When They Come Home: A Refresher On USERRA's Reemployment Obligations For Employees Returning From Military Leave

Monday, January 1, 2007 - 01:00
Jennifer Blum Feldman

While the political battle regarding what to do about the war in Iraq rages on, it seems possible that some of our troops will be coming home. When and under what circumstances remain uncertain, making it difficult for employers to plan for the reintroduction of returning service members into the workforce. Employers can, however, take this opportunity to review their obligations under federal and state law with regard to employees returning from military leave.

Employees on military leave for federal service generally are protected by the Uniformed Services Employment and Reemployment Rights Act (USERRA). Although USERRA became effective in 1994, final regulations were not published until late in 2005. Without a pressing need to do so, many employers have not invested the resources necessary to digest and develop a comfort level with the new regulations. (The regulations and the preamble are lengthy, together totaling almost 70 pages). With the increasing likelihood that troops will be returning home, employers should take the time to prepare themselves for compliance with USERRA's reemployment obligations.

USERRA is a floor and not a ceiling, so employers should also make sure they understand the obligations imposed by any applicable state's laws. State law will govern in the event it provides protections to employees beyond those provided by USERRA.

The following list of questions and answers will assist employers in working through the issues that may arise when employees who have been on military leave return to the workforce:

Must The Company Reemploy The Employee?

Typically, if an employee is on a USERRA-covered military leave, reemployment is required. While there are a few exceptions, they are narrowly construed and have nuances of which employers should take note:

The employee was away too long
. Uniformed services members are generally eligible for up to five years cumulative USERRA leave per employee, extended under certain circumstances. The five-year cap includes only that time spent performing military service. It does not include any pre- or post-service time, although USERRA gives employees the right to take additional time.

The employee did not request reemployment in a timely manner
. Employees on military service for 30 days or less must report back to work on the first full regularly-scheduled workday following (1) the completion of their military service, (2) their travel home and (3) the expiration of an eight-hour rest period. Employees on military service for more than 30 days must apply for reemployment within a certain period of time after completing military service: 14 days if the military service period is between 31 and 180 days, and 90 days if the military service period is more than 180 days. These deadlines may be extended in certain situations. Also, state law may provide a longer period to apply for reemployment. In New Jersey, for example, an employee has 90 days to apply for reemployment following military service regardless of its length. Employers cannot shorten these periods as a condition of reemployment, although employees can voluntarily return to work or apply for reemployment sooner. An employee who fails to comply with these deadlines does not automatically forfeit his or her reemployment rights. Rather, the employee becomes subject to the employer's policies/practices regarding unscheduled absences.

An employee who satisfies these reemployment deadlines must be reemployed as soon as practicable under the circumstances. If an employee's military service was brief (e.g., 30 days or less), reemployment on the next working day is reasonable. If the employee's military service was for a longer period, reemployment within two weeks might be reasonable. Reemployment may be denied only in limited circumstances, e.g., if the position held prior to military leave was temporary with no expectation that employment would continue beyond a limited period, or if there was a reduction in force during the employee's military leave and the employee's position was eliminated. An employer may not deny reemployment because it would require the employer to fire the person who performed the employee's job in the employee's absence.

The employee was dishonorably discharged
. An employee who is separated from service with a disqualifying discharge (e.g., a dishonorable or bad conduct discharge, pursuant to the sentence of a general court-martial, or absence without authority for at least three months) or under other than honorable conditions is not eligible for reemployment following military service.

The employee did not submit documentation when he or she applied for reemployment.
If an employee's military service exceeds 30 days, an employer may require that the employee provide documentation establishing the employee's eligibility for reemployment. However, if the required documentation does not exist or is not readily available, reemployment may not be delayed or denied.

The employee would have been terminated for violating company policy had the employee not taken the leave
. If an employee leaves for military service while the company is in the process of disciplining the employee, the employer must reinstate the employee and then pick up the discipline process. If appropriate, termination must follow reemployment and is subject to the termination restrictions described below.

The employee resigned when he or she began his or her military service or has taken another job.
Even if prior to military leave an employee provides written notice that he or she does not intend to return to work following the leave, USERRA requires that the employee be considered to be on furlough or leave of absence while away. Under USERRA, an employee's right to reemployment cannot be waived until it has accrued, which happens after the period of military service has ended.

An employee may obtain other employment following military service but before applying for reemployment without jeopardizing his or her reemployment rights, unless the other employment would constitute cause for discipline or termination following reemployment (e.g., employment with a direct competitor in violation of company policy).

In What Position And With What Benefits Must The Employee Be Reemployed?

The "Escalator" Position
. An employee returning from military leave must be reinstated to the "escalator position," which is the position (including seniority rights, status and pay) the employee would have attained with reasonable certainty but for the military leave. If the employee's military service was for more than 90 days, the "escalator position" includes a position of like seniority, status and pay which the employee is qualified to perform. If an employee is unable to perform the essential tasks of the "escalator position," even after reasonable efforts by the employer (at its sole expense) to qualify the employee, the employee may be reinstated to the position the employee held on the date the military leave began, or, for employees whose military service was for more than 90 days, a position of like seniority, status and pay which the employee is qualified to perform. An employer's qualification efforts are not reasonable if they would impose an undue hardship (i.e., significant difficulty or expense when considered in light of the employer's overall financial resources).

For an employee with a disability that was incurred in or aggravated during military service, an employer must make reasonable efforts to accommodate the disability and to help the employee become qualified to perform the duties of either a position that is equivalent in seniority, status and pay to the "escalator position," or the nearest approximation to the equivalent position. USERRA does not define disability, but the preamble suggests the term is to be construed more broadly than under the Americans with Disabilities Act.

Health Plan Benefits.
If an employee is not covered under his or her employer's health plan at the time the employee returns from military leave - e.g., because the employee did not elect continuation coverage, the employee failed to comply with the terms and conditions for continuation coverage or the period for such coverage has lapsed - the employee's coverage must be reinstated immediately upon reemployment. A waiting period may not be imposed unless one would have been imposed had coverage not been terminated due to the employee's military service. Under USERRA, health plan coverage includes not only group health plan coverage (e.g, medical and dental) but also cafeteria plans (e.g., flexible spending accounts) from which the expenses of health services are paid. Under Pennsylvania law, employees on active military service have protections relative to continuation of health insurance and other benefits beyond those provided by USERRA.

Seniority and Non-Seniority Benefits
. While on USERRA-covered military leave, an employee accrues all seniority benefits it is reasonably certain the employee would have accrued had he or she not taken military leave and receives the benefits upon reemployment. A benefit is based on seniority if it is a reward for length of service rather than a form of short-term compensation for work preformed. For example, a longevity bonus - provided to employees for having been employed with the company for a particular period - is seniority-based, while a productivity bonus - provided to employees for work performed - is not.

With regard to non-seniority benefits, employees on military leave are entitled to these only if employees with similar seniority, status and pay on comparable leaves of absence receive the benefits. To determine whether a leave is comparable, its duration is the most significant factor, but employers should also consider whether employees have the ability to decide when to take the leave; employers should not consider whether the leave is paid or unpaid.

Pension Plan Benefits.
Following reinstatement, an employee's absence for military service does not create a break in service for pension plan purposes (including participation, vesting and accrual of benefits). For both defined benefit and defined contribution plans, USERRA provides for make-up periods for both employees and employers, as applicable, to contribute.

Can The Company Terminate The Employee Following Reinstatement?

Employees whose military service was for more than 30 days but less than 181 days may not be terminated except for cause for 180 days following reemployment. The protected period is one year for employees whose military service exceeded 180 days. These periods may be different under state law. In New Jersey, for example, an employee may not be terminated without cause for one year following reemployment regardless of the length of military service. Cause may be based on conduct provided the employee has notice that the conduct would constitute cause for termination. Cause may also be based on the application of other legitimate, nondiscriminatory reasons that would have affected any employee in the service member's position (e.g., a layoff).

Opinions may differ regarding the war in Iraq, but we are all supportive of our troops. Employers who fail to comply with USERRA and state military leave laws when these troops seek reemployment risk not only litigation but also public relations problems.

Jennifer Blum Feldman is an Associate in WolfBlock's Employment Services practice group, where she focuses her practice on preventive counseling and compliance. She also provides training to in-house counsel, managers and other employees and has significant experience as a litigator, defending local, regional and national companies in both single-plaintiff and class action lawsuits.

Please email the author at jfeldman@wolfblock.com with questions about this article.