Companies, small and large, could be faced with the issue of having to accommodate employees who are called to military duty. USERRA was enacted by Congress in 1994 to establish employers’ obligations and to assist employers and their employees in the transition to military service and back. Following are some of the highlights of the Act:
The employee must provide advance notice to the employer of his/her intent or obligation to serve in the Army, Navy, Air Force, Marines or the Coast Guard, as well as the Reserves, the Army and Air National Guards or the commissioned corps of the Public Health Service. (Independent contractors are not covered because they do not have an employer.)
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Employers cannot discriminate against or punish an employee for seeking to serve or serving in the armed forces. They must let the employee serve.
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Employees continue to accrue seniority and any rights or benefits they would have received had they remained employed continuously.
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Departing service members must be treated as though they are on a leave of absence.
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When departing for military service, an employee who clearly states that s/he has no intention of returning to work for the employer, waives his/her entitlements. The employer must, however, make the employee aware of the specific rights and benefits that will be lost.
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Service members shall be required to pay employee costs (similar to those on nonmilitary leaves of absence).
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USERRA provides for the continuation of health benefits, even if their employers are not covered by COBRA. Employees can elect to continue health benefits for up to 18 months. As is true with COBRA, the employee can be required to be responsible for up to 102% of the full premium. A waiting period or exclusion cannot be imposed when the employee returns to work.
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The employee must apply for reemployment within a specified period following service, depending on the length of the service.
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The employer must hold the employee’s position open – or one of similar seniority, status and pay – subject to the employee’s receiving an honorable discharge. When a service member is reemployed, it is important to note that an employer can only fire that employee for cause, and after a period of time based upon the term of the leave.
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For the purpose of pension plans, defined benefits plans, defined contribution plans and profit sharing plans, the following provisions are made under USERRA:
a. A reemployed person must be treated as not having had a break in service;
b. Military service must be considered service with the employer for vesting and benefit accrual purposes;
c. The employee is entitled to any accrued benefits from any contributions s/he repays (makes up after the fact) to the plan. Repayment of employee contributions can be made over a period of time that is equivalent to three times the length of the service, up to a maximum of five years. The employee’s ability to contribute is based on the rate of pay the employee would have made (or, if the employee was not on a fixed rate, the average compensation of the twelve-month period just prior to the leave);
d. The employer is responsible for funding its matching obligation over a comparable period.
A few other suggestions: Employees should update their wills, establish powers of attorney and review their listed beneficiaries on all pertinent plans and policies. Note that many life insurance and disability policies do not pay benefits for war-related injuries.
For other information, valuable resources include:
The National Committee for Employer Support of the Guard and Reserve, 800-336-4590 (or www.esgr.org); the US Department of Labor, www.dol.gov/asp/programs/handbook/userra.htm and www.elaws.dol.gov/userra; and the US Small Business Administration (which makes Military Reservist Economic Injury Disaster Loans), 800-488-5323 or https://www.sba.gov/funding-programs/disaster-assistance.
