Military Leave Law in the Spotlight
By Charles R. Bacharach
Not long ago, the topic of military leave barely registered on the radar screens
of most employers. Then 9/11 happened. Since that time, more than 420,000 citizen-soldiers
have been mobilized. Nearly overnight, the Uniformed Service Employment and
Reemployment Rights Act of 1994, better known as USERRA, moved to the forefront
of employment law topics. With complaints under the Act by returning veterans
up 11 percent over last year, employers and their legal counsel need to become
familiar with this often-overlooked law.
The Act grants broad rights to employees who are absent due
to military service and applies to all employers in the public and private
sectors, including federal employers. The statute’s labyrinthine provisions
are riddled with exceptions, qualifications and other traps for the unwary,
so a complete discussion of the statute cannot be undertaken here; however,
its major highlights are:
Prohibits discrimination or retaliation against employees
and applicants based, in whole or in part, on their past, present or
future application for or membership in a uniformed service.
Grants employees who are absent for military service
the right, with limited exceptions, to reemployment in their old job
or an equivalent position at the level they would have been if the employee
had continued working during the period of military service.
Provides for an employee’s right to continued
medical coverage while absent and to reinstatement in the health plan
without exclusions or a waiting period if coverage lapses during the
Requires that the period of military service count
as service with the employer for vesting and accrual purposes under retirement
plans and allows the returning veteran to make up any missed employee
401(k), 403(b) or after-tax contributions.
Prohibits employers from terminating a returning veteran,
except for cause: (a) during the first year of employment after an absence
of more than 180 days; and (b) during the first 180 days of employment
after an absence of 31 to 180 days.
In September 2004, the United States Department of Labor
issued long-awaited proposed rules interpreting USERRA, and in November Congress
amended the statute to enhance employee rights. The regulations add some clarity
to the decade-old law. Previously, uncertain employers had only a scant number
of court decisions and interpretations of previous military leave laws to guide
them. Some of the highlights of the amendments and proposed rules are:
Defines the scope of the act: The proposed regulations
make clear that all employers, including foreign employers doing business in
the United States and U.S. companies or their affiliates doing business in
foreign countries, are covered by the Act. An “employer” under
the Act also includes successors in interest, regardless of whether the successor
knew about the potential reemployment claim at the time of the merger, acquisition
or other succession. The definition of “employee” is equally broad
and applies to all levels of employment, including executive, managerial and
professional employees. The law does not, however, apply to independent contractors,
a status that will be determined on a case-by-case basis.
Other activities while on leave: Employees are not
required to be engaged solely in uniformed service to preserve USERRA reemployment
rights. For example, an employee who reports to an out-of-state location for
military training may spend her off-duty time during that assignment moonlighting
at another job or visiting relatives without affecting her reemployment rights.
Similarly, the employee’s reemployment rights are preserved so long as
she makes a timely reemployment application, even if she seeks or obtains employment
with another employer prior to the time her reemployment application must be
made under the Act.
Health plan coverage: The recent amendments to the
Act extend a covered employee’s right to elect continued health care
coverage from 18 to 24 months. Health plan administrators may develop “reasonable
requirements”, which address how coverage may be elected, consistent
with the terms of the plan and the Act’s requirements.
The escalator principle: The draft regulations emphasize
that “the starting point” for determining a returning employee’s
proper position and benefits upon reemployment is based on the so-called “escalator
principle”. That is, the employee is entitled to reemployment in the
job position that he would have attained with “reasonable certainty” if
not for her/his absence due to military service. Reasonable certainty can be
established by showing that other employees with seniority similar to that
which he would have had if he had remained continuously employed received the
right or benefit. By the same token, the draft regulations acknowledge that
applying the escalator principle can result in adverse consequences upon reemployment,
such as being reinstated to layoff status or transferred to another shift or
New posting requirement: The recent USERRA amendments
add the requirement that all employers post a notice of rights and duties
under the law in a location where other workplace notices are posted. The Secretary
of Labor must develop the notice language by February 2005.
The regulations, like USERRA itself, are extremely detailed
and deal with many specifics not addressed here. Employers and attorneys unfamiliar
with USERRA’s many twists and turns are well advised to carefully review
the statute and regulations before determining the rights of any employees
returning from service.
Charles R. Bacharach is a member of the Employment Law Practice Group at Gordon,
Feinblatt, Rothman, Hoffberger & Hollander, LLC. He has represented clients
in a wide variety of employment law and general civil litigation matters for
over 15 years.