Understanding the Rights and Obligations Of Your Military Reservist Employees

In order to trigger USERRA's reemployment requirement, an employee on military leave generally must reapply for employment upon return from active duty. See 38 U.S.C. '4312 (e)(1)(C), (e)(1)(D). Once the employee does so, a number of obligations may arise for the employer and the returning employee.

Timing of Application for Reemployment. Employees desiring reemployment after military service are required to return to work or apply for reemployment in a timely manner, based on the length of military service as follows: (See table below)

Length of Service Time to Apply for Reemployment. Less than 31 days Must report to work (no need to apply for reemployment) by start of next regularly scheduled work period following duty (allowing for time to return home safely). If it is impossible or unreasonable for the employee to report to work within this time frame, through no fault of the employee, the employee must report following expiration of an eight-hour period after the period needed for safe return home. 38 U.S.C. '4312(e)(1)(A). 31 to 180 days Application for reemployment must be submitted no later than 14 days after completion of service. 38 U.S.C. '4312(e)(1)(C). 181 days or more Application for reemployment must be submitted no later than 90 days after completion of service. 38 U.S.C. '4312(e)(1)(D).

The statute does not require that an application, where necessary, be in writing. In addition, for employees suffering a service-related injury or illness, the reporting or application deadlines may be extended for up to two years during periods of hospitalization or convalescence. See 38 U.S.C. '4312 (e)(2)(A).

In most cases, an individual may be absent from work for military duty for a cumulative period of up to 5 years and still retain reemployment rights. See 38 U.S.C. '4312(c). Employees whose initial enlistment lasts more than 5 years, those who are called to active duty during emergencies or war, and those who require additional training may be absent from work for longer periods. See 38 U.S.C. '4312(c)(1), (c)(3), (c)(4)(B).

Documentation May Be Required. Upon request, employees returning from duty must present their employers with documentation establishing that they have timely applied for reemployment, have not exceeded the service limitations of the statute, and have not been dishonorably discharged. See 38 U.S.C. '4312(f)(1). However, an employer may not delay or refuse reinstatement based on a demand for documentation that is not readily available. See 38 U.S.C. '4312(f)(3)(A), (f)(4). Rather, the employer should reinstate the employee and, if later documentation shows that the employee did not qualify for reinstatement, terminate the employment. See 38 U.S.C. '4312 (f)(3)(A).

Position to Which Employee Must Be Restored. USERRA attempts to restore covered employees to positions of employment equivalent to those they would have held absent their military service ' as if they had been on an escalator. See Non-Technical Resource Guide to USERRA, at 7. Thus, USERRA requires that an employee returning from military service be reinstated, to the extent possible, to a position with the same seniority, status and pay as he would have attained had he not been absent for military duty. See 38 U.S.C. '4313(a)(1)-(3). For example, if a returning employee would have, with reasonable certainty, been promoted but for his or her military service, then the employee should receive the promotion upon his or her return. See Non-Technical Resource Guide to USERRA, at 7. Significantly, the fact that another employee may have been selected for the position during the interim does not relieve an employer of this obligation.

If a returning service person is not qualified for the position he or she would have held absent military service, he or she may be returned to his or her former position or one that is reasonably equivalent. See 38 U.S.C. '4313(a)(1)(B), (a)(2)(B), (a)(3), (a)(4). In such cases, USERRA generally requires reasonable efforts, such as training or retraining, to enable the returning employee to refresh or upgrade his skills. See Id.; 38 U.S.C. '4303(10); Non-Technical Resource Guide to USERRA, at 8. If a qualification for reinstatement is an external or legal one such as certification or licensing, however, it is the employee's responsibility to attain such qualification, and the employer has no duty to promote until the qualification is met. See 38 U.S.C. '4313(a)(4).

Consequences of Failure to Reapply with Employer. If an employee fails to report back to work or to submit an application for reemployment in a timely manner, he or she cannot be treated less favorably because of his or her service in the uniformed services than other employees who are absent from work. Thus, an employee who fails to report or apply for work within the required time does not automatically forfeit reemployment rights, but rather is subject to the employer's regular policy and procedure with respect to explanations and discipline regarding absences from scheduled work. See 38 U.S.C. '4312(e)(3).

Treatment of Vacation Upon Return. Employees on military duty are not entitled, in most circumstances, to accrue vacation, but, upon return, will be entitled to the vacation accrual rate they otherwise would have received had they not served in the military. See 38 U.S.C. ”4316(a), (b)(1)(B), 4303(2). For example, if an employee's vacation entitlement increases from 2 to 3 weeks after 5 years of employment, and the employee would have reached 5 years of service but for being called to duty, upon return the employee is entitled to 3 weeks of vacation, not 2.

Pay Raises. Service members are entitled to any 'across-the-board' pay raises granted during the absence for military service to the extent such raises can be viewed as based on seniority or length of service. See 38 U.S.C. '4316(a).

Accordingly, law firm employers must consider carefully whether 'merit' increases are given so regularly that they might be considered seniority-based. If so, returning service members should have their pay rates adjusted accordingly. Similarly, if pay raises are based on both seniority and merit, returning service members should receive, at a minimum, the seniority-based part of the raise. Reservists in managerial or professional positions whose pay varies on an individual basis should be restored to their preservice pay rates, adjusted for any general or cost-of-living increases during their absence.

Health Plans. Upon return from service, health insurance coverage must be reinstated without any waiting period or exclusions for preexisting conditions, other than waiting periods or exclusions that would have applied if there had not been a military absence. See 38 U.S.C. '4317(b)(1). Injuries or illnesses incurred in the line of duty may be excluded, however, from coverage by the employer's health plan. See 38 U.S.C. '4317(b)(2).

Pension Plans. USERRA also requires that returning service members be treated as if they had been continuously employed for pension purposes. See 38 U.S.C. '4318(a)(2)(A).

Thus, an employee should receive credit for benefit accrual and vesting purposes for the period of military service. See 38 U.S.C. '4318(a)(2)(B). In addition, if employee contributions were allowed under a plan (such as a 401(k) plan), upon returning to employment the employee must be allowed to 'make up' any contributions that he could have made if he had not been called to military service. See 38 U.S.C. '4318(b)(2). Upon making up such contributions, the employee will be entitled to be credited with any 'matching' or other employer contributions that were contingent upon employee contributions, based on the rate of such contributions in effect for the period(s) to which the make-up contributions relate. See 38 U.S.C. '4318(b).

General Nondiscrimination Rules

An employer may not discriminate against members of the uniformed services with respect to initial employment, reemployment, retention, promotion, or any other employment benefit on the basis of their military obligations. See 38 U.S.C. '4311(a)-(b); see also, 38 U.S.C. '4301(a)(3). Where an employee is called to duty, the nondiscrimination provisions of USERRA require that he or she not be terminated, except for cause, during a readjustment period following the return to work. See 38 U.S.C. '4316(c). If an employee's absence was for a period of service of more than 180 days, the employee may not be terminated without cause for one year from the date of reemployment. See 38 U.S.C. '4316(c)(1). For periods of service of 31-180 days, the employee may not be discharged without cause for a period of 180 days after the date of reemployment. See 38 U.S.C. '4316(c)(2). For a period of service of 30 days or less, there is no special cause requirement for termination. Nevertheless, as a practical matter, an employer must still be prepared to articulate a reason for a termination in order to avoid an inference that it was in retaliation for the employee taking protected leave. See 38 U.S.C. '4311(c)(1) ('An employer shall be considered to have [violated USERRA where] ' service in the uniformed services is a motivating factor in the employer's action, unless the employer can prove that the action would have been taken in the absence of such [service]').

Effect of USERRA On Other Laws

USERRA does not supersede or diminish any other federal, state or local laws, or any contracts, agreements, or policies, that establish greater or more generous rights for employees to take leaves of absence or receive benefits based on service in the uniformed services. See 38 U.S.C. '4302(a). Thus, employers must consider the effect of any applicable state laws on employees called to military service.

Department of Labor Website

The Department of Labor has established a Web site to inform employers and employees of their rights and obligations under USERRA. The site may be accessed at www.dol.gov/dol/vets.

Karl G. Nelson is a partner in the Dallas office of Gibson, Dunn & Crutcher LLP, where he practices in the firm's labor and employment practice group. This article additionally reflects the substantial contributions of Pamela L. Hemminger, Michael J. Collins and Marshall J. Lerman.

Part 2 of 2

Last month, the authors provided background on the Uniform Services Employment and Reemployment Rights Act of 1994 (USERRA) and employee entitlements under the Act. This month, analysis of the Act concludes with a look at reemployment rights upon the employees' return and USERRA's effect on other laws.

Reemployment Rights Upon Return

In order to trigger USERRA's reemployment requirement, an employee on military leave generally must reapply for employment upon return from active duty. See 38 U.S.C. '4312 (e)(1)(C), (e)(1)(D). Once the employee does so, a number of obligations may arise for the employer and the returning employee.

Timing of Application for Reemployment. Employees desiring reemployment after military service are required to return to work or apply for reemployment in a timely manner, based on the length of military service as follows: (See table below)

Length of Service Time to Apply for Reemployment. Less than 31 days Must report to work (no need to apply for reemployment) by start of next regularly scheduled work period following duty (allowing for time to return home safely). If it is impossible or unreasonable for the employee to report to work within this time frame, through no fault of the employee, the employee must report following expiration of an eight-hour period after the period needed for safe return home. 38 U.S.C. '4312(e)(1)(A). 31 to 180 days Application for reemployment must be submitted no later than 14 days after completion of service. 38 U.S.C. '4312(e)(1)(C). 181 days or more Application for reemployment must be submitted no later than 90 days after completion of service. 38 U.S.C. '4312(e)(1)(D).

The statute does not require that an application, where necessary, be in writing. In addition, for employees suffering a service-related injury or illness, the reporting or application deadlines may be extended for up to two years during periods of hospitalization or convalescence. See 38 U.S.C. '4312 (e)(2)(A).

In most cases, an individual may be absent from work for military duty for a cumulative period of up to 5 years and still retain reemployment rights. See 38 U.S.C. '4312(c). Employees whose initial enlistment lasts more than 5 years, those who are called to active duty during emergencies or war, and those who require additional training may be absent from work for longer periods. See 38 U.S.C. '4312(c)(1), (c)(3), (c)(4)(B).

Documentation May Be Required. Upon request, employees returning from duty must present their employers with documentation establishing that they have timely applied for reemployment, have not exceeded the service limitations of the statute, and have not been dishonorably discharged. See 38 U.S.C. '4312(f)(1). However, an employer may not delay or refuse reinstatement based on a demand for documentation that is not readily available. See 38 U.S.C. '4312(f)(3)(A), (f)(4). Rather, the employer should reinstate the employee and, if later documentation shows that the employee did not qualify for reinstatement, terminate the employment. See 38 U.S.C. '4312 (f)(3)(A).

Position to Which Employee Must Be Restored. USERRA attempts to restore covered employees to positions of employment equivalent to those they would have held absent their military service ' as if they had been on an escalator. See Non-Technical Resource Guide to USERRA, at 7. Thus, USERRA requires that an employee returning from military service be reinstated, to the extent possible, to a position with the same seniority, status and pay as he would have attained had he not been absent for military duty. See 38 U.S.C. '4313(a)(1)-(3). For example, if a returning employee would have, with reasonable certainty, been promoted but for his or her military service, then the employee should receive the promotion upon his or her return. See Non-Technical Resource Guide to USERRA, at 7. Significantly, the fact that another employee may have been selected for the position during the interim does not relieve an employer of this obligation.

If a returning service person is not qualified for the position he or she would have held absent military service, he or she may be returned to his or her former position or one that is reasonably equivalent. See 38 U.S.C. '4313(a)(1)(B), (a)(2)(B), (a)(3), (a)(4). In such cases, USERRA generally requires reasonable efforts, such as training or retraining, to enable the returning employee to refresh or upgrade his skills. See Id.; 38 U.S.C. '4303(10); Non-Technical Resource Guide to USERRA, at 8. If a qualification for reinstatement is an external or legal one such as certification or licensing, however, it is the employee's responsibility to attain such qualification, and the employer has no duty to promote until the qualification is met. See 38 U.S.C. '4313(a)(4).

Consequences of Failure to Reapply with Employer. If an employee fails to report back to work or to submit an application for reemployment in a timely manner, he or she cannot be treated less favorably because of his or her service in the uniformed services than other employees who are absent from work. Thus, an employee who fails to report or apply for work within the required time does not automatically forfeit reemployment rights, but rather is subject to the employer's regular policy and procedure with respect to explanations and discipline regarding absences from scheduled work. See 38 U.S.C. '4312(e)(3).

Treatment of Vacation Upon Return. Employees on military duty are not entitled, in most circumstances, to accrue vacation, but, upon return, will be entitled to the vacation accrual rate they otherwise would have received had they not served in the military. See 38 U.S.C. ”4316(a), (b)(1)(B), 4303(2). For example, if an employee's vacation entitlement increases from 2 to 3 weeks after 5 years of employment, and the employee would have reached 5 years of service but for being called to duty, upon return the employee is entitled to 3 weeks of vacation, not 2.

Pay Raises. Service members are entitled to any 'across-the-board' pay raises granted during the absence for military service to the extent such raises can be viewed as based on seniority or length of service. See 38 U.S.C. '4316(a).

Accordingly, law firm employers must consider carefully whether 'merit' increases are given so regularly that they might be considered seniority-based. If so, returning service members should have their pay rates adjusted accordingly. Similarly, if pay raises are based on both seniority and merit, returning service members should receive, at a minimum, the seniority-based part of the raise. Reservists in managerial or professional positions whose pay varies on an individual basis should be restored to their preservice pay rates, adjusted for any general or cost-of-living increases during their absence.

Health Plans. Upon return from service, health insurance coverage must be reinstated without any waiting period or exclusions for preexisting conditions, other than waiting periods or exclusions that would have applied if there had not been a military absence. See 38 U.S.C. '4317(b)(1). Injuries or illnesses incurred in the line of duty may be excluded, however, from coverage by the employer's health plan. See 38 U.S.C. '4317(b)(2).

Pension Plans. USERRA also requires that returning service members be treated as if they had been continuously employed for pension purposes. See 38 U.S.C. '4318(a)(2)(A).

Thus, an employee should receive credit for benefit accrual and vesting purposes for the period of military service. See 38 U.S.C. '4318(a)(2)(B). In addition, if employee contributions were allowed under a plan (such as a 401(k) plan), upon returning to employment the employee must be allowed to 'make up' any contributions that he could have made if he had not been called to military service. See 38 U.S.C. '4318(b)(2). Upon making up such contributions, the employee will be entitled to be credited with any 'matching' or other employer contributions that were contingent upon employee contributions, based on the rate of such contributions in effect for the period(s) to which the make-up contributions relate. See 38 U.S.C. '4318(b).

General Nondiscrimination Rules

An employer may not discriminate against members of the uniformed services with respect to initial employment, reemployment, retention, promotion, or any other employment benefit on the basis of their military obligations. See 38 U.S.C. '4311(a)-(b); see also, 38 U.S.C. '4301(a)(3). Where an employee is called to duty, the nondiscrimination provisions of USERRA require that he or she not be terminated, except for cause, during a readjustment period following the return to work. See 38 U.S.C. '4316(c). If an employee's absence was for a period of service of more than 180 days, the employee may not be terminated without cause for one year from the date of reemployment. See 38 U.S.C. '4316(c)(1). For periods of service of 31-180 days, the employee may not be discharged without cause for a period of 180 days after the date of reemployment. See 38 U.S.C. '4316(c)(2). For a period of service of 30 days or less, there is no special cause requirement for termination. Nevertheless, as a practical matter, an employer must still be prepared to articulate a reason for a termination in order to avoid an inference that it was in retaliation for the employee taking protected leave. See 38 U.S.C. '4311(c)(1) ('An employer shall be considered to have [violated USERRA where] ' service in the uniformed services is a motivating factor in the employer's action, unless the employer can prove that the action would have been taken in the absence of such [service]').

Effect of USERRA On Other Laws

USERRA does not supersede or diminish any other federal, state or local laws, or any contracts, agreements, or policies, that establish greater or more generous rights for employees to take leaves of absence or receive benefits based on service in the uniformed services. See 38 U.S.C. '4302(a). Thus, employers must consider the effect of any applicable state laws on employees called to military service.

Department of Labor Website

The Department of Labor has established a Web site to inform employers and employees of their rights and obligations under USERRA. The site may be accessed at www.dol.gov/dol/vets.

Karl G. Nelson is a partner in the Dallas office of Gibson, Dunn & Crutcher LLP, where he practices in the firm's labor and employment practice group. This article additionally reflects the substantial contributions of Pamela L. Hemminger, Michael J. Collins and Marshall J. Lerman.