During the past few years, the U.S. has witnessed a number of men and women going into and coming out of combat and support situations domestically and around the world. This is especially the case now that President Bush has announced additional troops may be sent into Iraq.
For employers, these comings and goings pose special concerns: How do you handle such situations? What leave should or must such employees be granted? What compensation and benefits should be provided? What happens when an employee returns from leave?
The answers to many of these questions are mandated by law, particularly by the federal Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
USERRA applies to all employers, regardless of size. It requires certain employment and re-employment rights and benefits be provided to employees who leave their civilian jobs voluntarily or involuntarily to serve in the U.S. uniformed services, including the Army, Navy, Marine Corps, Air Force, Coast Guard, reserves for all these entities, National Guard and commissioned corps of the Public Health Service. USERRA also prohibits discrimination against returning service members on the basis of their active military duty or training obligations or any leave taken to fulfill those obligations.
Many states have enacted laws that mirror or expand USERRA protections. You should be sure, therefore, to consider applicable state law provisions when constructing a military leave policy or making decisions regarding an employee currently on or returning from military leave.
What is required?
You are required to provide employees with leave to fulfill any obligations they may have toward any branch of the U.S. uniformed services. You must provide this leave regardless of the circumstances of an employee's call to service. This includes whether the employee volunteered to serve or was required to serve; whether the employee is entering active service; and service as a reservist or service of the National Guard—regardless of how long the individual has been employed.
The purpose of this requirement is to make it easier for individuals to provide military service. Although this leave requirement (particularly the reinstatement and benefit obligations) imposes a burden on employers, it is viewed as a means of sharing some of the costs and burdens borne by the individual service members.
Notably, the leave need not be paid. It is up to each employer whether to offer pay to employees during their period of service. Most employers do not pay employees on military leave though some offer a modest one-time bonus intended to help employees and their families adjust to military life and military wages. The key is to be consistent and provide pay on the same terms and with the same eligibility requirements for all serving employees.
Note that you have to provide employees on military leave with the right to obtain continuation coverage under any group health insurance plan you offer (and under which the employee is covered at the time of leave). If an employee is on leave for 30 days or less, he must be allowed to continue group health coverage as if he were actively at work during the entire leave period.
If the leave is for more than 30 days, the employee must be provided the opportunity to obtain continuation coverage for him and any covered dependents for the duration of the military leave up to a maximum of 24 months. Unlike the Consolidated Omnibus Budget Reconciliation Act (COBRA), USERRA requires all employers to provide continuous coverage regardless of their size and for longer than the 18 months of continuation coverage otherwise required by COBRA. An employee may be charged the usual premium for such continuation coverage—up to 102 percent of the premium—though you may choose to charge less.
What happens upon return?
USERRA requires the "prompt re-employment" of all eligible returning service members. This means you must return all eligible returning service members to work "as soon as practicable under the circumstances." Absent unusual circumstances, this generally means an individual must be returned to work within two weeks after applying for re-employment.
An individual is considered to be an eligible returning service member if he meets all the following criteria:
"Timely basis" is defined as follows:
If the employee fails to meet any one of the five criteria, he may not be entitled to re-employment. But if those criteria are met, he must be allowed to return to work even if the leave was up to five years long.
Eligible employees must be returned not just to the positions they left but to any higher, or escalated, positions they would have attained had they been actively at work during the period of military service. Such positions—commonly referred to as "escalator positions"—must be determined by reviewing what an employee's peers attained during that same period in terms of seniority, status, pay, and other terms and conditions of employment.
For example, if you awarded others pay increases or promotions on the basis of seniority during an employee's military leave, you would need to restore the returning employee to work with the same increased pay and same position level (any seniority promotions included) as if he had not taken the leave and had been at work during that time.
You also are responsible for providing the returning employee with any training or retraining necessary to enable him to return to the position. This does not require special schooling or long-term training to provide a new degree or skill set, but it likely requires training for new or updated equipment or methods of operation; training on a new computer system or software; or updating safety training, particularly if such training were provided to other employees during the individual's absence.
By the same token, if an employee would have been laid off during the leave because of his seniority and/or job classification and would not yet have been offered reinstatement, the employee would not have to be returned to work but would be placed on layoff status (or terminated). You are not required to create rights or positions to which an employee would not otherwise have been entitled. This is a circumstance in which the escalator principle works in reverse.
There are few situations in which you can avoid these obligations. It is not enough to have filled a position during the individual's leave, have no comparable positions currently available, or be in the midst of a hiring freeze or other budget constraints. The law requires you to reach beyond those considerations and find a way to return a service member to work even if it means disrupting another employee's position or restructuring ways in which your work force functions. You can decline to return a service member to work only if to do so would be impossible or highly unreasonable.
Changes that are not seniority-based need not automatically be provided, but you should take a hard look at whether seniority may have played a role even if it was not articulated. The burden will rest on you to provide the necessary escalations to the returning service member.
You also must return the individual to your group health insurance plan, restoring him to his pre-military leave coverage (or to such equivalent coverage as is available under your current plan) with no waiting period or special exclusions. These benefits must be restored regardless of whether the employee elected to continue group health insurance coverage during military leave. To the extent your plan does not provide for such automatic reinstatement (though most should), you should work with your provider or legal counsel to make the necessary changes to ensure you will be able to provide these protections.
Special considerations also may apply to pension and other similar retirement benefit plans. These, too, should be reviewed with a qualified provider or legal counsel to ensure you are in a position to comply with any relevant legal requirements.
What if he is disabled?
An individual who becomes disabled while in the uniformed service has special rights when returning to work. Such an individual has a longer period of time—up to two years—to return to work provided the delay is related to the disability.
Once the individual returns to work or applies for return to work and it is discovered he cannot perform the job because of a disability incurred or aggravated during his military service, you must make a reasonable effort to accommodate the disability. You also must provide special training or retraining to such individuals to enable them to perform their jobs (and/or any escalator positions to which they may be entitled).
If an individual still is not able to perform because of a disability, shift your focus and look for other positions for which the employee would be qualified. Specifically, undertake reasonable efforts to accommodate the employee's disability and help him become qualified either for a position that is equivalent to the escalator position in terms of seniority, status and pay (perhaps an office job, driving position or other job with which his disability does not interfere) or for a position that is the "nearest approximation" to that escalator position, noting this nearest approximation may be a position that is higher or lower than the original escalator position.
You can avoid these obligations only if providing the accommodation would impose an "undue hardship" on you as an employer or on your business.
USERRA's standard for undue hardship is similar to but even more stringent than that under the Americans with Disabilities Act. Basically, you can refuse an accommodation only if the action would impose significant difficulty or expense in light of the nature and cost of the accommodation; your overall financial resources; the number of individuals you employ; the effects of the accommodation on your operations, including its effect on your expenses and resources; and your operations and operational structure. There is no formulaic way to determine whether an undue hardship exists. Each situation must be considered on a case-by-case basis.
What else is required?
Once an individual returns to work, USERRA provides special protections against the employee's termination. A returning service member's employment cannot be terminated without cause for a specified time period after his re-employment following military leave. The time period for which this protection is in place depends on the length of the individual's military leave. For leaves of 31 to 180 days, the protection applies for six months following reinstatement; for leaves of 181 days or more, the protection applies for one year following reinstatement. (Employees who were on leave for 30 days or less do not have any special protection regarding termination but are protected from discrimination targeted at their leave just like any other returning service member.)
Although USERRA does not define "cause," it generally is viewed to be a rather high standard. Mere performance difficulties or run-of-the-mill attendance violations are not sufficient. Rather, an employee must directly disregard or disobey applicable work rules or instructions or take other actions deemed significantly harmful to you as an employer or your operations.
USERRA also forbids you from discriminating and retaliating against a returning service member for enforcing or attempting to enforce his rights under USERRA. These protections mirror those provided by other laws involving discrimination and retaliation on other bases (such as race, gender and religion) and compliment laws that protect veterans and members of the reserves and National Guard—even those who do not require leave. These nondiscrimination and nonretaliation provisions apply to all aspects of employment—hiring, firing, compensation, promotion, etc.
Finally, USERRA requires you advise employees of their rights by providing them with a special notice published by the U.S. Department of Labor (DOL). The notice must be posted in a conspicuous location in the workplace or otherwise distributed to each employee (such as by personal delivery, mail or e-mail); the key is to have a record or proof the notice was posted or delivered.
What's to come?
As more people are involved in military conflicts around the world, the laws relating to their deployment and re-entry to civilian life are bound to be examined and re-examined on federal, state and local levels. Many states, for example, provide job-protected leave and other benefits to family members of uniformed service members to provide them with the time necessary to see off their family member and make the necessary arrangements and adjustments to that family member's absence. Other states are attempting to find ways to supplement military pay by using public funds and requiring private employers to provide more in the way of paid leave for military service.
With these changes under way and the law in as detailed a state as it currently exists, it is a good idea not only to understand what is required by USERRA and other state, local and supplemental laws but also to formulate appropriate military leave policies to incorporate those provisions into your employment practices. Be it in a policy distributed to employees or for management guidance only, it helps to think through the various issues and requirements before a decision is upon you.
Victoria L. Donati and Jason C. Kim are partners in the employment law group with the Chicago-based law firm Neal, Gerber & Eisenberg LLP.
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