of the USERRA s protections also apply to job applicants, assuming they meet the military service requirement. For example, the USERRA s discrimination and retaliation provisions apply to job applicants, while the leave and benefits protections do not. Type of Military Service The first eligibility requirement for employees is that they must serve or have served in the uniformed services. That includes a number of different types of active or inactive military training and service, including: Members of the Armed Forces (Army, Navy, Air Force, Marines, and Coast Guard); 12 Members of the National Guard pursuant to a federal statute (as opposed to a state authority); 13 Members of the military reserves; Some members of the ROTC; 14 Members of the commissioned corps of the Public Health Service; Students at any of the four military service academies; 15 and Other individuals who perform certain types of disaster relief 16 or any other category of persons that the president designates as a uniformed service in a time of war or national emergency. 17 It does not matter whether the employee s military service is or was performed: 1) on a voluntary or involuntary basis; or 2) in times of peace or war. 18 5

10 You & USERRA: An Employer s Guide to Military Leave Some unfortunate employers have made the mistake of assuming that the USERRA doesn t apply to employees who enlist in the military as opposed to the National Guard or reserves. That could not be further from the truth. An employee may decide to enlist in the Armed Forces today, take leave to fulfill her four-year commitment to whichever service she enlisted in, and be entitled to reinstatement upon her completion of that commitment. Form of Military Discharge. Some employees may not be eligible for the reemployment and benefits protections of the USERRA if they were court-martialed, absent without leave, or otherwise received a dishonorable or bad conduct discharge. 19 An employee s right to reemployment does not depend on her intent to return to work. 6 Employee Notice Requirements In order to activate their leave rights under the USERRA, employees must meet a number of procedural requirements. Notice of Leave. First, employees must provide the employer advance notice that they are going to be absent from work for military service. Such notice may be written or oral, does not need to be in any particular format, and may be given on the employee s behalf by an appropriate military officer. 20 It must be given as far in advance of the need for leave as is reasonable under the circumstances, preferably at least 30 days if feasible. 21 However, no specific time frame is absolutely required for how many days of notice will be considered reasonable. In addition, the employee doesn t have to give advance notice if doing so is impossible or unreasonable under the circumstances. 22 As a practical matter, the exceptions to the employee notice requirement are so broad that employers will rarely be able to claim that an employee forfeited his or her USERRA rights by failing to provide adequate notice. Note that the regulations specifically distinguish between giving an employer notice of the need for leave and asking for permission to take leave. Notice is required; permission is not. 23 Intent to Return from Leave. Nor is it required for an employee who is giving notice of the need for leave to assure the employer that she intends to return to work for the employer after her military commitments are satisfied. 24 An employee s right to reemployment does not depend on her intent to return to work. Even if an employee tells you she won t ever be coming back to work, you re still required to rehire her if she reapplies in a timely fashion when her military commitment is over and otherwise meets the requirements of the Act. In other words, employees can t waive their reemployment rights. More on the topic of USERRA waivers below on page 15. Notice When Military Service Is Concluded. In addition, when an employee s military service is concluded, he must provide the employer with notice that he intends to return to work. If he does not provide such notice, then he has no reemployment rights. The standards that apply to this type of notice are discussed in more detail on page 12.

11 USERRA Protections AMOUNT OF LEAVE REQUIRED In general, the USERRA requires employers to reemploy eligible employees who have missed up to five years of work (cumulatively) due to their performance of military service. 25 Service performed while working for a different employer does not count. 26 However, employers may be required to provide more than five years of leave in certain circumstances. Only absences that are necessitated by the employee s military service are counted toward the five-year limit. 27 If an employee takes a week or two to pack and otherwise get things in order before reporting for duty, that time may or may not exhaust any of his military leave, depending on whether the activities are necessitated by the military service. 28 The time frame during which an employee may apply for reemployment after being relieved of his military obligations is not counted toward the five-year limit. 29 That doesn t mean the employee must have been actually deployed in order for his time to be counted against the five-year limit. Nor does it matter that the employee uses some of his time for purposes other than military service, as long as his absence from work is necessitated by his service in the military. 30 For example, if an employee is required to report for training in a different geographical location than his place of employment, that training time counts under (and is protected by) the USERRA even if he uses his off-duty time for personal pursuits. There are also other exceptions to the five-year limit, such as: When an employee is required to complete an initial period of obligated service of more than five years; 31 When the employee through no fault of his own is unable to obtain orders releasing him from service before the expiration of the five years; Various other types of voluntary or involuntary active duty, including any period of captivity; 32 Time the employee spends in routine National Guard and military reserve training is not counted toward the five-year maximum; 33 Any time the employee spends in other types of training as deemed necessary by a proper military authority is not counted toward the five-year maximum. 34 In each of these situations, the employer is required to comply with the USERRA in spite of the fact that the employee was gone for more than five years. Challenges for Employers In many situations, figuring out how to calculate the amount of leave an employee has exhausted can be very tricky. As is clear from the above list of military service that isn t counted toward the five-year limit, you can t just 7

12 You & USERRA: An Employer s Guide to Military Leave count the number of days an employee is absent from work. You need to obtain detailed information about the character and duration of the employee s military service, including precise dates of when he reported to and was discharged from duty. Intermittent Leave. There are also special difficulties that arise for employers when an employee takes USERRA leave intermittently for example, for military training. For one thing, it can be confusing to determine whether training counts toward and keep a tally of how much of the five-year limit such an employee has exhausted over an extended period of time. In addition, the regulations specifically state that employees are not required to accommodate their employers concerns regarding the timing, frequency, or duration of uniformed service. 35 It can be burdensome for an employer to grant all the intermittent leave to which an employee is entitled without being able to place any limits on when or how often the leave is taken. Yet unlike some other federal employment statutes such as the ADA and FMLA employers have to provide military leave no matter how burdensome it may be to do so. 36 An employer s only recourse in that regard is to bring its concerns to the attention of the appropriate military authorities, who are required by law to provide assistance to employers in addressing these types of timing issues. 37 BENEFITS PROTECTIONS While an employee is absent from work due to military service, she is deemed to be on furlough or leave of absence. That is true even if the employer classified her employment as having been terminated. That basically means that the employer must maintain, protect, and in some cases contribute to various types of employee benefits as if the employee had not taken military leave. The USERRA s benefits protections do not, however, apply to: Employees who hold temporary jobs for which there is no reasonable expectation that they will continue indefinitely or even for a significant period of time; 38 or An employee who knowingly provides written notice of her intent not to return to work for the employer after her military service is completed. 39 In both of these situations, however, the employer may still be required to rehire the employee at the end of military service. Health Benefits 8 When an employee takes military leave, the employer is required to offer her the choice to continue health insurance coverage for a certain period of time. This requirement is very similar to the continuation coverage requirements that most employers must comply with under COBRA. This topic is discussed in more detail in Section 4.

13 USERRA Protections Reinstatement of Insurance. In addition, when an employee returns from military service, she will be entitled to health insurance benefits as if she had not taken any leave at all. That s true even if she didn t elect to continue her coverage under your plan when the military leave commenced. This means that you cannot, for example, impose a waiting period or preexisting condition exclusion for the employee or her dependents to be fully covered under your group health plan. But note that you are allowed to impose such conditions to coverage when an employee s illness or injury is incurred during or aggravated by the employee s military service. Retirement Plan Protections USERRA s pension protections apply to ERISA-covered pensions, as well as non-erisa plans such as state, governmental, and church plans. 40 USERRA defines a pension plan as any plan that provides retirement income to employees after the end of employment or beyond, including both defined benefit plans (e.g., traditional pension plans) and defined contribution plans (e.g., profit-sharing and 401(k) plans). In fact, the definition is broad enough to encompass nonqualified retirement plans (e.g., top-hat plans). Exactly what is required depends on whether you offer a defined benefit or defined contribution retirement plan. Regardless of the type of plan, the goal of USERRA is to give returning veterans the chance to have the same pension they would have had if they d remained continuously employed rather than taking leave for military service. 41 Employees who take military leave can t be required to forfeit any benefits they have accrued under your retirement plan or to requalify for participation in the plan upon returning from leave. In addition and this is important pension-reinstatement rules apply only when you rehire a veteran. 42 If the veteran doesn t return to work for you, you don t need to reinstate him in the plan, but he will still be entitled to all pension benefits that were vested before the military leave. Similarly, because pension rights do not mature until the employee returns to employment, no pension credit accrues if an employee dies in the performance of his military duties while on military leave. VETS has recommended that Congress amend the law to provide that if an employee dies on active duty while taking military leave, her estate will receive a pension credit for the period up until her date of death. Traditional Pension Plans. Defined benefit plans can be either noncontributory, which only the employer funds, or contributory, which both the employer and employee fund. With a noncontributory plan, you must treat the employee s time on military leave the same as if he d continued to work for your company, for purposes of accrual and vesting of benefits. You must make up any missed contributions to the employee s pension within 30 days after rehiring him. If the employee never returns to work for you, you don t have to make those missed contributions. Employees who take military leave can t be required to forfeit any benefits they have accrued under your retirement plan. 9

14 Returning veterans must be restored to the seniority that they would have attained with reasonable certainty. You & USERRA: An Employer s Guide to Military Leave In contributory defined benefit plans, the rehired employee must be allowed to make up missed contributions required to earn benefit accruals for the period of military service. If she doesn t make the payment, she doesn t receive the benefit accrual. Employees may take up to three times the length of the military leave, but no more than five years, to make up contributions. As the veteran makes up payments, you must make up the company s contributions. Defined Contribution Plans. With these plans, such as 401(k) plans, returning veterans may make up the income-deferral contributions they could have made if they d remained at work. They also decide which years the makeup contributions cover. As with contributory defined benefit plans, they may take up to three times the length of the military leave, but no more than five years, to pay. As they make up the deferrals, you must make the required matching contributions. If they don t make up the deferral, they don t receive a matching contribution. While on leave, the employee is considered to have been paid a salary equaling what he otherwise would have received from the employer during the period. If that amount is not reasonably certain, the employer may use the employee s average compensation during the 12-month period immediately preceding the period of military service. The limits on the amount that an employee may contribute to the plan that apply to the makeup contributions are those that were in effect when the contribution would have been made, rather than those in effect when the contribution is actually made. Profit-Sharing or Money-Purchase Pension Plans. Returning veterans are entitled to profit-sharing contributions missed when they were on leave. Employers must make the nonelective contributions that would have been made during the military service period. They don t have to make the contributions until the employee returns from leave, and may fund makeup contributions over the same time frame as contributory defined benefit and defined contribution plans. A rehired employee is not entitled to lost earnings on makeup contributions. Interest in Pension Plan Loans The USERRA includes special rules for suspending pension-plan loans during military leave. Loan repayments may be suspended for the length of the military leave, longer than the one-year suspension permitted under ordinary circumstances. The term of the loan also can be extended to include the length of the military leave. While the loan is suspended, interest still accrues but it s capped at six percent. The rehired veteran must repay the full loan amount, including interest accrued during the military service period, by the end of the maximum term for the loan plus the military service period. Other Benefits 10 Seniority-Based Benefits. Returning veterans must be restored to the seniority (along with all rights and benefits associated with it) that they would have attained with reasonable certainty if they d remained continuously

15 USERRA Protections employed. 43 Seniority benefits are those that employees gain because of passage of time. An example would be vacation leave, which typically increases the longer an employee remains with a company. Speaking of vacation leave, you may not force employees to apply accrued vacation to military leave. If the employee wants to do so, however, you must let him. Otherwise, you must restore all accrued vacation to employees returning to your company from military leave. 44 Nonseniority Benefits. Employees on military leave accrue nonseniority benefits to the same extent they would under your most generous leave policy. 45 So, for example, if employees who take FMLA leave are allowed to accrue vacation time, you must also let employees on military leave accrue it. Employees may waive their right to any nonseniority rights and benefits that your company provides by giving you written notice that they don t intend to return to work. They cannot, however, waive their rights to benefits that are based on seniority. 46 And remember that you must still rehire them if they reapply for employment after their military service is complete. Final Thoughts on Benefits Remember that the USERRA is remedial legislation and is interpreted broadly in order to provide employees with maximum benefits. Following the letter of the law may not be enough. Employers should be prepared to give employees the benefit of the doubt when it comes to maintaining and restoring benefits, and work with experienced benefits counsel to stay on the safe side. JOB REINSTATEMENT Eligible employees must be reemployed promptly after they have applied for reemployment, which means as soon as practicable under the circumstances. 47 Generally, they must be reinstated no more than two weeks after their application, although the time frame may be shorter or longer depending on the length of military service. When an employee returns from military duty, you may be faced with three primary questions: 1. What employees are eligible for reemployment? 2. What can you require of them before hiring them back? 3. What type of job are they entitled to? Eligibility for Reemployment Unlike the USERRA s discrimination and retaliation provisions, the requirement that employers reemploy returning servicemembers does not apply to employees who held a temporary job that the employee had no reasonable expectation would continue for a significant period of time (much less 11

16 Employers aren t required to reemploy employees if the employee s discharge from military service was less than honorable. 12 You & USERRA: An Employer s Guide to Military Leave indefinitely). 48 It may, however, apply to other temporary, part-time, probationary, and seasonal employees. Employers must reemploy eligible employees after their military service has ended if they: Reapply for employment within certain deadlines specified in the USERRA, and Have taken less than five years total of military leave (but remember that, as discussed above in the section Amount of Leave Required, certain types of absences and service do not apply toward this fiveyear limit). This basically means that even an employee who enlists in the Army and heads off to boot camp can come back and demand a job after completing his initial service commitment which is usually four years. Exceptions. Employers aren t required to reemploy employees in any of the following circumstances: If the employee s discharge from military service was less than honorable; If the employer s circumstances have so changed that reemployment is impossible or unreasonable (for example, if the employee s job was legally eliminated in a reduction in force); or In very limited circumstances, if the employee doesn t comply with the Act s notice requirements. Notice and Application for Reemployment Returning servicemembers have to follow specific timetables and procedures when they report back to work. First and foremost, they must give you notice that they intend to return to work. The amount of notice required depends on how long they were absent due to military service. 49 Up to 30 days absent. For absences of less than 31 days, the employee may simply report to work, if he does so promptly as defined by the regulations. 50 Failure to report to work within the time frames laid out in the regulations may be excused if the employee was unable to do so through no fault of his own. 31 to 180 days absent. If the employee s leave was between 31 and 180 days, the employee must apply for reemployment within 14 days after completion of military service. 51 If the employee cannot do so through no fault of his own, he must submit the application no later than the next full calendar day after it becomes possible to do so. 181 or more days absent. For absences of more than 180 days, the employee has 90 days to apply for reemployment. 52 There is no excuse allowed in the regulations for failing to meet this deadline. Each of the above deadlines may also be extended if the employee is recovering from a service-related illness or injury. 53 Failure to Comply with Deadlines. It is extremely important to note that an employee s failure to comply with the above deadlines may subject

17 USERRA Protections him to discipline under your regular policies and procedures, but does not necessarily entitle you to refuse to rehire him. 54 Documentation Required. Unless it does not exist or is not readily available, you may require the employee to provide documentation that: 1) the reemployment application is timely, 2) the employee has not exceeded the five-year limit for USERRA leave, and 3) the employee s discharge from military service was not of the type that would disqualify him from reemployment. 55 If the documentation is not immediately available, the employer must rehire the employee, but may terminate that employment if subsequently obtained documentation shows that the employee was ineligible for reemployment (such as if he was dishonorably discharged from the military). 56 Specific Job Requirements The trickiest issue for many employers is determining what job the employee is entitled to, especially if she has been gone for a substantial length of time. In general, employees must be reinstated not just to the position they had before taking leave, but to the position they would have held if they hadn t taken leave. This is commonly referred to as the escalator position. More specifically, the employee must be returned to a job that reflects with reasonable certainty the pay, benefits, seniority, and other perks that he would have attained if not for the period of military service. 57 If the employee missed an opportunity for a promotion to a position for which a skills test or some other form of examination was required, the employer must first place him in that position then give him a reasonable amount of time to pass the test or examination. 58 Exceptions to Escalator Principle. There are some exceptions to the escalator principle, depending on whether the employee s leave lasts more or less than 90 days, whether the employee is qualified to perform the essential tasks of that position, and whether a service-related disability has rendered him unable to perform the essential tasks of the position. 59 The requirements for disabled employees are discussed in more depth in Section 3. The following reinstatement options apply to an employee whose military service lasted less than 91 days (and who does not suffer from a servicerelated disability): 60 The employee must be reinstated to the escalator position unless he is not qualified to perform the essential tasks of that position despite the employer s reasonable efforts to help him become qualified. Such reasonable efforts typically entail providing training or retraining for the position at no cost to the employee. If after reasonable efforts by the employer, the employee is still not qualified to perform the duties of the escalator position, he must be reemployed in the position he held before taking leave. The employer must make reasonable efforts to help him become qualified for that position. If the employee still is not qualified to perform the duties of the position he held before taking leave, he may be reemployed in any 13

18 It is possible for the employee to be reinstated to a lower position or even be laid off or fired. You & USERRA: An Employer s Guide to Military Leave other position that is the nearest approximation of the escalator position or, if he cannot become qualified for that position with reasonable help from the employer, the nearest approximation of the original position. The employer may decline to reemploy or terminate the employee only if he cannot become qualified to perform any of the above positions after reasonable efforts by the employer. 61 The following reinstatement options apply to an employee whose military service lasted 91 days or more (and who does not suffer from a servicerelated disability): 62 The employee may be reinstated to either the escalator position or to a position of like seniority, status, or pay, but only if he is or can become qualified to perform the duties of the position with reasonable help from the employer. If the employee is not qualified to perform the duties of either of those positions after reasonable efforts by the employer, the employer has the option of placing him in his original position or a position of like seniority, status, or pay. If in spite of the employer s reasonable efforts the employee still is not qualified to perform the duties of either his original position or a like position, he must be reinstated in any other position that is the nearest approximation of the escalator position or, if he is not capable of performing the duties of that job, the nearest approximation of the original position. The employer may decline to reemploy or terminate the employee only if he cannot become qualified to perform any of the above positions after reasonable efforts by the employer. 63 Reemployment Position for Disabled Employees. In addition, if the employee becomes disabled during military service, the employer must provide reasonable accommodations to allow him to perform the escalator position, an equivalent position, or the job that most closely approximates that equivalent position. 64 For a more detailed discussion of a disabled employee s rights under the USERRA, see Section 3. Adverse Application of Escalator Position. Reinstating an employee to the escalator position does not always mean promoting her. In fact, it is possible for the employee to be reinstated to a lower position or even be laid off or fired. In other words, you don t have to return an employee to a position that she would not have had if she had been continuously employed. 65 Other Job Protections 14 The USERRA prohibits employers from terminating employees because of their membership in the military or performance of military service. More specifically, employers are prohibited from firing an employee who has returned from military leave for any reason other than for cause for a

19 USERRA Protections given period of time after their return to work. The duration of this no termination requirement depends on the length of the employee s leave: If the employee s most recent period of military service was more than 30 days but less than 181 days, she can be discharged only for cause for a period of 180 calendar days after returning to work. If the employee s period of military service was more than 180 days, she can be discharged only for cause for a full year after returning to work. 66 In general, terminating an employee for cause means that: 1) the employee committed some sort of misconduct; or 2) the employee s position was eliminated or the employee was laid off based on the application of legitimate nondiscriminatory criteria. 67 No Waiver of Rights. The USERRA also provides that no contract may limit the Act s protections. In other words, if you terminate an employee who is protected by the USERRA, you can t require him to waive any rights he may have under the USERRA. If you require terminated employees to execute a general waiver for example, in return for a severance package those who are protected by the USERRA will still be able to sue you for any alleged violations of that law. 68 Based on court decisions that have been issued under other federal employment laws such as the Age Discrimination in Employment Act (ADEA), the employee will more than likely be able to keep the severance you paid in spite of the fact that the waiver was ineffective. DISCRIMINATION AND RETALIATION When thinking about USERRA compliance, employers may understandably focus on the military leave issues. However, it is important not to overlook the fact that the USERRA also prohibits discrimination on the basis of military service and retaliation for asserting USERRA rights. 69 These provisions are particularly important because they apply to every step of the employment relationship, from hiring to firing. Discrimination An employee who is denied military leave, reemployment, or any of the other protections relating to leave is not required to prove that the denial was based on discrimination. An employer s failure to comply with those provisions is enough in itself without any discriminatory intent to make it liable. On the other hand, the USERRA prohibits employers from discriminating against employees or job applicants on the basis of military service in ways that have nothing to do with leave. That includes not only employees past military service and current or pending obligations, but also their intention to join the uniformed services. It is illegal to refuse to hire, reemploy (including reemployment in other situations than after USERRA leave), retain, promote, or deny any benefit of employment on the basis of military service

20 You & USERRA: An Employer s Guide to Military Leave The discrimination provision applies to temporary employees, even if they don t have any reasonable expectation that the job will continue for a significant period of time. (Remember that the Act s leave, benefits, and reemployment provisions do not apply to such temporary employees.) It also applies to job applicants and any employee who suffers an adverse employment action if their military service was a motivating factor in the employer s decision. Even if there are other legitimate factors that led to the decision, the employer will be liable. Example Mayhem Productions is planning a reduction in force. One employee whose job is on the line is Marsha, a member of the National Guard who will be called to duty in Iraq within six months. Mayhem has to decide whether to eliminate her job or that of another employee in her department, Cindy. Both are good employees, but Cindy is a little more versatile and capable of taking on the new tasks and higher workload that will be required after the reduction in force. On the other hand, Marsha is paid less and Mayhem is trying to keep the lower paid employees whenever possible. Because the decision is basically a draw, Mayhem decides to lay off Marsha because it will have to replace her in a few months anyway (when she leaves for Iraq). That decision is illegal under the USERRA. If, on the other hand, Mayhem would have made the same decision even without Marsha s future service obligation, then that s not discrimination. Retaliation 16 The USERRA s retaliation provision protects an even broader class of persons than the discrimination provision. In general, it prohibits employers from retaliating against any individual whether they are an employee or not and whether they are a civilian or a veteran for: 1) exercising their USERRA rights; or 2) assisting in an investigation of alleged USERRA violations. 71 As with the discrimination provision, this provision also applies to temporary employees, whether they have a reason to expect continued employment or not. One area that employers should keep a particular eye out for is when an employee is repeatedly absent due to National Guard training and other military duties. More than one employer has learned the hard way that situations like that can breed resentment in coworkers and even supervisors. 72 Supervisors who vent about the inconvenience of losing a worker to the military may have their words used against them. Employers need to make sure that such resentment does not cross the line into retaliation. So training your supervisors is essential. Make sure they understand that the USERRA has teeth... including the fact that they could be held individually liable for any violations.

21 USERRA Protections POLICIES AND PROCEDURES If you don t have a policy addressing an employee s rights when he leaves your company to join or serve in the military, then now is the time to get one. The USERRA is a complicated statute, but any good policy should address at least the following issues: Protected leave The USERRA protects the jobs and benefits of employees who are called to active duty, as well as those who need occasional leave to comply with their military obligations, such as weekend or week-long training sessions. Newly enlisted employees The USERRA also requires you to reemploy those who quit their job to voluntarily enlist in the military (for up to five years). Rights during leave When an employee is on protected military leave, he retains a variety of rights regarding his employee benefits. You need policies and procedures to make sure those rights are observed and protected. Employees rights when they return When an employee returns from military duty, you must take her back if she reapplies for a job within certain deadlines. You need policies to make sure that happens and the proper procedures are observed. Required notices You are required to give employees notice of their rights under the USERRA. In return, they are required to give you certain notices when they take and return from military leave. Discrimination and retaliation Your USERRA policy should specifically state that you do not discriminate against employees or job applicants because of their past or current military service or future military obligations. State law You should also include provisions regarding any military leave requirements imposed by your state law. We have included a sample military leave policy as Appendix A. Required Posters The Veterans Benefits Improvement Act, passed in December 2004, requires employers to inform employees who are called into military service of their rights and benefits under the USERRA. It requires employers to either place an informative poster where you customarily place such notices for employees or provide the notice in other ways, such as by handing out, mailing, or ing it to employees. The DOL s website provides two separate posters that private and state employers 73 and federal executive agencies 74 may use to satisfy this requirement. 17

22 You & USERRA: An Employer s Guide to Military Leave Employees are not required to file a complaint with the DOL before suing their employer for USERRA violations. ENFORCEMENT AND LITIGATION VETS is responsible for interpreting and enforcing the USERRA. 75 That includes providing assistance to employees and employers alike with compliance matters. VETS is also responsible for investigating USERRA complaints filed by employees with the DOL. 76 It received 1,357 formal USERRA complaints in 2006, the most recent year for which charge statistics are available. 77 The actual number of complaints or inquiries, however, is probably much higher, for a couple of reasons: The DOL does not keep track of the number of informal complaints or inquiries it receives; and Some employees choose to bypass the VETS process altogether and sue their employer directly for USERRA violations. In fact, according to one source, more than 16,000 informal and formal USERRA complaints were filed with VETS between fiscal years 2004 and If it determines after investigation that an employer has violated the USERRA, VETS is required to make reasonable efforts to obtain voluntary compliance. If such efforts are unsuccessful, the next step in the process is for the complaint to be referred to either the Attorney General (for private and state employers) or the Office of Special Counsel (for federal executive agencies). However, unlike many other federal employment laws, employees are not required to file a complaint with the DOL before suing their employer for USERRA violations. They may choose to sue the employer in federal court without the participation or knowledge of the DOL. In addition, even if the employee does initially pursue a complaint with VETS, he may later decide to file a private lawsuit. That is true even if VETS finds no merit in the complaint or the Attorney General declines to pursue litigation on the employee s behalf. Damages, Penalties, and Other Relief Employers that are found to have violated the Act may be ordered to reinstate the employee and pay: Lost wages; Lost benefits (or restore them); An additional amount equal to the amount of lost wages and benefits as liquidated damages for willful violations; and The employee s reasonable attorney fees, expert witness fees, and other costs of litigation Statute of Limitations Although the USERRA does not have a statute of limitations, at least one court has applied the four-year federal statute of limitations to the USERRA. 79 The VETS has suggested that Congress amend the USERRA to clarify that there is no statute of limitations for USERRA violations.

23 About the Author Employment law attorney Julie Athey has written numerous pub li cations for human resources professionals, including Overtime Revisited: The DOL s Final Regulations and How to Fire Employees Without Getting Burned. She graduated with honors from the University of Tulsa College of Law, where she was an editor of the Energy Law Journal. She also obtained her undergraduate degree in English, cum laude, from the University of Tulsa. Her excellent legal and editorial skills have made her one of the most popular authors of M. Lee Smith Publishers LLC resources. 65

24 About the Publisher Since 1975, M. Lee Smith Publishers LLC has been committed to providing you with solutions to your employment law questions. In addition to the HR Executive Special Reports, we publish your state s Employment Law Letter, environmental compliance and workers comp newsletters, supervisor training products, and much more. If you would like more information regarding our other publications, please call our toll-free customer service hot line. Or visit our web sites that showcase all the products we offer. Our 100-plus newsletters, books, and directories alert readers to new laws, regulations, and court cases on the state level, including easy-tounderstand information on federal laws, all reported with your state s local laws and regulations in mind. You learn quickly of changes taking place affecting your operation. Like the HR Executive Special Reports, all of our publications feature our no-risk guarantee. If you re dissatisfied, for any reason, you are entitled to a complete refund. You have no risk. Customer Service: (800) custserv@mleesmith.com Web Sites: