U.S. Department of Labor Publishes Long-Awaited Regulations Interpreting The Uniformed Services Employment And Reemployment Rights Act of 1994

On December 19, 2005, the U.S. Department of Labor (DOL) published new regulations to explain and clarify the Uniformed Services Employment and Reemployment Rights Act (USERRA). The new regulations – the first to interpret USERRA since its passage in 1994 – have been in the works for two years and became effective on January 18, 2006. A complete copy of the regulations (20 C.F.R. Part 1002) may be accessed at www.dol.gov/vets/regs/fedreg/final.


USERRA applies to all private employers as well as state and local governments and provides employment and re-employment rights for employees who leave their civilian jobs (whether voluntarily or involuntarily) to serve in the uniformed services, including the U.S. reserve forces and state National Guards. It also provides certain protections regarding health care, pension, and other benefits, and it requires employers to restore returning veterans to the seniority level they would have earned had they never left their jobs to perform military service. USERRA also prohibits employers from discriminating against employees or applicants for employment on the basis of their military status or military obligations.

The DOL’s publication of a comprehensive set of USERRA regulations was a response to the impact of military reserve activations during recent years – including the largest group of mobilized National Guard and Reserve service members since World War II. In fact, since September 11, 2001, close to 530,000 citizen-soldiers have been mobilized to support the War on Terrorism and military operations in Iraq and Afghanistan. Over 390,000 of those service members have been demobilized – most returning to the workplaces they left behind – and over 1,000 veterans have returned with disabilities from combat injuries or other service-connected injuries.

The New Regulations

The new regulations are written in plain language, and are set forth in question-and-answer format. No new legal requirements have been added, but the regulations attempt to clarify existing rights and responsibilities of both the returning veteran and the employer. In its preamble, the DOL notes that the regulations are based on the legislative history and the federal case law that has developed over the past 65 years since the first of USERRA’s predecessor statutes was enacted in 1940. For those practicing in this area, the regulations provide much needed guidance in some areas that have never been clearly defined in the courts.

The DOL makes it clear that it has liberally construed the law in order to maximize the protections provided to returning veterans. The regulation preamble quotes an often cited admonition by the U.S. Supreme Court in a 1946 case: “This legislation is to be liberally construed for the benefit of those who left private life to serve their country in its hour of great need…. [N]o practice of employers or agreements between employers and unions can cut down the service adjustment benefits which Congress has secured the veteran under the Act.”

Because the new regulations occupy almost 100 pages in the Federal Register, it is not possible to cover all of the pertinent regulations in this Advisory. Accordingly, the remainder of this advisory is devoted to highlighting some of the most noteworthy provisions in the regulations.

Escalator Provision Remains Central Theme Of USERRA

The DOL’s regulations emphasize USERRA’s “escalator principle” – a term borrowed from a U.S. Supreme Court case interpreting USERRA’s predecessor statute. Under this principle, a returning veteran is entitled to be reemployed in the “escalator position” – the position (with commensurate seniority, status, and pay) that he or she “would have attained with reasonable certainty” but for the intervening absence due to military service. For example, if an employer awards promotions based on seniority, and the returning veteran would have received a promotion had he not left for military service, then he is entitled to that promotion upon his return (or a comparable promotion if his service was over 90 days). The DOL also made clear that this escalator principle may require an employer to “bump” the replacement employee – or perhaps even terminate that employee – in order to accommodate the returning veteran.

At the same time, the regulations acknowledge that a returning veteran may return to a lower spot on the “escalator” if changes in the workplace during his absence would have resulted in such a consequence. For example, if a veteran’s seniority would have resulted in him being laid off during his service period, he would be reinstated to this lay-off status. Likewise, a veteran need not be reemployed if an intervening reduction in force would have included the veteran.

Employee’s Notice Obligations

The regulations generally track the statutory language regarding an employee’s notice obligations. One provision, however, is worth noting. The regulations make it clear that an employee need not decide, before he leaves to attend military service, whether he intends to return to work with the same employer at the end of the service period. In fact, even if an employee tells his employer that he does not intend to return, the employee still does not forfeit his right to reemployment under USERRA. The bottom line is that, no matter what an employee may say on his or her way out the door, the employer must be prepared to accommodate his or her return to the workforce – even if such return is five years later (the maximum cumulative period of service in which USERRA rights are retained).

Prompt Reemployment Within Two Weeks

USERRA requires an employer to “promptly” re-employ an eligible returning veteran. Courts have wrestled with the term “promptly.” The new regulations offer some clarification, providing that “prompt reemployment” means “as soon as practicable under the circumstances” and that, “absent unusual circumstances,” a veteran must be reemployed within two weeks of submitting an application for reemployment.

Burden Of Proof For Claims Of Discrimination

Expanding on the statutory anti-discrimination provision, the regulations outline a burden of proof scheme for proving discrimination under USERRA. A veteran alleging discrimination must first prove that his or her military status was “one of the reasons that the employer took action against him or her.” The burden then shifts to the employer to prove it “would have taken the action anyway,” regardless of the employee’s military status. Ultimately, the complaining veteran must show that the employer would not have taken the action at issue “but for” his or her military status. The new regulations also address statutory defenses available to employers (such as the often misunderstood “undue hardship” defense).

Healthcare Benefits

USERRA provides that service members who leave work to perform military service may elect to continue their existing employer-based health plan coverage for up to 24 months while in the military. USERRA’s healthcare provisions are similar, but not identical, to those of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) (e.g., USERRA is not dependent on the size of the employer’s workforce). The new regulations provide greater clarity to provisions regarding health care coverage during service and restoration upon return from service, including new guidance on how employees may select and pay for continued coverage during service periods, the permissible cost of such coverage, health plan administrator’s obligations, and the types of health plans covered. In particular, the regulations emphasize that a returning veteran and his or her dependents must be reinstated in an employer-provided health plan without any waiting period upon return from a service period.

Accommodating Employees With Service Connected Disabilities

Unfortunately, it has become an all too often occurrence for returning veterans to return to the workplace with service-connected disabilities resulting from combat injuries or service-related accidents. The DOL regulations attempt to clarify the rules for accommodating these veterans. Like the Americans with Disabilities Act (ADA), USERRA requires employers to make reasonable accommodation efforts. While ADA only requires employment of individuals who are qualified to perform the “essential functions” of a position, USERRA actually goes further and requires the employer to train or re-train the disabled veteran so that he may become qualified for the position or another position of like seniority, status, and pay. If the disabled veteran cannot be accommodated by the employer’s reasonable efforts, the employer must reemploy the veteran in some other position he is qualified to perform (after reasonable training efforts) and which is the “nearest approximation” (in terms of seniority, status, and pay) of the position to which he would otherwise be entitled. A lengthy preamble to the regulation describes the types of reasonable accommodations anticipated by the statute.

Statute of Limitations

USERRA does not contain a statute of limitations provision for initiating enforcement proceedings, and it specifically prohibits application of state statutes of limitations. The regulations do not resolve the issue, but do advise potential claimants that some jurisdictions will apply the four-year federal catchall limitations period.

This article was adapted from the December 20, 2005 Labor and Employment Advisory published by Alston & Bird, LLP. Alston & Bird is a 700-attorney law firm with offices in many states across the country. Alston & Bird regularly publishes the Labor and Employment Advisory, which focuses on recent development of interest to labor practitioners. Subscriptions to the Advisory can be obtained at http://www.alston.com/index.cfm?fuseaction=ArtsAndAds.

This article appears in the February 2006 issue