A Primer On USERRA

As the Iraq war continues, new service orders are being issued, existing commitments are being extended, and veterans are returning to work. These actions can cause problems in the workplace for employers. All employers have obligations to military service personnel, but we’ve found that few employers fully understand those obligations. This article outlines the law governing service members’ employment-related rights under the Uniformed Services Employment and Reemployment Rights Act (USERRA).

USERRA was primarily designed to clarify the re-employment rights of returning members of the National Guard, Reserves, and other Uniformed Services. USERRA requires employers to provide job-protected leave and certain benefits.

The Big Picture

Upon completion of an employee’s military leave, USERRA requires prompt reinstatement of the employee, even if it means termination of a replacement worker. During the leave itself, employers must pay the company’s share of health insurance premiums during leaves of 30 days or less, and provide COBRA continuation for longer commitments.

Regarding pensions, USERRA requires that the period of service be counted for eligibility, vesting and benefit accrual purposes. Upon return from service, the employer must provide employees with the benefit they would have had under the plan if they had been continuously employed. For 401(k) plans where employees are required to make employee contributions to receive an employer matching contribution, the returning veterans have up to three times their total service period (not to exceed five years) after returning to employment to make up missed employee contributions; an employer need only make matching contributions to the extent that the reemployed service member makes up employee contributions.

Returning service members must be re-employed in the job they would have held had they remained continuously employed or to a position of equivalent seniority, status, and pay. Additionally, employers must re-train returning service members to refresh or upgrade their skills so that they may qualify for re-employment and accommodate any service-connected disabilities.

Limits On Reinstatement

Re-employment is not required if an employer’s circumstances changed so much that it would be impossible or unreasonable to re-employ the returning service member. A reduction in force that would have included the employee is one example. You are also excused from accommodating returning service members with service-connected disabilities if doing so would impose an “undue hardship.” Re-employment would also be excused if the employment from which the person left was for a temporary, non-recurring period and there was no reasonable expectation that such employment would continue.

A service member may be absent for military duty up to five years if the employee has been ordered to or retained on active duty due to a war or national emergency. And you must give employees leave “necessitated” by service, which includes time needed to arrive at the site of service and to return home.

Rights After Returning

One of the most important aspects of the law, and perhaps one of the least widely known is the protection extended to returning service members. Once re-employed, certain returning service members may not be discharged, except “for cause.” For service members whose leave exceeded 180 days, this protection lasts for one year following their return. For service members whose leave lasted 31 to 180 days, this protection lasts six months. This “just cause” protection is not available to service members who take leave for 30 days or less, but they do remain protected from discrimination due to military service.

Summing It Up

To ensure compliance with the law, remind your supervisors of their obligations under this law, and grant leave upon demonstration of a military commitment. You should also ensure that benefits and insurance continuation are extended in compliance with the law. Make it clear to those individuals who replace a departing employee that a returning service member may have priority to their job.
Review forms, policies and procedures that apply to service members and revise EEO statements to include reservists and National Guard members. Better still, refer to this group by the broader term “uniformed service members.” Lastly, you should have your benefit plans and documents reviewed for compliance with USERRA.

With the war in Iraq continuing, employers should pro-actively identify service member issues before they adversely affect their business. If you need advice reviewing your policies and procedures to ensure compliance let your F&P attorney know.

This article originally appeared in the November, 2007 issue of Labor Letter, published by Fisher & Phillips LLP, a nationally-recognized law firm that limits its practice to representing management in labor and employment matters. James Holland is a partner in the firm’s Kansas City, MO office, He can be reached at jholland@laborlawyers.com or 816.842.8770.

This article appears in the January 2008 issue