The Uniformed Services Employment and Reemployment Rights Act (USERRA) establishes certain rights for employees of private employers who serve in the uniformed services. Specifically, USERRA prohibits private employers from discriminating or retaliating against employees based on their uniformed service and ensures that those employees receive certain benefits and reemployment rights and limited protection from termination upon return from military leave.
Any person who is a member of the uniformed services of the United States (or who applies to be a member of the uniformed services) is entitled to protection from discrimination or retaliation under USERRA. In addition, persons who are absent from their regular employment due to “service in the uniformed services” are entitled to certain reemployment rights and benefits.
The term “uniformed services” is broad and includes:
The phrase “service in the uniformed services” is defined as the performance of a duty on a voluntary or involuntary basis in a uniformed service and includes:
USERRA does not protect employees who leave civilian employment to pursue a full-time career in the military.
Unlike some federal employment statutes, under USERRA, there is no minimum amount of time that an employee must work for the employer to be eligible for USERRA-protected leave. In fact, USERRA provides rights and protections even to job applicants of private employers. However, temporary employees who are hired for a brief, non-recurrent period, where there is no expectation that the employment would continue for an indefinite or significant period of time, are not covered by USERRA.
Employers are required to provide to persons entitled to USERRA benefits, a notice of the rights, benefits and obligations of both the employee and the employer. The employer may provide such notice by posting it where notices are customarily placed. However, an employer may provide notice by other means, such as mail or email. A copy of the required notice (“Your Rights Under USERRA”) may be found at:
USERRA applies to virtually all employers in the United States, including private companies, tax-exempt entities and federal, state or local governments and agencies. There is no exception for small employers. In addition, some courts have even found that individuals may be liable for discrimination or retaliation under USERRA.
USERRA requires all employers to allow covered employees to be absent from work to provide service in the uniformed services. Employees are protected by USERRA not only for the time that they are actually out on military leave, but also for the time taken off from work to travel to and from military duty. Employers are very limited in the restrictions that they can place on an employee’s ability to take a military leave of absence.
Employers must allow an employee to take a military leave of absence. Employees must be excused from work to attend inactive duty training (such as weekend drills or annual military training summer camp) or other service in the uniformed services, as long as the employee has not exceeded five years of cumulative service for such leave. If the employee’s cumulative absences exceed five years, then the employer has no obligation under USERRA to reemploy the employee.
An employee is responsible for notifying the employer of his or her military obligation. Either written or verbal notice is sufficient under USERRA, regardless of what the employer’s policies may require. Employees must normally give notice before leaving for military service. However, this requirement is waived if advance notice is impossible because of “military necessity or another reason outside the employee’s control.” Accordingly, an employee who is called up for emergency duty at 9 p.m. and is on a plane out of the country by 11 p.m. need not provide his or her employer with advance notice in order to be protected by USERRA.
An employee is not required to submit official documentation of his or her military orders at the time the employee requests the military leave of absence because military orders are often issued on an informal basis. For instance, the military rarely issues formal, written orders for inactive duty training (weekend drills). Nevertheless, any orders issued by competent military authority are considered valid.
An employer may not require an employee to reschedule drills, military training or other military duty obligation to suit the employer’s needs. However, when military duties require an employee to be absent from work for an extended period, during times of acute business need or when the requested military leave is unduly burdensome for the employer, the employer may contact the commander of the employee’s unit to determine if the duty could be rescheduled or performed by another servicemember. If the commander determines that the employee’s military duty cannot be rescheduled or performed by another servicemember, the employer must permit the employee to perform his or her military duty.
An employee is not required to find someone to cover his or her work duties during the employee’s absence from work.
USERRA contains detailed provisions regarding the compensation that an employee is entitled to receive during military leave and upon return from military leave.
The employer is not required to pay the employee during military leave. However, under the Fair Labor Standards Act the employer cannot dock an exempt employee’s pay for absences due to military leave in any workweek in which the employee performs any work for the employer. Thus, if an exempt employee works a partial workweek in the week military leave begins or ends, the employee must be paid for the entire week. In addition, if an exempt employee continues to do some work for the employer during military leave, by telecommuting or otherwise, the employee must continue to be paid. In all cases, the pay may be reduced by any military pay received. This reduced pay (the difference between military pay and the employee’s civilian pay) is called differential pay. Some employers elect to pay differential pay even when it is not required. Other employers choose to provide a specific number of paid military leave days per year and pay differential pay only when required for exempt employees.
With respect to compensation after the employee returns from military leave, the employer is generally required to reinstate the employee in a position at the level of pay the employee would have achieved if the employee had never taken military leave. Pay includes all elements of compensation, such as salary, wages, commission, bonuses, shift premiums, hourly rate and piece rate. Returning employees are also entitled to all seniority-based raises, as well as all merit-based raises that are consistently awarded to nearly all employees and that were granted during the period of military leave.
USERRA contains detailed provisions regarding the benefits that an employee is entitled to receive during military leave and upon return from military leave. In order to be eligible for these benefits, the employee must meet the eligibility requirements of USERRA, as described previously, namely, leaving work for temporary service in the uniformed services, providing proper notification prior to taking leave and returning to work within the required timeframe.
USERRA includes specific rules for the provision of benefits under an employer-sponsored health plan, both during and after military leave. “Health plan” is broadly defined as “an insurance policy or contract, medical or hospital service agreement, membership or subscription contract or other arrangement under which health services for individuals are provided or the expenses of such services are paid.” This definition of health plan includes all health plans, regardless of the number of participants, the size of the employer or whether the employer is a government agency or church.
The employee and his dependents are entitled to re-enroll in the employer’s health plan when the employee returns to work without any new waiting period, exclusions or preexisting condition limitations. However, if the employee incurred an illness or injury during military leave and the Secretary of Veteran’s Affairs determines that the illness or injury was incurred in or aggravated during service, that illness or injury may be subject to an exclusion or preexisting condition limitation. Thus, a health plan can include a provision excluding from coverage an injury or illness incurred as a result of military service under those circumstances.
If the plan does not include such an exclusion, the plan’s preexisting condition limitations, if any, would apply; but, in all likelihood, the employee would have sufficient “creditable coverage” from TRICARE (the military’s health plan) coverage to eliminate the limitation. If the employee was in the middle of a waiting period or was subject to a preexisting condition limitation at the commencement of military leave, then the time limitations on that period stop the military leave and resume again when the employee returns to work.
The employer is not required to make employer contributions for health coverage for an employee or his family during military leave, although the employer may choose to do so. USERRA provides the employee with the right to elect to continue coverage upon the commencement of military leave in a manner similar to COBRA. Where COBRA applies to the employer, the employee could also elect COBRA continuation coverage. In addition, the employee’s spouse may have a special enrollment right that would allow the family to be covered under the spouse’s employer’s health plan.
Under USERRA continuation coverage, if an employee and any dependents are enrolled in a health plan immediately prior to military leave, they have the option of remaining on the health plan for the lesser of either:
The employee may be required to pay up to 102% of the full premium for the coverage provided under the plan (calculated in the same manner as COBRA). But, if the period of service is only for 30 days or less, the employee and dependents must be maintained on the employer’s health plan during the leave with an employee contribution no greater than that normally required of employees. There is no notice requirement for USERRA continuation coverage.
If the Consolidated Omnibus Budget Reconciliation Act (COBRA) applies to the health plan, COBRA is triggered by the beginning of military leave because of the employee’s reduction in hours and the employer must provide COBRA notice. COBRA continuation coverage applies even though the employee and his family are eligible for coverage under TRICARE (the military’s health plan). This is an exception to the normal rule that eligibility under another employer’s group health plan can cut off the right to COBRA continuation coverage.
In general, unless the spouse or a dependent is disabled, the employee and his family will receive the same coverage for the same cost under either COBRA or USERRA. In either case, if, during the military leave, the employee dies, becomes divorced or legally separated, becomes entitled to Medicare or a dependent’s status as a dependent under the plan terminates, the spouse and/or dependent, as applicable, will be entitled to elect COBRA coverage for a period of up to 36 months from the date of the employee’s reduction in hours.
Because COBRA is triggered by the employee’s reduction in hours at the commencement of military leave, COBRA is not triggered by the employee choosing not to return to work at the end of the military leave.
USERRA also grants spouses of members of the uniformed services certain special enrollment rights in employer sponsored health plans. If a family loses health coverage because one spouse goes on military leave and the spouse is otherwise eligible for coverage as an employee under another employer sponsored plan, rather than electing continuation coverage, the family could elect coverage under the non-serving spouse’s employer’s plan. This may be less expensive than electing continuation coverage if the spouse’s employer pays a portion of the premium. The electing spouse must elect coverage within 30 days of losing eligibility for coverage under the initial plan to fall within the special enrollment provisions.
TRICARE, formerly known as CHAMPUS, is the military’s health plan. A person reporting for a tour of active duty of 31 days or more will qualify for TRICARE coverage for himself and his dependents. Ongoing COBRA continuation coverage cannot be terminated because a reservist or his family receives or is eligible to receive health coverage under TRICARE.
USERRA includes specific rules for employee pension benefit plans both during and after military leave. These rules apply to all employee pension benefit plans, whether they are defined benefit or defined contribution plans, including traditional pension plans, profit-sharing plans, 401(k) plans, 457 plans and 403(b) plans.
Military leave is treated as covered service with the employer for purposes of eligibility, vesting and accrual. The time an employee is on military leave does not constitute a break in service. Once the employee returns, the employee has the lesser of five years or three times the length of service to make contributions to the plan that the employee could have made during military leave. In addition, the employer has the same period to contribute an amount equal to the amount that would have been contributed during military leave, without taking into account either earnings or forfeitures. If matching contributions would have been made with respect to any employee contributions, had the employee contributions been made during the period of military leave, the employer is also obligated to make those contributions.
The employer is not required to, but could choose to, make employer contributions to an employee pension benefit plan on behalf of an employee who is on military leave during the employee’s leave. The employer is also not required to, but could choose to, allow the employee to make employee contributions during military leave.
If an employee borrowed against his or her employee pension benefit plan prior to commencing military leave, the Department of Labor requires that the interest rate on the loan be capped at 6% during the military leave, unless a court determines that the ability of the employee to make payments on the loan is not materially affected by the leave. Any borrowing after active duty begins is not affected by this law. The interest rate cap applies even if the employee has not complied with the previously described requirements of USERRA.
In addition to the interest rate cap, the plan may suspend the obligation to make payments on the loan during the period of military service, no matter how long. This is an exception to the normal rule that a suspension of repayment obligation during a leave of absence may only last for one year. In addition, the period in which the loan must be repaid is extended by the period of military service. The schedule of payments on the loan must conform to one of the amortization schedules approved by the Internal Revenue Service.
Benefits other than health and pension benefits are also addressed in USERRA. For USERRA purposes, benefits include “any advantage, profit, privilege, gain, status, account or interest (other than wages or salary for work performed) that accrues by reason of an employment contract or agreement or an employer policy, plan or practice and includes rights and benefits under … an employee stock ownership plan, insurance coverage and awards, bonuses, severance pay, supplemental unemployment benefits, vacations and the opportunity to select work hours or location of employment.” Benefits have been found to include such things as a clothing allowance, housing allowance, law enforcement commission and training.
An employee on military leave is entitled to the same benefits as persons who are on furlough or another type of leave of absence are entitled to during the same period. If different types of leave of absences or furloughs provide different benefits, employees on military leave are entitled to the most advantageous benefits provided under those other types of leave. Employees on military leave will be required to make the same employee contribution for benefits as employees on other types of leave. An employee on military leave is not entitled to any benefit that the employee would not be eligible for if not for the military leave. Thus, an employee on military leave would be entitled to accrue sick days during military leave if persons on another type of leave are entitled to accrue sick days, because sick days are a benefit to which the employee is otherwise entitled. However, the employee would not be eligible to purchase stock under an employee stock purchase plan if the employee was not otherwise eligible to participate in the plan, even though other employees who satisfy the eligibility requirements are entitled to purchase stock under the plan during periods of leave.
If an employee wants to take vacation or similar leave time while they are on military leave, the employer cannot refuse their request. If employees are allowed to accrue vacation or sick leave while taking vacation, the employee will accrue leave during any portion of the military leave in which the employee takes vacation. Taking vacation would be advantageous for an employee who is on military leave if the employer has a use-it-or-lose-it policy for vacation days. For instance, if the employee had accrued a week of vacation prior to going on military leave and could not use it before the military leave starts, he would risk losing it under the employer’s use-it-or-lose-it policy. This employee could request use of this vacation time during the military leave. The employee would thus be paid for the vacation time during the military leave and not entirely lose its value.
Military employee protection from discrimination, termination and retaliation
USERRA protects individuals from all types of employment discrimination and retaliation based on their membership in the uniformed services. USERRA provides that an employer may not refuse to hire, promote or retain an employee based (in whole or in part) on their membership in the uniformed services and it may not terminate such individuals or deny them any benefit of employment on that basis. An employer can be liable for discrimination under USERRA even if military service is only one of several reasons the employer took an adverse action against the employee.
USERRA specifically provides that an employer may not terminate an employee without cause following military leave for a specified period of time. A person who has been reemployed by the company under USERRA cannot be discharged from employment except for cause for a particular time period, based upon the length of service:
The statute does not describe what constitutes “cause” that would justify a termination during the protected time period. However, it appears that virtually any reason other than the employee’s military service will be sufficient cause for termination. It is important to note that only employees who are eligible for reemployment (employees who meet the six criteria described previously) are entitled to this protection from termination.
Employers are prohibited from taking any adverse employment action against a person because that person has taken an action to enforce his or her rights under USERRA, testified in a proceeding to enforce USERRA or has assisted or participated in an investigation under USERRA. However, individuals who are dishonorably discharged from their military service are not protected under this provision.
USERRA requires that a private employer reemploy eligible employees who have served in the uniformed services, subject to certain conditions. USERRA also contains detailed provisions concerning the position into which an employee must be placed upon his or her return from military leave.
Under USERRA an employee who takes a military leave of absence must meet six eligibility criteria in order to be entitled to the reemployment rights and benefits of USERRA:
USERRA does not define what it means to submit an application for reemployment. While a formal application is probably not necessary, something more than a mere inquiry concerning employment is usually required. For instance, courts have found that an employee who simply asked his employer about conditions at the plant and another employee who asked for an application from the employer’s security guard did not apply for reemployment under USERRA.
The employer is not permitted simply to terminate an employee who fails to return to work within the deadlines outlined herein. If an employee fails to meet the USERRA reapplication deadlines, she will be subject to the employer’s standard explanation requirements and disciplinary procedure for employees who are absent for scheduled work.
Exceptions to an employer’s obligation to reemploy
The employer is not obligated to reemploy a person returning from military service if:
Position to which the employee is assigned upon return from duty
Except with respect to persons whose disability occurred in or was aggravated by military service, the position into which an employee is reinstated is determined by priority, based on the length of military service.
The employee must be reemployed:
The fact that another employee was placed in the serviceperson’s former position does not render it impossible or unreasonable for the employer to reinstate the serviceperson. The employer is expected to accommodate a returning employee’s right to his or her position, regardless of whether reinstatement would result in displacement of another employee.
The employee is entitled, upon return from military leave, to the seniority and all benefits based on seniority that the employee had immediately prior to military leave, plus the additional seniority and seniority-based benefits that the employee would have attained if the employee had been continuously employed with the employer during the military leave.
The employee is entitled, upon return from military leave, to all benefits that are not based on seniority in the same manner as any employee on any furlough or leave of absence is entitled to upon return from leave. If the treatment of other types of leave varies, the returning employee is entitled to the most favorable benefits afforded another type of leave, regardless of the type of leave or if it is paid or unpaid. In no event is the employee entitled to any benefits to which the employee would not otherwise be entitled if not for the military leave. The employee returning from military leave will be required to make the same employee contribution for benefits as employees returning from other types of leave.
If vacation or sick days are seniority-based, the employee is entitled upon return from military leave to immediately be credited with all vacation or sick days the employee would have accrued during the military leave, less any days that would have been lost under a use-it-or-lose-it policy.
An employee is entitled to Family and Medical Leave Act (FMLA) leave if the employee worked for a covered employer for at least 12 months before the beginning of the FMLA leave and during that time worked at least 1,250 hours. An employee returning from military leave is treated, for FMLA purposes, as having worked for the covered employer during the period of military leave. In addition, the employee is treated, for FMLA purposes, as having worked the number of hours during the period of military leave as the employee would have worked if he had not gone on military leave. Thus, an employee who normally works a 40-hour week and who goes on a 26-week tour of duty, will be treated upon return, for FMLA purposes, as having worked for the covered employer during the 26 weeks of military leave. In addition, the employee will be deemed to have worked 1,040 hours (26 weeks at 40 hours per week) during the period of military leave.
If an employer experiences a downsizing or reorganization while an employee is on military leave, the employee on military leave should be considered along with other employees not on military leave. If his position is eliminated, he will be entitled to any severance benefits based on length of service that are provided. If the downsizing or reorganization occurs after the employee returns from military leave, the period of military leave must be counted in determining eligibility for and the amount of any severance benefit.
If an employee borrowed money from his employer prior to commencing military leave, the interest rate on the loan must be capped, upon the employee’s request, at 6% during the military leave. Any borrowing after active duty begins is not affected by this law. There is no obligation to inform the employee of this right and the employer need not adjust the rate unless the employee specifically requests it. If the employee specifically requests a rate adjustment, the request may be denied if the employer can prove that the employee is not financially affected by the active service. If the employer is providing differential pay, it is unlikely that the employee is financially affected. This interest rate cap applies even if the employee has not complied with the previously described requirements of USERRA.
Once military leave is completed the interest rate on the loan may return to a rate that is determined under the terms of the loan agreement. Any interest foregone during the period that the rate was capped may not be recouped.
A person who claims that his or her employer has failed or refused to comply with USERRA may either file a complaint with the Veterans’ Employment and Training Service (VETS) (which is a Department of Labor agency) or file a complaint in federal court.
If the employee files a complaint with VETS and VETS determines that the complaint is substantiated, VETS will attempt to resolve the complaint by making reasonable efforts to ensure that the employer complies with USERRA. If these efforts fail, VETS will notify the employee of the results of its investigation and the employee’s right to file a complaint against the employer in federal court. A person who receives a notification from VETS of an unsuccessful effort to resolve a complaint may request that VETS refer the complaint to the Department of Justice. The Department of Justice may appear on behalf of and act as attorney for, the person on whose behalf the complaint is submitted and commence an action on the employee’s behalf. Remember that the employee does not have to file a complaint with VETS and may individually file a claim in federal court.
USERRA does not contain a specific provision setting the applicable limitations period and it even directly prohibits the application of state statutes of limitations. One case determined that the appropriate statute of limitations for a USERRA action is four years (based on the fallback four-year statute of limitations created by Congress for federal causes of actions not having their own limitations period). If a plaintiff waits too long to file a claim, his claim may be barred by the equitable doctrine of laches, which is similar to a statute of limitations except the timeframe is imprecise. Under this doctrine, a claim might be barred if it would be “unfair” to the opposing party to allow pursuit of the claim because of a delay in pursuing the claim that would be damaging to defense by the employer.
The remedies available to persons who have been injured by violation of USERRA include:
Courts are prohibited from taxing costs against a losing plaintiff under USERRA. Employers also need to be aware that even if an employee cannot prove he or she suffered any monetary damages because of a violation of USERRA, this does not mean that the district court would not be authorized to approve an award of attorney’s fees and costs to a prevailing plaintiff.
Employers are demonstrating a commitment to employee military service. Many employers are getting involved with the National Committee for Employer Support of the Guard and Reserve (ESGR) and are signing Statements of Support for the National Guard and Reserve. ESGR is a committee of the Department of Defense that works to promote and sustain employer and community support for the National Guard and Reserve.
The Veterans Benefits Improvement Act of 2004 amended USERRA and required that employers provide their employees with notice of their rights under USERRA. The statute provides that the requirement for the provision of notice under this section may be met by the posting of the notice where employers customarily place notices. Various companies create posters that are compliant with the applicable laws that may be purchased by the employer for display at the workplace.
Policies and Forms
Chapter 16: Military leave