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Military Leave (USERRA)

Congress provided additional benefits and job protections for individuals returning to civilian employment after serving in the military by passing the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).Under USERRA, you cannot consider the type and nature of service when you determine your obligation to re-employ an individual. These rights supersede former law as well as any less beneficial policy you may have established. Employers who are covered by USERRA include individuals, successor employers, pension plans, overseas subsidiaries of American organizations and insurance companies that administer life, disability and health plans. When two entities, such as a staffing organization and its client, both exercise control over aspects of an individual’s employment, both entities share responsibility for employment and re-employment rights. Pursuant to the Veterans Benefits Improvement Act of 2004 (VBIA), employers must provide reinstatement rights and other benefits for veterans and employees called for military duty. The law contains two important implications for you:

• The period for continuation of health care coverage is extended from 18 to 24 months.
  
• You must post an employee notice that describes the rights, benefits and obligations under USERRA.
  

Posting Requirements. USERRA requires employers to post a notice that provides information on the rights of military service personnel to job reinstatement and other benefits. The only official version of this poster is provided in English because ​the federal Department of Labor (DOL) stated that all military service personnel must be able to read and understand English. You must give this USERRA notice to:

• Current employees who are members of a uniformed service
  
• Applicants for employment who are members of uniformed services
  
• Current employees who have applied for membership in a uniformed service
  
• Dependents of employees who are members of a uniformed service
  

The most efficient way to comply with USERRA and the VBIA is to post the notice in a prominent place where employees customarily check for information. 

Eligibility for Military Service Leave. USERRA protects anyone absent from work due to “service in the uniformed services.” USERRA defines “uniformed services” to include the Army, Navy, Air Force, Marine Corps, Coast Guard and the Reserves for each of those branches; Army National Guard; Air National Guard; commissioned corps of the Public Health Service; and any other category of people designated by the president in time of war or national emergency. “Service” is defined as duty on a voluntary or involuntary basis, including:

• Active duty
  
• Active duty for training
  
• Initial active duty for training
  
• Inactive duty training
  
• Full-time National Guard duty
  
• Absences for examinations to determine fitness for active duty
  
• Absences for the purpose of performing funeral honors duty
  

Employees who are protected by USERRA include mobilized reservists, those absent for enlistment physicals and volunteers in the National Disaster Medical System. Nondiscrimination rules prohibit considering an applicant’s military service status or obligations, including ROTC membership, as a negative factor in hiring decisions. You cannot refuse to allow military leave or refuse to re-employ an individual returning from military leave because of the leave’s duration or any inconvenience the leave or reinstatement causes you. 

Duration of Military Service Leave. USERRA extends the length of leave time and reinstatement rights you must allow for military duty to five years. This five-year limit is the cumulative length of all employment absences due to military service. There are exceptions to the five-year limit. The following leaves do not count toward the five-year limit:

• Time required beyond five years to complete an initial period of obligated service
  
• Time during which an individual could not obtain orders releasing him/her from service through no fault of his/her own
  
• Time required to fulfill additional training requirements that the military determined to be necessary for professional development, completion of skill training and retraining
  
• Time during which an individual is ordered to remain on (or recalled to) active duty under certain federal laws, especially in times of national emergency 

Notice and Documentation of Military Service Leave. All employees must provide advance written or verbal notice of the need for military service leave, unless they are prevented from doing so by military necessity or if providing notice would be impossible or unreasonable. You can require an individual returning from military service leave to provide documentation establishing that:
The individual has requested re-employment in a timely fashion.

• The individual hasn’t exceeded the cumulative five years of service.
  
• The individual has not lost his/her entitlement to protection under USERRA due to dishonorable discharge or other factors.
  

An employee need not report for military duty immediately after leaving his/her employment to be entitled to USERRA re-employment rights. Additional time may be necessary to rest or to arrange his/her affairs before reporting for duty.

Exemptions from Re-employment Requirements of Military Service Leave. You are not required to re-employ an individual returning from military service leave if:

• Your business circumstances have changed so much that re-employment is impossible or unreasonable.
  
• Retraining or accommodating a disabled individual would pose an undue hardship for you.
  
• The employment prior to the military leave was for a brief, non-recurrent period, and there was no reasonable expectation that the employment would continue indefinitely or for a significant period.
  

You bear the burden of proving impossibility, unreasonableness, undue hardship or the brief, non-recurring nature of the employment prior to military service leave.

Failure to Report or Re-apply After Military Service Leave. A person who fails to report or re-apply as USERRA requires does not automatically forfeit his/her entitlement to USERRA protections. USERRA requires that employers apply their rules, established policy and general practices pertaining to explanations and discipline related to other absences from scheduled work.

Leave Extension for Illness or Injury. Leave can be extended for up to two years for an individual hospitalized for or recovering from an illness or injury incurred or aggravated during military service. If reporting or re-applying to work at the end of the two-year period is impossible or unreasonable due to circumstances beyond the individual’s control, you must extend the two-year period.

Rights of Employees Returning from Military Service Leave. An employee need not declare if he/she intends to return to work following military service. No one can waive re-employment rights. An eligible employee who makes a timely application for re-employment must be returned to work even if he/she initially told you that he/she would not be returning. Employees who are returning from military service are entitled to all the rights and benefits they would have had if they had remained continuously employed. You must treat them in the same manner as you do other employees who are on nonmilitary leaves of absence. You can require employees who are returning from military service to pay the normal employee contribution for benefits if employees on nonmilitary leaves must do so. You need not provide these benefits if the employee provides written notice of his/her intent not to return to your employment after military service. For pension rights, treat employees who are returning from military service leave as though they did not have any break in service. If the employee requests it, you must permit an employee taking leave for military service to use any accrued paid vacation or similar paid time off (PTO). However, you cannot require an employee to use vacation or PTO for military leave. 

Re-employment After Military Service Leave. USERRA requires you to promptly re-employ individuals returning from military service by applying the “escalator principle” as follows:

• 90 days or less of service: The individual is entitled to be re-employed in the position in which he/she would have been employed had there been no interruption for military service if the individual is qualified to perform that job. If the person is not qualified to perform that job, you must make reasonable efforts to qualify him/her. If those reasonable efforts fail, you must reinstate the person to the position he/she held at the time of beginning military leave. This means that if the individual would have been promoted had he/she not been on military leave, the individual is entitled to the position to which he/she would have been promoted unless unqualified to perform in that position even after reasonable efforts at training.
  
• More than 90 days of service: The individual is entitled to be re-employed in the position in which he/she would have been employed had there been no interruption for military service, or in a position of like seniority, status and pay if the individual is qualified to perform one of those jobs. If the person is not qualified to perform one of those jobs, you must make reasonable efforts to qualify him/her. If those reasonable efforts fail, you must re-employ the person in the position he/she held at the time he/she began military leave or a position of like seniority, status and pay.
  

Person with military-related disability: You must reasonably accommodate an individual with a disability incurred in or aggravated during military service. Place him/her in the position he/she would have held had there been no interruption for military service. If performance of that job is impossible even with reasonable accommodation, you must provide a job of equivalent seniority, pay and status for which the individual is qualified or for which he/she could become qualified with reasonable effort. If neither of these options is possible due to the disability, you must provide another position of lesser status and pay but with full seniority.

Two or more individuals entitled to same position: If two or more individuals are entitled to the same position and report for work, the individual who left the position first has the right to that position.

Unless there are extenuating circumstances, “prompt re-employment” means re-employment within two weeks of applying. Prompt re-employment upon return from weekend National Guard duty is the next regularly scheduled workday. Prompt re-employment after several years of active duty may permit more time, where reassignment or notice must be given to another employee occupying the job. You cannot refuse to re-employ an individual to avoid terminating his/her replacement. You must determine, with reasonable certainty, whether the employee would have attained merit or performance increases. Consider the returning employee’s work and pay raise history and the work and pay raise history of employees in the same or similar positions. If you cannot easily determine the position, status and pay rate, you must consider factors such as additional training time, a promotion that the employee missed during service and missed opportunities for advancement, responsibility, general working conditions or job location. 

Notice of Intent to Return from Military Service Leave. An individual must provide you notice of his/her intent to return to work after serving in the military. The time frame within which the notice is required depends upon the length of military service, as follows:

• Less than 31 days of service or fitness for duty exam: Must report no later than the beginning of the first full regularly scheduled work period on the first full calendar day following completion of service, plus time for safe transportation back to the person’s residence, plus eight hours. If reporting at that time is impossible or unreasonable through no fault of the individual, then he/she must report as soon as possible.
  
• 31 days to 180 days of service: Must submit an application for re-employment no later than 14 days after the completion of service. If submitting an application within that time frame is impossible or unreasonable through no fault of the individual, then he/she must submit the application on the next full calendar day when it becomes possible.
  
• More than 180 days of service: Must submit an application for re-employment no later than 90 days after the service is completed. 

Prohibitions on Discharge From Employment After Military Service Leave. You cannot terminate an employee who has returned from military service leave within the following time lines, except for cause:

• Within one year if the period of service lasted longer than 180 days
  
• Within 180 days if the period of service lasted more than 30 days but fewer than 181 days.
  

You must prove cause for dismissal, provide proof that the employee had notice that the conduct would be cause for termination and show that the termination was reasonable. A dismissal may be the result of some other legitimate, nondiscriminatory reason that would have affected any other employee in the same position regardless of protected status. For example, a returning employee may be dismissed as a result of a reduction in force. Employers who terminate an employee who is protected under USERRA bear the burden of proving that the termination did not relate to the military service. The California Fair Employment and Housing Act (FEHA) also protects applicants and employees from discrimination based on “military and veteran’s status.” 

Health Benefits and Military Service Leave. If the uniformed service lasts 30 or fewer days, health benefits continue. You cannot require the employee to pay more than the normal employee’s share of any premium. For time periods lasting longer than 30 days, USERRA provides COBRA-like continuation benefits for people who are absent from work to serve in the uniformed services, even when their employers are not covered by the Consolidated Omnibus Budget Reconciliation Act (COBRA) or Cal-COBRA. This coverage is available for up to 24 months. The employee cannot be required to pay more than 102 percent of the full premium for the coverage.

Employees or qualified dependents who are eligible for COBRA can choose COBRA. Employees or dependents who are not eligible for COBRA, but who are eligible for Cal-COBRA, can choose Cal-COBRA. Cal-COBRA is available for up to 36 months. The employee and each dependent retain separate, individual rights to continue coverage. You cannot terminate COBRA continuation coverage because an activated reservist receives military health coverage, and the reservist’s family receives health coverage under a government program. You must allow employees to resume group health plan coverage upon return to work without a waiting period or other exclusion. You can exclude illnesses or injuries incurred or aggravated during military service because they are covered by the military health plan. Upon re-employment, eligible dependents must be reinstated in your health plan regardless of whether the employee selected continuation coverage and without a waiting period or exclusion.

The Health Insurance Portability and Accountability Act (HIPAA) can provide rights to enroll in a spouse’s group health plan regardless of the plan’s otherwise established enrollment periods. The employee must request special enrollment within 30 days of losing eligibility for coverage. Coverage is effective no later than the first day of the first month following the request for enrollment.

Family and Medical Leave Eligibility and Military Service. Upon the employee’s return to work, you must count the time spent on active duty as time worked for determining eligibility for leave under federal and state family medical leave laws. You must combine the months and hours that the employee would have worked if not engaged in military service with those actually worked to determine if the employee worked the required 1,250 hours in the 12 months preceding the start of a leave.

Retirement Plans and Military Service Leave. You must count the period of military duty as covered service for retirement plan eligibility, vesting and benefit accrual purposes. Accrued benefits resulting from employee contributions are assured to the extent that the employee actually makes the contributions to the plan.

You are not required to make contributions to a 401(k) plan while an employee is on active duty. After you re-employ the employee, you must restart contributions you would have made on behalf of the employee during the period of military service. Your contributions need not include earnings or forfeitures that would have been allocated to employees during military service.

Employees can take three times the period of military duty or five years, whichever is greater, to make up contributions. If the employee makes up the contributions, you must make up any matching employer contributions.

If the plan permits employees who are not affiliated with the military to designate individuals to act on their behalf to change investment allocations or arrange loans from the plan, grant similar rights to employees on military duty.

If an employee borrows money from an employer’s retirement plan, the Soldiers’ and Sailors’ Civil Relief Act (SSCRA) requires that interest charges be reduced to not more than six percent during the period of service. The plan administrator must reduce the rate even if the employee may prefer a higher interest rate to increase accumulations to his/her account, unless the plan obtains a court order permitting a higher rate based on the individual’s ability to pay. A plan can suspend the obligation to make regular loan repayments to the plan during the period of active military service, but the plan is not required to do so.

Holidays and Military Service Leave. You need not pay employees who are on military service leave for holidays unless your company pays for holidays during other unpaid leaves of absence of similar duration. In Tully v. Department of Justice, a California court considered the length of the employee’s military service leave to determine if holiday pay was reasonable, even though the employer paid for holidays during leave for jury or witness duty. Because the employee’s military leave was so long, no other comparable leaves existed that required the employer to provide holiday pay.

The employee did not prove that he was denied a benefit generally available to employees on extended leaves of absence. According to the court, the employee’s argument that military leave entitles him to the best benefits available to employees on any leave misinterpreted the law. The employee is entitled to the benefits available during a comparable leave.

Other Benefits Issues and Military Service Leave. Service members may use vacation, PTO or other similar accrued annual leave during military service, but cannot be required to use such leave. If benefits that do not depend on seniority are determined by type of leave, the returning employee must receive the most favorable treatment associated with any comparable leave, typically of comparable duration. Vacation is considered a non-seniority benefit. Typically, you must provide vacation to employees on military service leave only if you provide it to employees on comparable types of leave.