Employers' obligations to staff serving in the military.

The recent war with Iraq resulted in many employees temporarily leaving their civilian jobs for military service. The federal Uniformed Services Employment and Reemployment Rights Act of 1994 provides a minimum baseline of rights for such employees. In addition, state law and employer policies and benefit plans may provide more generous benefits. In this article, Joyce Oliner provides a brief summary of the obligations of civilian employers, including associations, with respect to their employees who may be called to military duty. Employers should carefully review their policies and benefit plans to determine the full extent of their obligations.

The Uniformed Services Employment and Reemployment Rights Act (USERRA) is a federal law that was enacted in 1994 to strengthen the civilian employment rights of individuals serving in the military. The act protects any service member serving in the U.S. uniformed services: Army, Navy, Air Force, Marines, Coast Guard, commissioned corps of the Public Health Service, the reserves of the foregoing services, and the Army and Air National Guards. Service is defined as the performance of duties, whether voluntary or involuntary, in the uniformed services. It includes active duty; active duty for training; initial active duty for training; inactive duty training (for example, the two-week annual training period and monthly weekend drills required for reservists and members of the National Guard); full-time National Guard duty; and absence from work for an examination to determine fitness for the foregoing types of duty.

The act also prohibits employers from discriminating against an individual because of his or her past, present, or future military service obligations. The prohibition against discrimination is broad. It covers (but is not limited to) hiring, promotion, re-employment, termination, and benefits.

Protections provided by USERRA

The act provides a number of protections and guidelines.

Salary and benefit considerations. While USERRA does not require employers to pay employees who are on military leave, employee benefits that are not based on seniority must be provided to the extent that they are provided to employees on nonmilitary types of leave. An employer may not require an employee on military leave to take paid vacation during such leave, although an employee must be permitted to use during military leave any vacation he or she accrued as of the start of such leave.

Health insurance details. The service member may elect to continue coverage under the employer's group health plan for up to 18 months, beginning with the first day of the military leave. The employer can charge up to 102 percent of the full premium for the coverage. This right to continued coverage is independent of any insurance continuation rights that the Consolidated Omnibus Budget Reconciliation Act provides, and, further, does not contain the small-employer exception set forth in COBRA. Therefore, an employer is subject to the continued coverage right even if the employer is not subject to COBRA.

If the service member's period of military service is fewer than 31 days, the employer must provide any group health care coverage as if the service member had been continually employed. Service members who return to employment must be immediately reinstated in the employer's health plan, generally without waiting-period or pre-existing condition exclusions.

Retirement plan rules. For both defined contribution and defined benefit retirement plans:

* The service member must not be treated as having incurred a break in service.

* The period of military leave must be considered as employer service for purposes of vesting and benefit accrual.

* The employer must make contributions to the plan as if the service member was not on military leave. Compensation for such contributions is based on the compensation that the service member would have earned if it were not for the military leave.

If the retirement plan permits employee contributions, a re-employed service member may make make-up contributions during a period of time equal to three times the period of military service (but not to exceed five years). Matching contributions must be made by the employer once the make-up contributions are concluded.

Employee re-employment rights. A civilian employer will have a re-employment obligation with respect to any individual who satisfies the following criteria:

1. The individual held a civilian job with the employer immediately prior to the military leave.

2. The individual provided advance notice of the military leave to the civilian employer, if possible.

3. The individual's cumulative military leave did not exceed five years (with certain exceptions related to national emergencies, war, and mandatory training periods, among others).

4. The individual was honorably released from military service.

5. The individual reported back to his or her civilian employer in a timely manner, with deadlines for returning to work determined by the length of military service.

Employer's re-employment obligations

A returning employee must be promptly reinstated in the position that he or she would have held if employment had not been interrupted for the military leave. In addition, the escalator principle requires that the returning employee receive the benefit of any increase in seniority that would have resulted had the employee remained on the job during the period of military leave.

An employer must make reasonable efforts to qualify a returning employee for the job. If such efforts are not sufficient, the employer must offer the individual the position that he or she held immediately prior to the military leave (or a position of like seniority, status, and pay if the period of military service is greater than 90 days). If the individual is not qualified for this position after reasonable employer efforts, the employer must offer the individual the position in terms of pay, seniority, and status that is closest to the position he or she would have held if it had not been for the period of military leave. An employer must also make reasonable accommodations for an individual who has suffered a disability during military leave.

Under a limited exception, employers do not have an obligation to re-employ an individual after military leave if circumstances have changed such that the reemployment would be impossible or unreasonable. The need to bump an incumbent to make room for a returning service member generally will not qualify the employer for this narrow exception.

Termination issues

One rule that employers often overlook is that a service member who returns to civilian employment cannot be terminated (except for cause) for one year if that individual's military service totaled more than 180 days. While USERRA does not define cause, its legislative history and relevant case law indicate that, at a minimum, it must be reasonable to terminate the employee for the conduct deemed to be grounds for termination and that the individual had fair notice, expressly or fairly implied, that such conduct would be grounds for discharge. The protection from discharge without cause lasts for 180 days if the military service totaled more than 30 days but fewer than 181 days.

If an association employs someone who is called into military service, it is wise to review USERRA, as well as state law and the association's own employment policies and benefit plans, to understand the extent of the organization's obligations to that individual.

Joyce L. Oliner is a partner of the Employment Group and Jerald A. Jacobs is a partner in the Nonprofit Organizations Practice of the law firm of Shaw Pittman, Washington, D. C Jacobs edits this column and is general counsel to ASAE.