Insider

The Department of Defense (DOD) has been authorized to mobilize as many as 50,000 military reservists, raising many questions on the employment status and benefits of employees called to service. The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) governs the reemployment, health care, pension and other benefit rights of such employees.

Generally, USERRA:

• Prohibits employment discrimination against employees who take leave for military service and guarantees reemployment when leave is over
• Provides up to 18 months of continuing health care coverage for employees who are called away for military duty and their families
• Allows employees to make up "missed" contributions to defined contribution plans, and requires employers to make up "missed" matching contributions

 

USERRA Provides for Reemployment

In general, employees returning from military leave are guaranteed employment and other rights as long as they comply with certain notification and other requirements. Employees are protected by USERRA if:

• The employee (or an appropriate officer in the uniformed service) gave advance written or verbal notice of his or her military duty
• The cumulative length of all periods of military service with the employer do not exceed five years
• The employee reports to work when required after the period of military service ends

 

The timeframe under which returning employees must report to work depends on the length of the military leave. For example, employees on military leave for fewer than 31 days must generally report on the first full, regularly scheduled working day after they return from service. Employees on leave for 31 to 181 days generally have 14 days to submit an application for reemployment. Employees who have been gone for more than 180 days will have 90 days to apply for reemployment. Exceptions are made for employees who are ill or injured when their military duty expires, and in certain other circumstances.

Upon returning from military leave, employees must be reemployed in the position they would have held had they remained continuously employed (or, for military service that exceeds 90 days, a position of comparable seniority, status and pay). Employees not qualified for that position must receive the position they held when the military leave began (or, if the military service exceeds 90 days, a position of comparable seniority, status and pay). Special rules apply for employees who are no longer qualified for their positions due to disability or other factors. Employees returning from military service shall have the seniority (and other rights and benefits determined by seniority) they had when their military service began, plus the additional seniority, rights and benefits they would have earned had they remained continuously employed.

Employers do not have to reemploy returning employees if changes in the employer’s circumstances made reemployment impossible or unreasonable; reemployment would impose an undue hardship; or any accommodation, training or effort required for reemployment would impose an undue hardship. Employees would not be entitled to reemployment if their position was for a brief, nonrecurring period, and there was no reasonable expectation of continuing the employment indefinitely or for a significant period

Continuing Health Care Coverage Required

Participants in employer health plans may continue health care coverage for themselves and their dependents for up to 18 months from the date their military leave begins. Generally, employers may charge up to 102 percent of the full health care premium for this coverage. However, if the employee will be gone for 31 days or less, he or she must pay only his or her regular share of the premium.

If health care coverage is terminated when the employee leaves for military service, the employer cannot impose waiting periods or preexisting condition exclusions when the employee returns.

The employer’s health plan does not have to cover injuries or illness that are attributable to military service -- those will be covered by the uniformed service.

USERRA Affects Qualified Retirement Plans

Military leave may not be treated as a break in service for qualified plan purposes. Upon reemployment, each period of military service will constitute service with the employer for purposes of vesting and accruals. If accrued benefits are based on employee contributions or elective deferrals, returning employees are entitled to those benefits only to the extent that they make such contributions or deferrals.

Upon returning to work, participants in defined contribution plans may make up "missed" contributions to their plan, and payments may be made over a period up to three times the period of military service, up to a maximum of five years. Employers must make up any matching contributions that would have been required had the employee’s contributions been made during the period of military service.

Other USERRA Provisions

Employees on leave for military service shall be deemed to be on furlough or leave of absence and shall be entitled to any other rights or benefits provided to similarly situated employees who are on leave of absence. Employees on leave for military service may opt to use any vacation, annual or similar leave during the period of service.

Employees returning from military service may be not be discharged (except for cause) for 180 days if the employee was on leave for 30-180 days, or for one year if the leave period exceeded 180 days.

Under USERRA, it is illegal to deny initial employment, reemployment, retention, promotion or any other benefits of employment to someone based on his or her membership in the uniformed services. If an employee’s membership in the uniformed services is a motivating factor in a personnel decision, employers will be in violation of the USERRA unless they can prove that the decision would have been made regardless of the employee’s military membership or obligation.