The Basics of USERRA

There are many practical concerns that confront HR professionals under USERRA, but a grounding in the law is the place to start. The following is a brief overview.

Tuesday, August 1, 2006
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Shorn of all its legalese, USERRA is more easily understood if you simply bear in mind the purposes of the law. USERRA is designed to encourage non-career military service in the National Guard and Reserves, or active military service, by eliminating or minimizing the disadvantages to civilian employment which otherwise might result from such service.

Reemployment Rights: Thus, the simple policy underlying USERRA is that if an employee leaves a civilian job for service in the uniformed services, upon return the employee is entitled to reinstatement to the pre-service position with the accrued seniority, and with all the rights and benefits, the service member would have achieved if continuously employed absent the period of military service.

This is commonly referred to as the "escalator principle" of USERRA, and the service member is entitled to prompt reemployment in the pre-service position or in the so-called "escalator position" which the service member would have attained if continuously employed. 29 CFR §1002.191. Depending on the circumstances, the escalator principle may cause the employee to be reemployed in a higher or lower position, laid off, or even terminated if, for example, the employee's seniority or job classification would have resulted in the employee being laid off or the position terminated during the employee's period of military service.29 CFR §1002.194.

The U.S. Supreme Court described the "escalator principle" as follows: "The returning veteran does not step back on the seniority escalator at the point he stepped off. He steps back on at the precise point he would have occupied had he kept his position continuously during [his military service]." Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 284-85 (1946).

USERRA codifies the escalator principle and applies it to other basic entitlements of returning service members: (1) prompt reinstatement in the "escalator position;" (2) accrued seniority, as if continuously employed; (3) job status (job position, opportunity for promotion, job location, etc.); (4) health insurance coverage; (5) other non-seniority benefits, as if the employee were on furlough or leave of absence; (6) training or retraining and other accommodations; and (7) special protection against discharge, except for cause.

Again, as in determining other rights and obligations, the employee's reemployment position is determined by the length of military service. If military service is for less than 91 days, the returning employee must be reemployed in (1) the escalator position, or (2) if the employee is not qualified to perform the duties of the escalator position after reasonable efforts by the employer to help the employee become qualified, then the employee must be reemployed in the pre-service position, or (3) if not qualified to perform the job duties of the pre-service position, the employee must be reemployed in any other position that is the nearest approximation to the escalator position or the pre-service position. Following a period of military service of more than 90 days, the returning employee must be reemployed in the escalator position or a position of like seniority, status, and pay. The employer is required to make reasonable efforts to help the employee become qualified to perform the duties of the position. 29 CFR §1002.191 et seq.

Upon reemployment, the returning service member is entitled to protection from termination except "for cause" (service of 30 days, protection from termination is for 180 days following reemployment; service of more than 180 days, protection from termination extends to one year). 29 CFR §1002.247. "Cause" is interpreted as termination based on disciplinary conduct, or other nondiscriminatory reasons such as where the returning service member's position is eliminated or the employee or placed on layoff status. 29 CFR §1002.248.

Of course, to be eligible for reemployment rights under USERRA, the returning service member must meet five criteria. The service member must have: (1) held a civilian job with the employer; (2) given advance notice (undefined in length) to the employer of departure for military service; (3) not exceeded a cumulative five years of military service (numerous exceptions for exigencies); (4) been released from service under honorable conditions; and (5) reported back to work in a timely manner or have submitted a timely application for reemployment (timeliness dependent on length of service). 29 CFR §1002.32.

To be considered "timely" under USERRA, the service member's return to work is based on the length of military service. If service was for less than 31 days, the service member must report back to work not later than the beginning of the first full regularly scheduled work period on the first full calendar day following the completion of service, and the expiration of eight hours after allowing a period for safe transportation from the place of service.

If the period of military service was for more than 30 days, but less than 181 days, the service member must submit an application for reemployment with the employer not later than 14 days after completing service. If the period of military service was for more than 180 days, the service member must submit the application not later than 90 days after completing service. 29 CFR §1002.115.

Employers have three statutory defenses to reemployment obligations. One, since the employee has been on military leave, circumstances at the workplace have changed to make reemployment impossible or unreasonable (e.g., an intervening reduction-in-force that would have included the employee). Second, assisting the returning employee to become qualified for the reemployment position would impose an "undue hardship" on the employer (e.g., an action requiring significant difficulty or expense when considered in light of financial resources of the facility, employer, type of operation, etc.) Third, the service member's prior employment was for a brief, nonrecurrent period and there was no reasonable expectation that employment would continue indefinitely or for a significant period. 29 CFR §1002.139.

Benefits and Compensation: With respect to benefits and compensation, the area which provides the most confusion for employers, the service member simply is treated as an employee on furlough or leave of absence, entitled to rights and benefits provided to other employees with similar seniority, status and pay in effect at time of employment, as well as those that become effective during the period of military service.

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Indeed, with respect to military leave, the service member is entitled to the "most favorable treatment" accorded to any comparable form of leave, including leave under the Family and Medical Leave Act where for purposes of eligibility the service member is credited with hours of service that would have been performed "but for" the period of military service. 29 CFR §1002.150

Regarding retirement benefits, under USERRA, the service member accrues credit for continuous service/eligibility time upon return to work, with no break in service for participation, vesting, and benefit accrual purposes. 29 CFR §1002.259. 

As to continuation of health benefits, for military service of more than thirty days the service member may elect to continue an employer-sponsored health plan for up to 24 months which, like COBRA, may require payment of 102% of the full premium to include the employer's administrative costs. 29 CFR §1002.164-166.

Other Non-Seniority Benefits: If the employer offers continued life insurance coverage, holiday pay, Christmas bonuses or other non-seniority benefits to employees on furlough or leaves of absence, such benefits must be offered to employees on military leaves of absence. 29 CFR §1002.150

Non-Discrimination and Non-Retaliation: USERRA provides two additional basic rights. Under USERRA's non-discrimination provisions, an individual's past, present or future uniformed service, duty or responsibility must not be a negative factor in any hiring or other employment-related decision, such as selection for promotion or assignments, even where the employer may be concerned that potential, even imminent, military service will prevent the employee from performing the job.

Also, under USERRA's non-retaliation provisions, an employer must not retaliate against any individual, whether or not the individual has performed military service, because that individual has taken action to enforce USERRA rights afforded any person through filing a complaint, or by testifying or assisting in an investigation or proceeding.

Reemployment, non-discrimination and non-retaliation: Sound simple?

As we all know, no matter how seemingly clear a law's purpose, no employment law is ever simple in its wording or in its application. Lawyers who draft employment laws in the legislature, and who interpret and enforce the laws in regulatory agencies, want to be as comprehensive as possible, both to achieve the broadest conceivable protections ("push the envelope") and to cover all the technical bases to prevent subsequent legal challenges.

However, DOL/VETS is the exception, and should be commended for attempting to assist the regulated community, both employers and veterans, by drafting easily understood, plain language regulations written in question and answer format, interpreting USERRA -- the first-ever regulations under USERRA. See 20 CFR Part 1002. The regulations became effective on Jan. 18, and, along with the required USERRA notice, are available on the Labor Department's Web site.

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