Business owners join workers in mobilizing for war
By Kay Bell • Bankrate.com

The call-up of thousands of National Guard members and reservists has forced America's businesses to also mobilize as they confront the immediate workplace effects of losing personnel to military duty.

Those rules are detailed in the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), the law that governs military leaves of absence and re-employment of eligible workers when they return from mandated military service. Since USERRA grants significant rights to workers, employment law specialist Joy Waltemath's first piece of advice to companies is to be very careful.

"Employers need to know the law," says Waltemath, a legal analyst with CCH, Incorporated, a national provider of human resources and employment law information. "It's a statutorily mandated leave of absence. All size companies are covered and they need to pay attention to the requirements."

Familiar law, new circumstances
This probably is not the first contact with USERRA for many companies. Probably most had already followed its guidelines when workers fulfilled routine National Guard and Reserve duties. Many of these same workers also may have left jobs to serve during the Gulf War.

But two things have changed since the terrorist attack, notes Waltemath. There is the likelihood for much less call-up notice, she says, and the length of service for employees could be much longer.

As companies prepare for potential war-related employee absences, here are some of the most common employer concerns regulated by USERRA:

Notification: Workers must give employers advance notice of the call to active duty. The notification also may come from one of the services uniformed officers. Regardless, the notice doesn't have to be written and there is no strict definition of "timely notification" under USERRA. "If a worker is activated tonight and has to leave tomorrow," says Waltemath, "all they're going to get is a phone call."

Length of leave: Once notified, employers must place a worker on a military leave of absence or other appropriate type of leave for uniformed service duty. This job-protected leave can be as long as five years, which is a cumulative total of military service while with a single civilian employer. "If you've been with one employer for 20 years and took one year to serve in the Gulf War, you have only four years [protected by USERRA] left," says Waltemath.

Pay during military leave: Employers are not required to pay workers who are serving in the military. In non-combat times, some companies do pay reservists the difference between their regular wages and the military compensation received during routine training. Employers also should check with state labor departments, as all have military leave laws and some may include additional pay requirements for employees during active duty.

Vacation benefits: USERRA allows employees on military leave to use any vacation or similar leave with pay that they accrued prior to being activated. But that decision is solely the employee's choice, notes Waltemath. Employers cannot require workers to use vacation time toward military leave.

Health benefits: If your firm provides health care to workers, then National Guard and Reservists who are called up must be allowed to purchase COBRA-like health benefits while they are in the service. COBRA, the 1986 Consolidated Omnibus Budget Reconciliation Act, requires companies to allow former employees and their dependents to pay for continued insurance coverage for up to 18 months. Companies with fewer than 20 employees are exempt from COBRA, but Waltemath points out that USERRA overrides this exception. Even very small companies must offer health care continuation options for Reservists or National Guard members called to active service. If your firm does not provide any employee health care benefits, you are under no obligation to provide them for uniformed service absences.

Pension benefits: USERRA requires that returning service members must be treated as if they had been continuously employed for pension purposes, regardless of the type of pension plan. This applies to vesting as well as the benefit computation method. And a returning employee must be allowed to contribute to the company pension plan any amount that would have been contributed if he or she had not been called to military duty. If the company's matching portion is contingent on the employee's contribution, then the employee must make his or her contribution before the employer is obligated to make a contribution.

Replacement employees: You may legally fill vacancies left by employees on military leave. But, says Waltemath, under USERRA you may have to bump the replacement staff when reservists come back to work.

Re-employment: Upon completion of military service, USERRA generally requires a firm to "promptly" rehire workers who make "timely application" for their previous jobs. The reinstatement must be without any loss of seniority or benefits. What constitutes prompt rehiring depends on individual circumstances. For example, a worker returning after three years of service might not be at his former job until the person currently holding it is given reasonable notice of the change.

And, notes Waltemath, USERRA does provide a safe harbor for employers when it comes to rehiring former workers. "Re-employment rights exist as long as there was not significant change in the employer's status," she says. Significant change includes:

• Changed circumstances in the business. In this case, rehiring the person would be impossible or unreasonable, such as when a reduction-in-force would have included the individual regardless of military duty.
• Undue hardship on the business. Employers are excused from rehiring returning service members, or from accommodating those who sustained disabilities during service, when the difficulty or expense would cause "undue hardship." This exemption is essentially the same as under the Americans with Disabilities Act.
• The job was brief and nonrecurring. USERRA says re-employment is not required if the vacated position was one created for a brief and nonrecurrent period. This includes jobs that could not reasonably be expected to continue indefinitely, regardless of the military service.

In each of these cases, the employer has the burden of proving, not simply asserting, that the company would suffer if the returning service person is rehired.

The U.S. Department of Labor, through the Veterans' Employment and Training Service (VETS), administers USERRA. The Department has a special Web site that provides time-frame specifics and interactive questions regarding the rehiring of military service workers.

-- Posted: Sept. 20, 2001