Each year, thousands of Americans protect and serve our country. Many of these individuals serve on a non-career basis while retaining civilian employment. Under the Uniformed Services Employment and Reemployment Rights Act (USERRA), as well as several state laws, employers have an obligation to provide job-protected leave for employees serving in the uniformed services.
The following are some points to consider for administering military leave in light of USERRA:
- Post notice of rights. Employers are required to provide a notice that identifies employee rights, obligations, and benefits under USERRA. This requirement may be met in several ways; however, it is recommended employers post the notice where other employee notices are customarily posted, such as employee break areas.
- Develop a policy. While there is no requirement to have a written policy on military leave, it is a best practice to implement one. In developing the policy, consider federal and state law implications as well as employee and employer rights and obligations. Specifically, a policy on military service should address employee requirements pertaining to providing advance notice as well as employee rights regarding benefits continuation, reemployment, and seniority.
- Advance notice. Under USERRA, employees must provide advance notice of military service unless giving notice is impossible, unreasonable, or precluded by military necessity. Many employers ask employees to give as much notice as possible under the circumstances, while understanding that there may be some cases when notice is impossible. While notice is required when practical, it's important to note that an eligible employee does not need the employer's permission to take leave under USERRA.
- Pay. While USERRA does not require military leave to be paid, some employers choose to pay employees while they are on military leave. Among employers that do, a common practice is pay the difference between the employee's regular salary and military pay (known as differential pay). An employer may not require an employee to use vacation or other paid leave during military leave, but the employee has the right to choose to make such a substitution.
- Federal tax credits. For small employers (those with fewer than 50 employees), there is a federal tax credit for providing differential wage payments to employees on active duty. The amount of the tax credit is equal to 20 percent of the differential wage payments made to qualified employees during the taxable year, up to a maximum of $4,000 per qualified employee per tax year (see IRS Notice 2010-15).
- Health insurance continuation. Employees on military leave, as well as their covered dependents, may be eligible for health insurance continuation (i.e., COBRA) if military service lasts for a period of 31 days or more. If elected, the employee is responsible for the full premium and the employer is permitted to charge a 2 percent administrative fee. Upon returning from military leave, employees who did not elect COBRA coverage must be reinstated to the group health plan without any waiting period. For military service of fewer than 31 days, COBRA coverage does not apply and the employee is only required to pay his or her normal share of the premium.
- Staffing in employee's absence. Employers should consider the impact of an employee's absence due to military service. For critical positions or periods of high business demand, it may be necessary to bring on temporary workers, or even hire a full-time staff member that can be absorbed when the military service member is reemployed.
- Duration of reemployment rights. Under USERRA, employees may take a cumulative of five years of leave from any single employer and still retain his or her reemployment rights. There are important exceptions to the five-year limit, including initial enlistments lasting more than five years, periodic National Guard and Reserve training duty, and involuntary active duty extensions and recalls, especially during a national emergency.
- Exceptions to reemployment. Reemployment is required after "satisfactory completion" of service; this does not include dishonorable or "bad conduct" discharges. Employers can deny reinstatement to qualified service personnel only if they can show undue hardship (e.g., conditions have changed so as to make reemployment impossible or unreasonable).
- Reemployment process. Employees who return from military service must be reemployed promptly (within two weeks), absent unusual circumstances. To be eligible for reemployment, the employee must report to the employer within a specified period depending on the length of his or her military service. For service of less than 31 days, the employee must return at the beginning of the next regularly scheduled work period on the first full day after release from service, taking into account safe travel home plus an eight-hour rest period. For service of more than 30 days but less than 181 days, the employee must submit an application for reemployment within 14 days of release from service. For service of more than 180 days, an application for reemployment must be submitted within 90 days of release from service.
- Reporting procedures. Employers should establish procedures for how employees are to apply for reemployment and report to work following military service (e.g., contact their direct supervisor or an HR representative). Note that USERRA permits the employee to apply for reemployment verbally or in writing. When returning from service lasting 90 days or less, the employee must generally be placed into the position he or she would have held if he or she remained continuously employed (known as the escalator principle). Employees who return from service lasting more than 90 days are entitled to reemployment to the escalator position, or to a position of equivalent seniority, status, and pay.
- Seniority rights and benefits. Upon reemployment, employees are entitled to the seniority and other rights and benefits determined by seniority that they had on the date military service started plus the additional seniority, rights and benefits that they would have attained had they remained continuously employed. Take, for example, an employer that provides two weeks of vacation to employees employed for less than five years and three weeks of vacation to those employed for five or more years. This may be considered a seniority-based benefit. Therefore, if an employee is employed for four years and is on military leave for one year, the employee is entitled to accumulate three weeks of vacation upon returning.
- Pay raises. Employees returning from military leave are entitled to all general pay raises that they would have received with reasonable certainty had they not been on military leave. If, for example, "merit" increases have been consistently awarded to all employees, then the raises may be considered to be seniority based, and the returning employee may be entitled to the raise as well.
- Show support. Ensuring compliance with USERRA and maintaining pay and benefits during military leave are just a few ways to demonstrate support for those in the uniformed services. Other ways to show support include sending care packages; maintaining contact with the employee and his or her family to offer assistance; offering flexible schedules; establishing relationships with employees' commanding officers; donating phone cards; providing employee assistance programs; and re-acclimating employees who return from leave.
- State and local laws. Many states have their own military leave laws. While some are similar to USERRA, others cover leave for emergency missions, leave to care for a family member who was injured while on active duty, as well as leave for employees whose spouses are pending deployment or are on leave from deployment. Check your state requirements to ensure compliance.
With so many Americans in the uniformed services, it's important for employers to be prepared to handle absences resulting from military service, including requirements pertaining to advance notice, benefits continuation, and reemployment.
Trish Dougherty has greater than 25 years of successful leadership experience and is Senior Vice President & Principal for The Weston Group located in Sioux Falls, SD. Dougherty has a background in executive human resource management and is also a licensed Registered Nurse. Dougherty also served as an Officer in the United States Army Nurse Corps for 10 years. Dougherty travels and speaks nationally to assist small to medium size organizations with organizational effectiveness involving their most important asset – their employees. Trish can be reached at Trish@TheWestonGroup.com or 605-275-4747. www.TheWestonGroup.com.
