Article Categories Advertising, Marketing & Trademark Antitrust and Trade Regulation Bank & Finance China Construction Corporate & Securities Employment & Labor Energy Family Law Government Relations Health Law Immigration Intellectual Property Internal Investigations International Internet, Technology &
E–Commerce Life Sciences Litigation Non-Competes & Trade Secrets Real Estate Shareholder Disputes Tax Planning & Business Organization Trusts & Estates White Collar & Regulatory Defense
 
Article Search

Employment & Labor

Printable Version

Updated Information About Military Leaves

January 2006

The federal Department of Labor’s Veterans Employment and Training Service (VETS) recently published final regulations implementing the “Uniformed Services Employment and Reemployment Rights Act” (USERRA). USERRA is the 1994 federal law that establishes rights and benefits for employees called to military service.

What’s New?

1.  How do employees learn of their USERRA rights?

With the final regulations, VETS issued an updated poster informing employees of their USERRA rights. Employers should post the new poster with other federal and state required postings. Click here for a copy. This new poster is different from the USERRA poster that was required as of March 15, 2005, which is now outdated.

2.  When must an employee on military leave elect continued coverage under group health, life and/or dental plans in which the employee participates?

The final regulations continue to give employees who participate in group health, life and/or dental plans the right to continue coverage under such plans while on military leave. If the leave is for fewer than 31 days, the employee may only be required to pay the employee’s usual share of the premium for coverage. If the leave is for 31 days or more, the employee can be required to pay the full cost of coverage plus a two percent administration fee. An employee must be immediately reinstated to such plans upon reemployment following military service without any waiting period or exclusion whether or not continuation coverage was elected.

The final regulations provide that plan administrators may set forth reasonable requirements addressing the time period for employees going on military leave to elect continued health coverage and to pay the required premiums. While the regulations do not define “reasonable,” if no time period is defined, the employer will be required to retroactively reinstate continuation coverage for up to 24 months from an employee’s first day on leave if the employee elects coverage and retroactively pays the full premiums during that time. This is a much longer period than employers would otherwise be required to allow under COBRA. Employers are encouraged to update their plan documents accordingly.

What Stays the Same?

1.   When are employees entitled to military leave?

Under USERRA, employers of all sizes are obligated to allow employees time off for voluntary or involuntary duty in the uniformed services. This includes active duty, active and inactive duty for training, National Guard duty under Federal statute, and any absence for a fitness-for-duty examination. It also includes absence to perform funeral honors duty. During uniformed service, the employee is deemed to be on a furlough or leave of absence from the civilian employer.

In addition to USERRA, Minnesota law requires employers to allow employees time off when called to active duty by the proper authority in any of the military or naval forces of the state or of the United States if leave would not otherwise be allowed by law (“state leaves”).

2.  What is the maximum length of leave?

USERRA generally provides for a cumulative leave of absence of up to five years. An employee’s absence may extend beyond five years under certain specified circumstances. Where the leave is provided under state law, employees may be absent for up to four years for active military service, with certain exceptions.

3.  Is the leave paid or unpaid?

Leave under USERRA is ordinarily unpaid unless the employer is obligated by agreement, policy or practice to pay an employee during all or a portion of the leave. During leave, employees must be allowed, but cannot be required, to use any vacation or other paid time off under an agreement, employer policies or practices. Employers may choose to pay the difference between the employee’s regular compensation and the military pay for some or all of the leave but are not required to do so. State military leaves for employees are also generally unpaid.

4.  How does military leave affect “seniority-based” benefits?

An employer is not required to make contributions to pension or 401(k) plans during military leave. Upon reinstatement, however, an employer must make up its contributions. An employee has three times the length of the amount of leave taken to make up his or her pension or 401(k) contributions, at which time the employer must contribute its matching portion, if any. Time spent on military leave cannot be treated as a break in service and must count as continuous employment for determining vesting and accrual of retirement benefits.

Further, an employer must count the time spent on leave towards seniority and seniority-based benefits. For example, an employee’s six months of military service must count as service for the employer where the employer’s vacation policy bases vacation entitlement on years of service. An employer generally is not required to credit an employee for accrual of vacation or sick time during military leave unless the employer provides such credits to employees on other types of leaves (e.g., while on any other paid or unpaid leave) or upon return from other types of leaves.

5.  Must an employer reinstate the employee upon return from military leave?

USERRA requires employers, with limited exceptions, to reinstate employees within two weeks following an employee’s request for reinstatement after completion of military leave. Generally, the employee must be placed in the position the employee would have had if he/she had remained actively employed if not for the absence due to uniformed service. This is referred to as the “escalator position.”  Thus, for instance, if the individual would otherwise have been promoted during the leave, the individual is entitled to the promotion upon return to employment. If the employee is not qualified for the escalator position, the employer must make reasonable efforts to help the employee become qualified. Special provisions apply if, after reasonable efforts, the employee is not qualified to perform the position to which he/she has a right of reinstatement. Different reinstatement terms also may apply to an employee injured during military service.

6.  Is an employee required to provide the employer notice of intent to return to work upon completion of military service? 

USERRA provides that an employee who wishes to return to work after the completion of military service should do so in a timely fashion. If the service was for 30 days or less, the employee should report for work on the first regular day of work following completion of military service after returning home, or as soon as possible. For service of 31 to 180 days, the employee should, if possible, reapply to the employer not later than 14 days following completion of the military service. For service of 181 days or more, the employee should, if possible, reapply not later than 90 days following completion of military service. USERRA contains a number of exceptions to these time periods. An employee’s failure to report or apply for reemployment within the prescribed time period does not necessarily result in forfeiture of his/her reemployment rights.

For state leaves, the employee should submit a job application within 90 days after termination of military service. The state law also contains a number of exceptions to this time period.

7.  Are there any restrictions on terminating an employee who is reemployed after military service?

USERRA prohibits employers from terminating employees returning from military service except “for cause” for a defined period of time. If the military service was for more than 30 but less than 181 days, the employer is prohibited from terminating the employee except for cause for 180 days after reemployment. If the military service was for more than 180 days, the employer is prohibited from terminating the employee except for cause for one year after reemployment. The “for cause” termination requirement will supersede any employer policy or individual employment agreement providing a lesser basis for termination during the applicable time period.

For state leaves, an employer is prohibited from terminating an individual except for cause, after notice and a hearing, for one year following reemployment.


***The federal and state laws regarding military leave are very detailed and contain many exceptions and caveats that cannot be fully addressed in a summary. Employers are advised to seek guidance from legal counsel regarding the handling of benefits during military service and upon return from leave, the reemployment rights of individuals returning from military service and prior to terminating an individual who has taken military leave.