Supporting Our Troops: New Regulations Define Rights of Re-employment for Military Reservists Called to Active Duty
 

Military reservists and National Guard members have been called to active duty by the tens of thousands, and thousands more are expected to be called. Employers will soon have detailed guidance about their obligations to employees on leave for military service. The Department of Labor (DOL), through its Veterans' Employment and Training Service, has issued new proposed regulations designed to address the most frequent concerns about military leave under the Uniformed Services Employment and Re-employment Rights Act of 1994, 38 U.S.C. §§ 4301-4333, ("USERRA"). Currently, there are no regulations interpreting USERRA. The public comment period for the proposed regulations closed in November 2004 with final regulations expected early in 2005. Additionally, beginning on March 10, 2005, employers will be required to post a new USERRA poster informing employees of their rights under the Act. The poster will be available from the DOL website at http://www.dol.gov/vets/.

This article provides a brief overview of USERRA. The new proposed regulations (to be codified at 20 C.F.R. part 1002) will implement many of the USERRA principles explained below.
 

Who Is Covered?

All employers, regardless of size, are covered by the USERRA. Foreign work sites are also covered, if the employing entity is organized in the U.S. or is controlled by an entity that is organized in the United States. USERRA also covers virtually all employees, including part-time, temporary, seasonal, and probationary employees.

Employees need only show that they are performing military service as members of the "uniformed services," which includes the Army, Navy, Marine Corps., Air Force, Coast Guard, the commissioned corps of the Public Health Service, as well as the reserve components of each of these branches, the Army National Guard and Air National Guard performing services under Federal authority. National Guard service under the authority of State law is not protected by USERRA. In addition, certain categories of persons designated by the President in time of war or national emergency and disaster response, and workers appointed by the National Disaster Medical System are also covered. "Periods of service" in the uniformed services includes periods of time for which military members are absent for military fitness exams and authorized funeral honors duties.
 

What Rights are Protected?

USERRA provides three primary protections for employees called to military service: (1) benefit protection and continuation while on duty, (2) a right of re-employment or prompt reinstatement upon return from duty, and (3) protection from discrimination and retaliation based on military service. Additionally, an often overlooked USERRA provision involves protection against discharge which means employers may not terminate returning service members, except for cause, for up to one year (or less, depending on the length of service) after they return to work.
 

Prohibition Against Discrimination and Retaliation

USERRA contains prohibitions against both discrimination and retaliation. The new regulations provide that an employer may not deny initial employment,
re-employment, retention in employment, promotion, or any benefit of employment to an applicant or employee on the basis of membership, application for membership, performance of service, application for service, or obligation for service in the uniformed services. Retaliation is also prohibited against any person who has taken an action to enforce USERRA protections, testified or otherwise made a statement in or in connection with a proceeding under USERRA, assisted or participated in a USERRA investigation, or, exercised a right provided for by USERRA.

The discrimination and retaliation prohibitions apply to all employers (including hiring halls and potential employers) and all employment positions, including those that are for a brief, non-recurrent period, and for which there is no reasonable expectation that the employment position will continue indefinitely or for a significant period.

A significant change under the new regulations is a clarification of the burden of proof in cases of discrimination or retaliation. Employees will have the burden of proving discrimination or retaliation by establishing that membership in the uniformed services was a "motivating factor" in the employer's discriminatory actions or conduct.
 

Notice to the Employer

Employees leaving their jobs to report to duty are required to give advance notice of pending military service to employers, unless giving notice is prevented by military necessity, or is otherwise impossible or unreasonable under the circumstances. The notice can be written or oral. There is no specific time period for providing notice, only that the notice should be provided as far in advance as is reasonable under the circumstances. Employees are not required to ask for or receive permission to leave from the employer.

Employees departing for military service may defer their decision to return to work until after their service ends, and employers may not pressure employees for assurances about job intentions.
 

Continuation of Benefits

Employees on military leave are considered to be on a leave of absence from their employer and are entitled to non-seniority rights and a continuation of certain benefits provided to other similarly situated employees on leave.

With regard to health plan coverage benefits, the employer's obligation is determined by the length of the employee's military service. For periods of military service of 1-30 days, the employer is required to continue health benefits, paying the employer's regular contribution toward those benefits. For longer periods of military duty, the employee is entitled to purchase continued coverage for up to 18 months and may be required to pay no more than 102% of the full premium under a plan (representing the employer's and the employee's share plus 2% for administrative costs). USERRA does not require the employer to permit an employee to initiate new coverage at the beginning of a period of service if the employee did not previously have such coverage. Health plan administrators may develop reasonable requirements addressing how continuing coverage may be elected, consistent with the terms of a plan and USERRA provisions.

USERRA's health plan provisions are similar but not identical to the continuation of health coverage provisions added to Federal law by the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). As with COBRA, USERRA permits the continuation of employment-based coverage. Unlike COBRA, however, USERRA's continuation coverage is available without regard to either the size of the employer's workforce or to whether the employer is a governmental entity.

The regulations also contain specific provisions for pension plan benefits. Returning employees are treated as if there was no break in service with respect to participation, vesting or accrual of benefits. The regulations provide special rules for multi-employer plans. Other seniority-based benefits are treated as if the employee never left work. The employee's rights continue to accrue and progress as if there were no break in service. For other non-seniority based benefits, employees are treated the same as employees on other types of leave.
 

Vacation and FMLA

Employees do not continue to accrue vacation while on leave, unless they would normally due so under the employer's policies. Employees cannot be forced to use vacation while on leave. On the other hand, employees must, upon request, be allowed to use vacation pay during military leave.

The proposed regulations also address the interaction between USERRA and the Family and Medical Leave Act ("FMLA"). A re-employed service member would be eligible for FMLA leave if the number of months and the number of hours of work for which the service member was employed by the employer, together with the number of months and the number of hours of work for which the employee would have been employed by the civilian employer during the period of military leave, meet the FMLA's eligibility requirements.

Example:  Joe normally works a 40-hour week. On November 5, 2004, Joe leaves to serve a tour of duty in Iraq. Prior to his departure, Joe had worked 18 weeks (720 hrs). Thirty-one weeks later, Joe returns and is re-employed on June 10, 2005. He works for 3 weeks (120 hrs). On July 1, 2005, Joe requests FMLA leave, at which time, Joe has only 840 hours of actual work for his employer (720 hours before + 120 hours since his return). If Joe is otherwise eligible for FMLA leave, the 1240 hours Joe would have worked but for his service in Iraq (31 weeks at 40 hrs/week) should be added to the 840 hours Joe actually worked for his employer. Thus, under USERRA, Joe is deemed to have worked a total of 2080 hours (840 hrs + 1240 hrs) and would certainly meet the 1250 hours requirement for FMLA leave.
  

Right of Re-Employment

Upon returning from military service of 5 years or less, an employee must be reinstated by his employer if he: (1) gave notice that he was leaving for military service, unless notice was precluded by military necessity or otherwise impossible or unreasonable; (2) the cumulative period of military service did not exceed five years; (3) the returning employee must not have been released under dishonorable or other punitive conditions from service; and (4) the returning employee must have reported back to his employer in a timely manner or have submitted a timely application for re-employment.

Employees are generally not entitled to re-employment after more than five years of military leave. However, the regulations propose an exception for employees who rejoin the service to mitigate economic losses caused by their employers' unlawful refusal to re-employ them.

If the employee's leave was 90 days or less, the employer must reinstate the employee to: (1) the position the employee would have attained if the employee had remained continuously employed and not taken the leave (known as the "escalator position"); or (2) the position the employee last held (if the employee is not qualified to perform the duties of the escalator position, after training by the employer).

If the leave was more than 90 days long, the employer must reinstate the employee to: (1) the position the employee would have attained if the employee had remained continuously employed or a position of like seniority, status, and pay; or (2) the position the employee last held or a position of like seniority, status, and pay (if the employee is not qualified to perform the duties of the escalator position, after training by the employer). USERRA also requires the employer to give the employee all promotions and pay increases that the employee would have received had the employee remained continuously employed.
 

Affirmative Defenses

The right of reinstatement is not without limitation. An employer is not required to reinstate the employee when: (1) the employer's circumstances have so changed that reinstatement would be impossible or unreasonable (i.e. an intervening reduction in force that would have included the employee); (2) reinstatement and assisting an employee in becoming qualified for a position would impose an undue hardship on the employer; and (3) the job that the employee left was for a brief, non-recurrent period and there was no reasonable expectation that the job would continue indefinitely or for a significant period. Significantly, the need to fill service members' positions while out on military leave is not a defense to re-employing them after they return from duty. Re-employment may require employers to reassign or terminate replacement employees.
 

"Escalator Position"

If an employee could have been promoted (or, alternatively, demoted, transferred, or laid off) due to intervening events "but for" a call to active duty, the escalator principle requires that the employee be reemployed in a position that reflects with reasonable certainty the pay, benefits, seniority, and other job perquisites, that the employee would have attained if not for the period of service. Depending upon the specific circumstances, employers may have the option, or be required, to re-employ the reservist in a position other than the escalator position.
 

Returning to Work

To be entitled to reinstatement, the employee must return to work within a certain period of time after completing military service. Whether an employee is required to report to work or submit an application for reemployment (written or verbal) depends on the length of military service.

If the employee's period of service was 1-30 days, the employee is required to report to the employer on the first regularly scheduled work day beginning eight hours after returning home from service. If the employee's period of service was 31-180 days, the employee must apply for reemployment within 14 days of completing service. For periods of duty more than 180 days long, the application for reemployment must be made within 90 days after completing service. If the employee is wounded or injured during the military service, the employee may reapply at the end of the recovery period not to exceed two years from the date of completion of service.
 

Prompt Re-Employment

Employers must promptly re-employ eligible service members returning from duty. The regulations propose to define "prompt" as "as soon as practicable under the circumstances." However, in most cases, re-employment must occur within two weeks of receiving a service member's application for re-employment, absent unusual circumstances. When employers are reinstating service members who have been on duty for several years, the DOL expects some delays, given that employers may have to reassign or give advance notice to other employees temporarily occupying the positions.
 

Protection Against Discharge

Once re-employed, some employees enjoy additional protection and can only be terminated "for cause," even if the employment relationship is at will. That protection may last for up to a year, depending on the length of the military service. Employees returning to work after a period military service of 31 to 180 days may only be terminated "for cause" during the 180 days after the employee returns to work. Employees returning after service of more than 180 days can only be terminated "for cause" for the one year period following their return to work.

A reinstated service member whose duration of service lasted 30 days or less has no similar protection from discharge; however, the individual is still protected by USERRA's anti-discrimination provisions. The protection against discharge ensures that the service member has a reasonable amount of time to get accustomed to the employment position after a significant absence. A period of readjustment may be especially warranted if the service member has assumed a new employment position after the military service. The discharge protection also guards against an employer's bad faith or pro forma reinstatement followed by an unjustified termination of the re-employed service member.
 

Remedies for Violation

An employer that violates the discrimination, reinstatement, or retaliation provisions of the Act can be held liable for damages. A successful plaintiff is entitled to recover legal and equitable relief in the form of reinstatement, lost wages and benefits, liquidated damages for a willful violation, attorneys' fees, expert witness fees, and litigation expenses. Significantly, the regulations provide that there is no statute of limitations in an action under USERRA. However, an unreasonable delay in asserting a USERRA cause of action which causes prejudice to the employer may bar a claim.
 

State Law

Employers should remember to consider state law when dealing with military leave issues. USERRA preempts state law, to the extent that state law reduces, limits, or eliminates any right or benefit provided by the Act. States, however, are free to enact laws that provide greater protections for employees. The Federal Office of Personnel Management has issued a separate body of regulations that govern the USERRA rights of Federal employees. See 5 C.F.R. part 353.

     
STRASBURGER & PRICE, LLP  •  DISCLAIMER
This publication provides information on general legal issues and is not intended to provide advice on any specific legal matters.