As a result of the tragic events of September 11, 2001, the country finds itself at war. War requires armed forces. Some are employed full-time by the United States during times of peace and war. Others are employed part-time during times of peace and full-time during wartime. On September 14, 2001, President George W. Bush authorized the mobilization of up to 50,000 armed forces reserves to active duty. You may find that you, your coworkers or employees have now been called upon to serve full-time in the armed forces. Whether such personnel return imminently, due to the fall of the Taliban in Afghanistan, or later, after possible deployment against the forces of other countries involved in state-sponsored terrorism, it is critical that they not be prevented from returning to their positions in the civilian workforce as a result of their status as full-time, part-time or provisional military personnel.
To both protect American soldiers from discrimination and to assist them in focusing on their mission, Congress passed the Uniformed Services Employment and Reemployment Rights Act (“USERRA”) in 1994. Little noticed at the time, USERRA could soon become as familiar an acronym to employers and employment lawyers as FMLA, ADA, and EEOC. This statute applies to all U.S. businesses anywhere in the world with at least one employee. Neither small businesses nor foreign affiliates of U.S. companies are exempted.
Under USERRA, it is unlawful for an employer to deny certain “covered individuals” initial or re-employment, continued employment, a promotion or any other benefit of employment on the basis of membership in the uniformed services. Those called to active duty in the Army, Navy, Air Force, Marines, Coast Guard, Army National Guard or Air Force National Guard are considered “covered individuals”, regardless of whether the duty entails active duty, active duty for training, full-time National Guard duty, or a period of time during which the persons are being examined to determine their fitness to perform any of these duties. These protections apply whether individuals are involuntarily called to active duty or voluntarily join.
In order to receive job protection, individuals must (a) notify their employers of a call to active duty (notification may also be provided directly by a military official in certain cases), (b) not receive a dishonorable or bad conduct discharge from duty, and (c) re-connect with their employers within certain statutorily prescribed time periods following service.
USERRA does not protect employees absent from their jobs in excess of five years (cumulatively) while employed by the same employer. In other words, if an employee avails him- or herself of the protections of the statute for periods of time totaling more than five years, all while employed by the same employer, that employer is not required to provide re-employment once leave exceeds five years. Instead, at its discretion, the employer may elect to do so. The Act contains an exception to the five-year rule, however, in times of national emergency. Because President Bush has declared a state of national emergency in connection with the terrorist attacks, leaves taken to comply with the President’s call of military personnel to active duty will not count toward the five years.
A. Re-employment Obligation
Perhaps the most fundamental protection afforded by USERRA is the guarantee of re-employment upon return from service. In short, an employer generally must “promptly” reemploy an employee as if his or her employment had never been interrupted by service in the military. This obligation is excused in only four situations:
1 – an employer’s circumstances have changed so dramatically during the employee’s service absence that re-employment in the present climate would be impossible or unreasonable;
2 – the returning employee has incurred an injury (or aggravated a pre-existing injury) while on active duty and accommodation by the employer would constitute “undue hardship” because of the difficulty or expense involved;
3 – the employee’s position was temporary or the employee resigned from employment prior to going on active duty; or
4 – the employee is dishonorably discharged from military service.
Moreover, an employer is not required to provide re-employment to a person who fails to notify the employer of his or her discharge from active duty within time limits specified by the statute. The length of the applicable time periods for re-establishing contact with an employer after completion of service varies with the duration of the employee’s military service. Extensions are available for returning employees injured or disabled while on active duty. Employees serving 30 days or less must report for work no later than the beginning of the next scheduled business day following their discharge from service, provided that they have at least eight hours between their return home and the commencement of the first work day.
Where service lasts between 31 and 180 days, the returning employee must submit an “application for reemployment” within 14 days after completing service. For service over 180 days, the employee must submit his or her application for reemployment within 90 days following discharge from active duty. Employees failing to report or re-apply for employment in a timely fashion do not necessarily forfeit their employment rights and benefits, but they will become subject to an employer’s policies concerning unexcused absences from work.
Note that there is no obligation that an employer continue to pay an employee who has departed for military service; rather, the active duty employees need only be treated the same as any other employee taking an excused leave of absence. Nevertheless, some companies have gone beyond USERRA’s minimal requirements, offering to pay the difference in military base pay and a full-time employee’s salary, or in some cases paying the employee’s full base salary in addition to the military service pay received by the employee while called to duty.
What does it mean to “reemploy” an employee who has been absent from the company to which he or she proposes to return? This may be a difficult question, especially considering that during the employee’s absence, his or her peers continued in their positions, accruing seniority and benefits and learning new skills.
If an employee serves 90 or fewer days, he or she must be returned to either (a) the position the employee would have held had he or she never left for military service (the “Current Position”) or (b) the employee’s former position (the “Former Position”), if the employee is not qualified, even after reasonable efforts by the employer to qualify the person, for the Current Position. If service lasts in excess of 90 days, the employee must be returned to either (y) his Current Position, or a position of like seniority, status and pay, provided the returning employee is qualified to perform the duties of that position, or (z) to his Former Position (or to a position of like seniority, status and pay), but only if the person is not qualified to return to the Current Position, even after reasonable efforts by the employer to qualify the person for that position. Employees who have become disabled (or have experienced an aggravation of an existing disability) during their service and who, as a result, are no longer qualified for the jobs to which they would have otherwise returned, must be employed in another position equivalent, or as nearly as possible in seniority, status and pay, to that previous position.
B. Restrictions on Termination
Once reemployed, an employee enjoys some limited protection against termination. The employee may not be terminated, other than for “cause,” during either the first 180 days or one year following re-employment, depending on the duration of the employee’s leave for military service. While “cause” is not defined in USERRA, actions that are typically encompassed by the concept of “cause” include: theft, disloyalty, excessive absenteeism, commission of felonies, gross negligence or dereliction in the performance of duties.
C. Credit for Seniority and Benefits
Service members are entitled to credit for seniority purposes, and all rights and benefits based on that seniority, as if there had never been a break in employment. Additionally, an employee who is absent from his or her job due to military service must receive the same non-seniority based benefits as individuals taking excused leaves of absence. Employees in high tech or other industries holding incentive stock options (ISOs) issued by their employer will not forfeit the special tax benefits associated with ISOs by virtue of their military service; typically, in order to qualify for special ISO treatment, an option holder must be continually employed by the company issuing the option (or by a related company) from the date of grant until at least the date occurring three months prior to exercise of the option.
Employees on military leave are entitled to all the benefits, if any, which are available to employees on non-military leaves of absence and on the same basis. An employee may use vacation or sick leave for military service, and thus receive full pay in accordance with the employer’s policy for paid vacation or sick days, but may not be required by the employer to do so. However, an employer is not required to allow the absent employee to continue to accrue vacation and sick time, unless it is the employer’s policy to do so for all employees on leaves of absence. USERRA allows for continuation of health plan coverage for up to 18 months, during which time the employer can require the employee to pay up to 102% of the full premium.
Returning employees must also receive credit for all purposes under the employer’s retirement plans as if they had remained employed during their leave for military service. The employee must receive an allocation to his or her account or an increase in accrued benefits equal to that which would have been made had the individual been continuously employed. Under a 401K plan, the returning employee can make “catch-up” contributions and receive matching contributions with respect to the period of absence.
D. Terms and Conditions of Employment; Hiring
USERRA also prohibits employers from discriminating in any terms and conditions of employment based on an employee’s military service. Employers also may not refuse to hire someone because of a fear that the individual may be called to or volunteer for active duty.
If an employer violates any individual’s rights under USERRA, the aggrieved person may sue (or request that the Department of Justice sue) for damages, reinstatement and costs of litigation, including attorneys’ fees. Employers may also want to consider the negative publicity that might arise from public perception of the employer as unpatriotic and unsympathetic.
Additional Requirements for Massachusetts Employers
In addition to the federal requirements contained in USERRA, Massachusetts employers must also observe certain state laws in connection with military personnel. Under Chapter 149, Section 52A of the Massachusetts General Laws, military reservists, other than temporary employees, may take leave from work in order to train with the armed forces for up to 17 days in any given calendar year, if the reservist gives notice to his or her employer of the departure date, return date, and of his or her satisfactory completion of training. Upon his or her return from training, the employee is entitled to resume the employee’s previous position, or a similar one, provided that the reservist remains qualified to perform that job upon return to employment. If an employer fails to comply with Massachusetts law, an employee may sue for damages or equitable relief.
Massachusetts also provides that military veterans may take leave from work in order to participate in Memorial Day or Veterans’ Day exercises, parades and services, provided that the employee is non-essential to either (a) public health or security or (b) the security of the employer’s property.
In the aftermath of the September 11, 2001 terrorist attack on American targets, President George W. Bush received authorization from Congress to call up to active service as many as 50,000 military reservists. As of January 18, 2002, according to cnn.com, President Bush had called at least that number of men and women to active duty. Others have been called to service by state governors or have volunteered for service. Many, if not most, of these individuals intend to return to their places of employment following their discharge from active duty. You, your coworkers or employees may be among them.
Our uniformed servicemen and women deserve our support, respect and encouragement. With the availability of USERRA and additional state law safeguards, they have job protection as well.
At Gesmer Updegrove LLP, attorneys in the Employment Law Practice Group stand ready to assist and counsel clients in adopting military leave policies or who have questions about their obligations under the law.