you & userra: an employer’s guide to military leave

Julie Athey Attorney

M . L E E S M I T H P U B L I S H E R S L L CB r e n t w o o d , Te n n e s s e e

You & USERRA: An Employer’s Guide to Military Leave

This special report provides practical information concerning thesubject matters covered. It is sold with the understanding that neitherthe publisher nor the writer is rendering legal advice or otherprofessional service. Some of the information provided in this specialreport contains a broad overview of federal law. The law changesregularly, and the law may vary from state to state and from onelocality to another. You should consult a competent attorney in yourstate if you are in need of specific legal advice concerning any of thesubjects addressed in this special report.

© 2008 M. Lee Smith Publishers LLC5201 Virginia Way

P.O. Box 5094Brentwood, Tennessee 37024-5094

All rights reserved. No part of this book may be reproducedor transmitted in any form or by any means without

permission in writing from the publisher.

Printed in the United States of America

ISBN 1-60029-037-X

INTRODUCTION ........ 1

1 — USERRA PROTECTIONS ........ 3

Covered Employers ........ 3

Employee Eligibility ........ 5

Amount of Leave Required ........ 7

Benefits Protections ........ 8

Job Reinstatement ........ 11

Discrimination and Retaliation ........ 15

Policies and Procedures ........ 17

Enforcement and Litigation ........ 18

2 — INTERACTION WITH THE FMLA ........ 19

Comparison of USERRA and FMLA ........ 19

FMLA Leave for Military Families ........ 20

Effect of USERRA Leave on FMLA Eligibility ........ 24

3 — DISABILITIES UNDER THE USERRA AND ADA ........ 27

USERRA Provisions for Disabled Employees ........ 27

Comparison of USERRA to ADA ........ 28

Other ADA Implications for Disabled Veterans ........ 30iii

Contents

iv


4 — USERRA’S CONTINUATION COVERAGE REQUIREMENTS ........ 31

Comparison to COBRA ........ 31

Scope of USERRA Coverage ........ 32

Election Procedures ........ 33

Coordinating USERRA, COBRA, and Military Coverage ........ 33

5 — STATE LAWS ........ 35

State Military Family Leave Laws ........ 35

Military Leave Requirements in All 50 States ........ 36

CONCLUSION ........ 37

Notes ........ 37

APPENDIX A ........ 41

Sample Military/Reserve Leave Policy ........ 41

APPENDIX B ........ 43

State Military Leave Laws ........ 43

With the continuing U.S. military presence in Iraq, Afghanistan,and other parts of the world, more and more employers arefaced with the task of determining their obligations to employ-ees who have served in the military, enlist in the military, arecalled to or serving active duty, or have a family member onactive duty or injured in military service. As of January 2008,

nearly 24,000 members of the National Guard and military reserves weredeployed in Iraq or Afghanistan. Even more dramatically, more than 450,000members of the National Guard and military reserves have been deployed toIraq or Afghanistan since September 2001.1 Most of those servicemembers leftbehind a job and a family in order to fulfill their military obligations.

For each employee that leaves a job in order to serve in the military,there is an employer obligated to comply with the many legal requirementsand protections that apply to servicemembers and their families. The mostnotable of those requirements arise under the Uniformed Services Employ-ment and Reemployment Rights Act (USERRA), which contains a widerange of provisions that protect employees who leave work for the purpose ofserving in the military. For example, the USERRA:

• Guarantees employees up to five years of leave for their own militaryservice;

• Requires employers to give them their old jobs back when theyreturn from military service;

• Provides certain benefits protections during and upon returning fromleave; and

• Prohibits discrimination against employees and job applicants on thebasis of their past, current, or future military service.2

However, the USERRA is far from the only law that is implicated whenan employee takes leave related to her own or a family member’s military serv-ice. The following laws are also implicated:

• The Family and Medical Leave Act (FMLA) guarantees eligible employ-ees up to 26 weeks of leave when a family member is called to orinjured in military service, provides certain benefits protections dur-ing and after leave, and prohibits discrimination against employeeswho assert or exercise their FMLA rights. Employees may also be eli-gible for FMLA leave after returning from military service.

• The Americans with Disabilities Act (ADA) prohibits discriminationagainst and requires reasonable accommodation of qualified employ-ees and job applicants who are disabled, have a history of disability, or 1

More than450,000members ofthe NationalGuard andmilitaryreserves have beendeployed toIraq orAfghanistansinceSeptember2001.

Introduction

are regarded as being disabled, including those who are disabled as aresult of military service.

• The Consolidated Omnibus Budget Reconciliation Act (COBRA) guaran-tees employees the right to continue their employer-provided healthcoverage at their own expense for up to 36 months after specifiedevents occur (such as the employee quitting or going on militaryleave).

• State military leave laws may entitle employees to military leave underdifferent circumstances than under federal law.

Because the main obligations that employers have to employees whoserve in the military arise under the USERRA, we will discuss it first and inthe most detail. In later sections, we will cover the other laws and discuss andcompare how they interact with and differ from the USERRA.


2

3

USERRAProtections 1T

he USERRA’s requirements are more vast and complicated thanmany employers realize. The Veterans Employment and Training Serv-ice (VETS) — which is part of the U.S. Department of Labor (DOL)— is responsible for interpreting and enforcing the USERRA. InDecember 2005, VETS issued final regulations intended to guideemployers on how to comply with the USERRA.3 The regulations

are structured in a question and answer format, with employees as the intendedaudience. They offer valuable (if excruciatingly detailed) guidance on how tocomply with some of the law’s more confusing aspects. The following sectionsare based in large part on those regulations.

In general, the USERRA requires employers to give up to five years ofunpaid leave to, reemploy, and maintain certain benefits for employees who aremembers of or enlist in one of the uniformed services. It also prohibits dis-crimination against members of the military and retaliation against them forexercising their USERRA rights.

COVERED EMPLOYERS

Unlike many other federal employment laws and regulations, theUSERRA applies to virtually all employers, regardless of size. More specifically,it applies to:

• All public and private employers, regardless of how many or fewemployees they have;4

• All states, their political subdivisions, and U.S. territories;5

• The federal government (as a public employer);• Local governments (as a public employer);• Foreign employers that do business in and have a physical location or

branch in the United States;6 and• U.S. employers that operate overseas.7

Joint Employers

Two (or more) employers that have joint control over an employee mayboth be responsible for USERRA compliance.8 For example, both a tempo-rary staffing agency and the employer where the temporary employees workare responsible for USERRA compliance.

In most joint employment situations, both employers are liable for anyviolations that may occur. It is unclear from the DOL’s regulations whetherthat is the case under the USERRA. In fact, the regulations appear to indicatethat although an employee may be jointly employed by more than oneemployer, it is the employer that actually commits the violation who will belegally responsible for it. That would, however, contradict the application ofjoint employment principles in most other federal employment statutes.

Employers who have any employees who are jointly employed throughor by another employer should take precautions to ensure that the otheremployer is in full compliance with the USERRA in its dealings with theemployee. It is also useful to have a clause in any contract under which theother employer agrees to assume responsibility and liability for USERRA vio-lations. That may not protect you from a lawsuit by the employee, but it mayprovide you with a claim against the other employer if you are eventually heldliable for its violations of the USERRA.

Successors in Interest

An employer may be liable for USERRA violations committed by apredecessor company if it meets the requirements of a “successor in interest.”That basically means that the employer bought out or took over the operationsof another company or organization and there was sufficient continuitybetween the two businesses for them to be treated as one. The factors that areconsidered in making this determination focus on whether there was:

• Substantial continuity of business operations, facilities, machinery,equipment, and methods of production;

• Substantial continuity of employees; and• Similarity of supervisors or managers and products or services.9

As with joint employers, a successor company can try to limit its expo-sure to USERRA liability with contractual provisions under which the prede-cessor takes responsibility for any USERRA violations it may have committed.Again, this will not protect you from being sued or a judgment being enteredagainst you. However, if that happens, you may then be able to sue the prede-cessor company to recover your losses.

What if an employee is already out on military leave when the changein business operations occurred? At least one court has held that an employeein such case may have the right to be reinstated to a job at the successorcompany.10

Individual Liability

The USERRA applies to all employers, a term that is defined to includeany person who:

1) pays salary or wages for work performed, or2) has control over employment opportunities.


4

In most jointemployment

situations,both

employers are liable

for anyviolations that may

occur.

USERRA Protections

5

The definition of employer also includes individual employees to whoman employer has delegated the performance of employment-related responsi-bilities that aren’t purely ministerial in nature. In other words, the USERRAallows employees to sue the individual within the employer’s organization thattook any actions in violation of the USERRA. That could potentially includeindividual supervisors and managers, human resources professionals, and anyexecutives who were involved in making decisions — such as whether to hireor fire an employee — in violation of the USERRA.

EMPLOYEE ELIGIBILITY

In order to qualify for leave and reemployment under the USERRA,the employee must meet a variety of eligibility criteria. Some of those criteriamust be met before the employee takes leave while others must be met whenthe employee returns from leave.

Scope of Employment Relationship

Most of the USERRA’s provisions apply to all employees and formeremployees of the employer. Temporary, part-time, probationary, and seasonalemployees are also protected under some provisions, but independent contrac-tors are not.11

Some of the USERRA’s protections also apply to job applicants, assum-ing they meet the military service requirement. For example, the USERRA’sdiscrimination and retaliation provisions apply to job applicants, while theleave and benefits protections do not.

Type of Military Service

The first eligibility requirement for employees is that they must serve orhave served in the uniformed services. That includes a number of differenttypes of active or inactive military training and service, including:

• Members of the Armed Forces (Army, Navy, Air Force, Marines, andCoast Guard);12

• Members of the National Guard pursuant to a federal statute (asopposed to a state authority);13

• Members of the military reserves;• Some members of the ROTC;14

• Members of the commissioned corps of the Public Health Service;• Students at any of the four military service academies;15 and• Other individuals who perform certain types of disaster relief16 or any

other category of persons that the president designates as a uniformedservice in a time of war or national emergency.17

It does not matter whether the employee’s military service is or was per-formed: 1) on a voluntary or involuntary basis; or 2) in times of peace or war.18

Some unfortunate employers have made the mistake of assuming thatthe USERRA doesn’t apply to employees who enlist in the military asopposed to the National Guard or reserves. That could not be further from thetruth. An employee may decide to enlist in the Armed Forces today, take leaveto fulfill her four-year commitment to whichever service she enlisted in, andbe entitled to reinstatement upon her completion of that commitment.

Form of Military Discharge. Some employees may not be eligiblefor the reemployment and benefits protections of the USERRA if they werecourt-martialed, absent without leave, or otherwise received a dishonorable orbad conduct discharge.19

Employee Notice Requirements

In order to activate their leave rights under the USERRA, employeesmust meet a number of procedural requirements.

Notice of Leave. First, employees must provide the employer advancenotice that they are going to be absent from work for military service. Suchnotice may be written or oral, does not need to be in any particular format,and may be given on the employee’s behalf by an appropriate military officer.20

It must be given as far in advance of the need for leave as is reasonable underthe circumstances, preferably at least 30 days if feasible.21

However, no specific time frame is absolutely required for how manydays of notice will be considered reasonable. In addition, the employee doesn’thave to give advance notice if doing so is impossible or unreasonable underthe circumstances.22 As a practical matter, the exceptions to the employeenotice requirement are so broad that employers will rarely be able to claimthat an employee forfeited his or her USERRA rights by failing to provideadequate notice.

Note that the regulations specifically distinguish between giving anemployer notice of the need for leave and asking for permission to take leave.Notice is required; permission is not.23

Intent to Return from Leave. Nor is it required for an employeewho is giving notice of the need for leave to assure the employer that sheintends to return to work for the employer after her military commitments aresatisfied.24 An employee’s right to reemployment does not depend on herintent to return to work. Even if an employee tells you she won’t ever be com-ing back to work, you’re still required to rehire her if she reapplies in a timelyfashion when her military commitment is over and otherwise meets therequirements of the Act.

In other words, employees can’t waive their reemployment rights. Moreon the topic of USERRA waivers below on page 15.

Notice When Military Service Is Concluded. In addition, when anemployee’s military service is concluded, he must provide the employer withnotice that he intends to return to work. If he does not provide such notice,then he has no reemployment rights. The standards that apply to this type ofnotice are discussed in more detail on page 12.


6

An employee’s

right toreemployment

does notdepend on her

intent toreturn to

work.

USERRA Protections

7

AMOUNT OF LEAVE REQUIRED

In general, the USERRA requires employers to reemploy eligibleemployees who have missed up to five years of work (cumulatively) due totheir performance of military service.25 Service performed while working fora different employer does not count.26

However, employers may be required to provide more than five yearsof leave in certain circumstances. Only absences that are necessitated by theemployee’s military service are counted toward the five-year limit.27 If anemployee takes a week or two to pack and otherwise get things in orderbefore reporting for duty, that time may or may not exhaust any of his militaryleave, depending on whether the activities are necessitated by the militaryservice.28 The time frame during which an employee may apply for reem-ployment after being relieved of his military obligations is not counted towardthe five-year limit.29

That doesn’t mean the employee must have been actually deployed inorder for his time to be counted against the five-year limit. Nor does it matterthat the employee uses some of his time for purposes other than military serv-ice, as long as his absence from work is necessitated by his service in the mili-tary.30 For example, if an employee is required to report for training in a differ-ent geographical location than his place of employment, that training timecounts under (and is protected by) the USERRA even if he uses his off-dutytime for personal pursuits.

There are also other exceptions to the five-year limit, such as:• When an employee is required to complete an initial period of obli-

gated service of more than five years;31

• When the employee — through no fault of his own — is unable toobtain orders releasing him from service before the expiration of thefive years;

• Various other types of voluntary or involuntary active duty, includingany period of captivity;32

• Time the employee spends in routine National Guard and militaryreserve training is not counted toward the five-year maximum;33

• Any time the employee spends in other types of training as deemednecessary by a proper military authority is not counted toward thefive-year maximum.34

In each of these situations, the employer is required to comply withthe USERRA in spite of the fact that the employee was gone for more thanfive years.

Challenges for Employers

In many situations, figuring out how to calculate the amount of leave anemployee has exhausted can be very tricky. As is clear from the above list ofmilitary service that isn’t counted toward the five-year limit, you can’t just


8

count the number of days an employee is absent from work. You need to obtaindetailed information about the character and duration of the employee’s mili-tary service, including precise dates of when he reported to and was dischargedfrom duty.

Intermittent Leave. There are also special difficulties that arise foremployers when an employee takes USERRA leave intermittently — forexample, for military training. For one thing, it can be confusing to determinewhether training counts toward and keep a tally of how much of the five-yearlimit such an employee has exhausted over an extended period of time.

In addition, the regulations specifically state that employees are notrequired to accommodate their employers’ concerns regarding the timing, fre-quency, or duration of uniformed service.35 It can be burdensome for anemployer to grant all the intermittent leave to which an employee is entitledwithout being able to place any limits on when or how often the leave is taken.

Yet unlike some other federal employment statutes — such as the ADAand FMLA — employers have to provide military leave no matter how bur-densome it may be to do so.36 An employer’s only recourse in that regard is tobring its concerns to the attention of the appropriate military authorities, whoare required by law to provide assistance to employers in addressing these typesof timing issues.37

BENEFITS PROTECTIONS

While an employee is absent from work due to military service, she isdeemed to be on furlough or leave of absence. That is true even if the employerclassified her employment as having been “terminated.” That basically meansthat the employer must maintain, protect, and in some cases contribute to var-ious types of employee benefits as if the employee had not taken military leave.

The USERRA’s benefits protections do not, however, apply to:• Employees who hold temporary jobs for which there is no reasonable

expectation that they will continue indefinitely or even for a signifi-cant period of time;38 or

• An employee who knowingly provides written notice of her intentnot to return to work for the employer after her military service iscompleted.39

In both of these situations, however, the employer may still be requiredto rehire the employee at the end of military service.

Health Benefits

When an employee takes military leave, the employer is required to offerher the choice to continue health insurance coverage for a certain period oftime. This requirement is very similar to the continuation coverage require-ments that most employers must comply with under COBRA. This topic isdiscussed in more detail in Section 4.

Reinstatement of Insurance. In addition, when an employee returnsfrom military service, she will be entitled to health insurance benefits as if shehad not taken any leave at all. That’s true even if she didn’t elect to continueher coverage under your plan when the military leave commenced.

This means that you cannot, for example, impose a waiting period orpreexisting condition exclusion for the employee or her dependents to be fullycovered under your group health plan. But note that you are allowed to imposesuch conditions to coverage when an employee’s illness or injury is incurredduring or aggravated by the employee’s military service.

Retirement Plan Protections

USERRA’s pension protections apply to ERISA-covered pensions, aswell as non-ERISA plans such as state, governmental, and church plans.40

USERRA defines a “pension plan” as any plan that provides retirementincome to employees after the end of employment or beyond, including bothdefined benefit plans (e.g., traditional pension plans) and defined contributionplans (e.g., profit-sharing and 401(k) plans). In fact, the definition is broadenough to encompass nonqualified retirement plans (e.g., “top-hat” plans).

Exactly what is required depends on whether you offer a defined benefitor defined contribution retirement plan. Regardless of the type of plan, thegoal of USERRA is to give returning veterans the chance to have the samepension they would have had if they’d remained continuously employed ratherthan taking leave for military service.41

Employees who take military leave can’t be required to forfeit any ben-efits they have accrued under your retirement plan or to requalify for partici-pation in the plan upon returning from leave. In addition — and this is impor-tant — pension-reinstatement rules apply only when you rehire a veteran.42 Ifthe veteran doesn’t return to work for you, you don’t need to reinstate him inthe plan, but he will still be entitled to all pension benefits that were vestedbefore the military leave.

Similarly, because pension rights do not mature until the employeereturns to employment, no pension credit accrues if an employee dies in theperformance of his military duties while on military leave. VETS has recom-mended that Congress amend the law to provide that if an employee dies onactive duty while taking military leave, her estate will receive a pension creditfor the period up until her date of death.

Traditional Pension Plans. Defined benefit plans can be either non-contributory, which only the employer funds, or contributory, which both theemployer and employee fund. With a noncontributory plan, you must treat theemployee’s time on military leave the same as if he’d continued to work foryour company, for purposes of accrual and vesting of benefits. You must makeup any missed contributions to the employee’s pension within 30 days afterrehiring him.

If the employee never returns to work for you, you don’t have to makethose missed contributions.

USERRA Protections

9

Employeeswho takemilitary leavecan’t berequired toforfeit anybenefits theyhave accruedunder yourretirementplan.

In contributory defined benefit plans, the rehired employee must beallowed to make up missed contributions required to earn benefit accruals forthe period of military service. If she doesn’t make the payment, she doesn’treceive the benefit accrual. Employees may take up to three times the length ofthe military leave, but no more than five years, to make up contributions. As theveteran makes up payments, you must make up the company’s contributions.

Defined Contribution Plans. With these plans, such as 401(k) plans,returning veterans may make up the income-deferral contributions they couldhave made if they’d remained at work. They also decide which years themakeup contributions cover. As with contributory defined benefit plans, theymay take up to three times the length of the military leave, but no more thanfive years, to pay. As they make up the deferrals, you must make the requiredmatching contributions. If they don’t make up the deferral, they don’t receivea matching contribution.

While on leave, the employee is considered to have been paid a salaryequaling what he otherwise would have received from the employer duringthe period. If that amount is not reasonably certain, the employer may use theemployee’s average compensation during the 12-month period immediatelypreceding the period of military service. The limits on the amount that anemployee may contribute to the plan that apply to the makeup contributionsare those that were in effect when the contribution would have been made,rather than those in effect when the contribution is actually made.

Profit-Sharing or Money-Purchase Pension Plans. Returningveterans are entitled to profit-sharing contributions missed when they were onleave. Employers must make the nonelective contributions that would havebeen made during the military service period. They don’t have to make thecontributions until the employee returns from leave, and may fund makeupcontributions over the same time frame as contributory defined benefit anddefined contribution plans. A rehired employee is not entitled to lost earningson makeup contributions.

Interest in Pension Plan Loans

The USERRA includes special rules for suspending pension-plan loansduring military leave. Loan repayments may be suspended for the length of themilitary leave, longer than the one-year suspension permitted under ordinarycircumstances. The term of the loan also can be extended to include the lengthof the military leave. While the loan is suspended, interest still accrues but it’scapped at six percent. The rehired veteran must repay the full loan amount,including interest accrued during the military service period, by the end of themaximum term for the loan plus the military service period.

Other Benefits

Seniority-Based Benefits. Returning veterans must be restored tothe seniority (along with all rights and benefits associated with it) that theywould have attained with reasonable certainty if they’d remained continuously


10

Returningveterans mustbe restored to

the senioritythat they

would haveattained with

reasonablecertainty.

USERRA Protections

11

employed.43 Seniority benefits are those that employees gain because of passageof time. An example would be vacation leave, which typically increases thelonger an employee remains with a company.

Speaking of vacation leave, you may not force employees to applyaccrued vacation to military leave. If the employee wants to do so, however,you must let him. Otherwise, you must restore all accrued vacation to employ-ees returning to your company from military leave.44

Nonseniority Benefits. Employees on military leave accrue nonse-niority benefits to the same extent they would under your most generous leavepolicy.45 So, for example, if employees who take FMLA leave are allowed toaccrue vacation time, you must also let employees on military leave accrue it.

Employees may waive their right to any nonseniority rights and benefitsthat your company provides by giving you written notice that they don’tintend to return to work. They cannot, however, waive their rights to benefitsthat are based on seniority.46 And remember that you must still rehire them ifthey reapply for employment after their military service is complete.

Final Thoughts on Benefits

Remember that the USERRA is remedial legislation and is inter-preted broadly in order to provide employees with maximum benefits. Fol-lowing the letter of the law may not be enough. Employers should be pre-pared to give employees the benefit of the doubt when it comes tomaintaining and restoring benefits, and work with experienced benefitscounsel to stay on the safe side.

JOB REINSTATEMENT

Eligible employees must be reemployed promptly after they have appliedfor reemployment, which means “as soon as practicable under the circum-stances.”47 Generally, they must be reinstated no more than two weeks aftertheir application, although the time frame may be shorter or longer dependingon the length of military service.

When an employee returns from military duty, you may be faced withthree primary questions:

1. What employees are eligible for reemployment?2. What can you require of them before hiring them back?3. What type of job are they entitled to?

Eligibility for Reemployment

Unlike the USERRA’s discrimination and retaliation provisions, therequirement that employers reemploy returning servicemembers does notapply to employees who held a temporary job that the employee had no rea-sonable expectation would continue for a significant period of time (much less

indefinitely).48 It may, however, apply to other temporary, part-time, proba-tionary, and seasonal employees.

Employers must reemploy eligible employees after their military servicehas ended if they:

• Reapply for employment within certain deadlines specified in theUSERRA, and

• Have taken less than five years total of military leave (but rememberthat, as discussed above in the section “Amount of Leave Required,”certain types of absences and service do not apply toward this five-year limit).

This basically means that even an employee who enlists in the Army andheads off to boot camp can come back and demand a job after completing hisinitial service commitment — which is usually four years.

Exceptions. Employers aren’t required to reemploy employees in anyof the following circumstances:

• If the employee’s discharge from military service was less than honor-able;

• If the employer’s circumstances have so changed that reemployment isimpossible or unreasonable (for example, if the employee’s job waslegally eliminated in a reduction in force); or

• In very limited circumstances, if the employee doesn’t comply withthe Act’s notice requirements.

Notice and Application for Reemployment

Returning servicemembers have to follow specific timetables and pro-cedures when they report back to work. First and foremost, they must giveyou notice that they intend to return to work. The amount of notice requireddepends on how long they were absent due to military service.49

• Up to 30 days absent. For absences of less than 31 days, the employeemay simply report to work, if he does so promptly as defined by theregulations.50 Failure to report to work within the time frames laidout in the regulations may be excused if the employee was unable todo so through no fault of his own.

• 31 to 180 days absent. If the employee’s leave was between 31 and 180days, the employee must apply for reemployment within 14 days aftercompletion of military service.51 If the employee cannot do sothrough no fault of his own, he must submit the application no laterthan the next full calendar day after it becomes possible to do so.

• 181 or more days absent. For absences of more than 180 days, theemployee has 90 days to apply for reemployment.52There is no excuseallowed in the regulations for failing to meet this deadline.

Each of the above deadlines may also be extended if the employee isrecovering from a service-related illness or injury.53

Failure to Comply with Deadlines. It is extremely important tonote that an employee’s failure to comply with the above deadlines may subject


12

Employersaren’t

required toreemploy

employees if the

employee’sdischarge from

militaryservice was

less thanhonorable.

him to discipline under your regular policies and procedures, but does not nec-essarily entitle you to refuse to rehire him.54

Documentation Required. Unless it does not exist or is not readilyavailable, you may require the employee to provide documentation that: 1) thereemployment application is timely, 2) the employee has not exceeded thefive-year limit for USERRA leave, and 3) the employee’s discharge from mili-tary service was not of the type that would disqualify him from reemploy-ment.55 If the documentation is not immediately available, the employer mustrehire the employee, but may terminate that employment if subsequentlyobtained documentation shows that the employee was ineligible for reemploy-ment (such as if he was dishonorably discharged from the military).56

Specific Job Requirements

The trickiest issue for many employers is determining what job theemployee is entitled to, especially if she has been gone for a substantial lengthof time. In general, employees must be reinstated not just to the position theyhad before taking leave, but to the position they would have held if they hadn’ttaken leave. This is commonly referred to as the “escalator” position.

More specifically, the employee must be returned to a job that reflectswith reasonable certainty the pay, benefits, seniority, and other perks that hewould have attained if not for the period of military service.57 If the employeemissed an opportunity for a promotion to a position for which a skills test orsome other form of examination was required, the employer must first placehim in that position then give him a reasonable amount of time to pass the testor examination.58

Exceptions to Escalator Principle. There are some exceptions tothe escalator principle, depending on whether the employee’s leave lasts moreor less than 90 days, whether the employee is qualified to perform the essentialtasks of that position, and whether a service-related disability has rendered himunable to perform the essential tasks of the position.59 The requirements fordisabled employees are discussed in more depth in Section 3.

The following reinstatement options apply to an employee whose mili-tary service lasted less than 91 days (and who does not suffer from a service-related disability):60

• The employee must be reinstated to the escalator position unless he isnot qualified to perform the essential tasks of that position despite theemployer’s reasonable efforts to help him become qualified. Such rea-sonable efforts typically entail providing training or retraining for theposition at no cost to the employee.

• If after reasonable efforts by the employer, the employee is still notqualified to perform the duties of the escalator position, he must bereemployed in the position he held before taking leave. The employermust make reasonable efforts to help him become qualified for thatposition.

• If the employee still is not qualified to perform the duties of theposition he held before taking leave, he may be reemployed in any

USERRA Protections

13

other position that is the nearest approximation of the escalatorposition or, if he cannot become qualified for that position withreasonable help from the employer, the nearest approximation of theoriginal position.

• The employer may decline to reemploy or terminate the employeeonly if he cannot become qualified to perform any of the above posi-tions after reasonable efforts by the employer.61

The following reinstatement options apply to an employee whose mili-tary service lasted 91 days or more (and who does not suffer from a service-related disability):62

• The employee may be reinstated to either the escalator position or toa position of like seniority, status, or pay, but only if he is or canbecome qualified to perform the duties of the position with reason-able help from the employer.

• If the employee is not qualified to perform the duties of either ofthose positions after reasonable efforts by the employer, the employerhas the option of placing him in his original position or a position oflike seniority, status, or pay.

• If in spite of the employer’s reasonable efforts the employee still is notqualified to perform the duties of either his original position or a likeposition, he must be reinstated in any other position that is the nearestapproximation of the escalator position or, if he is not capable of per-forming the duties of that job, the nearest approximation of the orig-inal position.

• The employer may decline to reemploy or terminate the employeeonly if he cannot become qualified to perform any of the above posi-tions after reasonable efforts by the employer.63

Reemployment Position for Disabled Employees. In addition, ifthe employee becomes disabled during military service, the employer mustprovide reasonable accommodations to allow him to perform the escalatorposition, an equivalent position, or the job that most closely approximates thatequivalent position.64 For a more detailed discussion of a disabled employee’srights under the USERRA, see Section 3.

Adverse Application of Escalator Position. Reinstating anemployee to the escalator position does not always mean promoting her. Infact, it is possible for the employee to be reinstated to a lower position or evenbe laid off or fired. In other words, you don’t have to return an employee to aposition that she would not have had if she had been continuouslyemployed.65

Other Job Protections

The USERRA prohibits employers from terminating employeesbecause of their membership in the military or performance of military serv-ice. More specifically, employers are prohibited from firing an employee whohas returned from military leave for any reason other than “for cause” for a


14

It is possiblefor the

employee tobe reinstated

to a lowerposition or

even be laidoff or fired.

USERRA Protections

15

given period of time after their return to work. The duration of this “no ter-mination” requirement depends on the length of the employee’s leave:

• If the employee’s most recent period of military service was morethan 30 days but less than 181 days, she can be discharged only forcause for a period of 180 calendar days after returning to work.

• If the employee’s period of military service was more than 180 days, shecan be discharged only for cause for a full year after returning to work.66

In general, terminating an employee “for cause” means that: 1) theemployee committed some sort of misconduct; or 2) the employee’s positionwas eliminated or the employee was laid off based on the application of legiti-mate nondiscriminatory criteria.67

No Waiver of Rights. The USERRA also provides that no contractmay limit the Act’s protections. In other words, if you terminate an employeewho is protected by the USERRA, you can’t require him to waive any rightshe may have under the USERRA. If you require terminated employees toexecute a general waiver — for example, in return for a severance package —those who are protected by the USERRA will still be able to sue you for anyalleged violations of that law.68 Based on court decisions that have been issuedunder other federal employment laws such as the Age Discrimination inEmployment Act (ADEA), the employee will more than likely be able to keepthe severance you paid in spite of the fact that the waiver was ineffective.

DISCRIMINATION AND RETALIATION

When thinking about USERRA compliance, employers may under-standably focus on the military leave issues. However, it is important not tooverlook the fact that the USERRA also prohibits discrimination on the basisof military service and retaliation for asserting USERRA rights.69 These provi-sions are particularly important because they apply to every step of theemployment relationship, from hiring to firing.

Discrimination

An employee who is denied military leave, reemployment, or any of theother protections relating to leave is not required to prove that the denial wasbased on discrimination. An employer’s failure to comply with those provisionsis enough in itself — without any discriminatory intent — to make it liable.

On the other hand, the USERRA prohibits employers from discrim-inating against employees or job applicants on the basis of military servicein ways that have nothing to do with leave. That includes not only employ-ees’ past military service and current or pending obligations, but also theirintention to join the uniformed services. It is illegal to refuse to hire, reem-ploy (including reemployment in other situations than after USERRAleave), retain, promote, or deny any benefit of employment on the basis ofmilitary service.70


16

The discrimination provision applies to temporary employees, even ifthey don’t have any reasonable expectation that the job will continue for asignificant period of time. (Remember that the Act’s leave, benefits, and reem-ployment provisions do not apply to such temporary employees.) It alsoapplies to job applicants and any employee who suffers an adverse employmentaction if their military service was a motivating factor in the employer’s decision.Even if there are other legitimate factors that led to the decision, the employerwill be liable.

Example

Mayhem Productions is planning a reduction in force. Oneemployee whose job is on the line is Marsha, a member of theNational Guard who will be called to duty in Iraq within sixmonths. Mayhem has to decide whether to eliminate her job orthat of another employee in her department, Cindy. Both aregood employees, but Cindy is a little more versatile and capableof taking on the new tasks and higher workload that will berequired after the reduction in force. On the other hand, Marshais paid less and Mayhem is trying to keep the lower paid employ-ees whenever possible. Because the decision is basically a draw,Mayhem decides to lay off Marsha because it will have to replaceher in a few months anyway (when she leaves for Iraq). That deci-sion is illegal under the USERRA. If, on the other hand, Mayhemwould have made the same decision even without Marsha’s futureservice obligation, then that’s not discrimination.

Retaliation

The USERRA’s retaliation provision protects an even broader classof persons than the discrimination provision. In general, it prohibitsemployers from retaliating against any individual — whether they are anemployee or not and whether they are a civilian or a veteran — for: 1) exer-cising their USERRA rights; or 2) assisting in an investigation of allegedUSERRA violations.71 As with the discrimination provision, this provisionalso applies to temporary employees, whether they have a reason to expectcontinued employment or not.

One area that employers should keep a particular eye out for is when anemployee is repeatedly absent due to National Guard training and other mili-tary duties. More than one employer has learned the hard way that situationslike that can breed resentment in coworkers and even supervisors.72 Supervi-sors who vent about the inconvenience of losing a worker to the military mayhave their words used against them. Employers need to make sure that suchresentment does not cross the line into retaliation.

So training your supervisors is essential. Make sure they understand thatthe USERRA has teeth . . . including the fact that they could be held individ-ually liable for any violations.

POLICIES AND PROCEDURES

If you don’t have a policy addressing an employee’s rights when he leavesyour company to join or serve in the military, then now is the time to get one.The USERRA is a complicated statute, but any good policy should address atleast the following issues:

• Protected leave — The USERRA protects the jobs and benefits ofemployees who are called to active duty, as well as those who needoccasional leave to comply with their military obligations, such asweekend or week-long training sessions.

• Newly enlisted employees — The USERRA also requires you to reem-ploy those who quit their job to voluntarily enlist in the military (forup to five years).

• Rights during leave — When an employee is on protected militaryleave, he retains a variety of rights regarding his employee benefits.You need policies and procedures to make sure those rights areobserved and protected.

• Employees’ rights when they return — When an employee returns frommilitary duty, you must take her back if she reapplies for a job withincertain deadlines. You need policies to make sure that happens andthe proper procedures are observed.

• Required notices — You are required to give employees notice of theirrights under the USERRA. In return, they are required to give youcertain notices when they take and return from military leave.

• Discrimination and retaliation — Your USERRA policy should specifi-cally state that you do not discriminate against employees or jobapplicants because of their past or current military service or futuremilitary obligations.

• State law — You should also include provisions regarding any militaryleave requirements imposed by your state law.

We have included a sample military leave policy as Appendix A.

Required Posters

The Veterans Benefits Improvement Act, passed in December 2004,requires employers to inform employees who are called into military service oftheir rights and benefits under the USERRA. It requires employers to eitherplace an informative poster where you customarily place such notices foremployees or provide the notice in other ways, such as by handing out, mailing,or e-mailing it to employees. The DOL’s website provides two separate postersthat private and state employers73 and federal executive agencies74 may use tosatisfy this requirement.

USERRA Protections

17

ENFORCEMENT AND LITIGATION

VETS is responsible for interpreting and enforcing the USERRA.75

That includes providing assistance to employees and employers alike withcompliance matters.

VETS is also responsible for investigating USERRA complaints filed byemployees with the DOL.76 It received 1,357 formal USERRA complaints in2006, the most recent year for which charge statistics are available.77 The actualnumber of complaints or inquiries, however, is probably much higher, for acouple of reasons:

• The DOL does not keep track of the number of informal complaintsor inquiries it receives; and

• Some employees choose to bypass the VETS process altogether andsue their employer directly for USERRA violations.

In fact, according to one source, more than 16,000 informal and formalUSERRA complaints were filed with VETS between fiscal years 2004 and 2006.

If it determines after investigation that an employer has violated theUSERRA, VETS is required to make “reasonable efforts” to obtain voluntarycompliance. If such efforts are unsuccessful, the next step in the process is for thecomplaint to be referred to either the Attorney General (for private and stateemployers) or the Office of Special Counsel (for federal executive agencies).

However, unlike many other federal employment laws, employees arenot required to file a complaint with the DOL before suing their employer forUSERRA violations. They may choose to sue the employer in federal courtwithout the participation or knowledge of the DOL. In addition, even if theemployee does initially pursue a complaint with VETS, he may later decide tofile a private lawsuit. That is true even if VETS finds no merit in the complaintor the Attorney General declines to pursue litigation on the employee’s behalf.

Damages, Penalties, and Other Relief

Employers that are found to have violated the Act may be ordered toreinstate the employee and pay:

• Lost wages;• Lost benefits (or restore them);• An additional amount equal to the amount of lost wages and benefits

as liquidated damages for willful violations; and• The employee’s reasonable attorney fees, expert witness fees, and

other costs of litigation.78

Statute of Limitations

Although the USERRA does not have a statute of limitations, at leastone court has applied the four-year federal statute of limitations to theUSERRA.79 The VETS has suggested that Congress amend the USERRA toclarify that there is no statute of limitations for USERRA violations.


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Employees arenot required

to file acomplaint

with the DOLbefore suing

their employerfor USERRA

violations.

Employment law attorney Julie Athey has written numerous pub li cationsfor human resources professionals, including Overtime Revisited: TheDOL’s Final Regulations and How to Fire Employees Without GettingBurned. She graduated with honors from the University of Tulsa Col-lege of Law, where she was an editor of the Energy Law Journal. She alsoobtained her undergraduate degree in English, cum laude, from the Uni-

versity of Tulsa. Her excellent legal and editorial skills have made her one ofthe most popular authors of M. Lee Smith Publishers LLC resources.

About the Author

65

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