Departing and Returning Employees

Military Leaves of Absence: Departing and Returning Employees

January 2005
By Jack VanHoorelbeke Many employers have employees who are currently on leaves of absence for military service. Unlike in the past, where most employers had employees taking short leaves to perform "weekend warrior" duties, many employers have had numerous employees called to military service for extended periods of time. Over the last few years the types of employees called to military service range from hourly part-time workers to company CEOs. In order to keep operations running, employers have had to adjust their workforce by transferring, training and reassigning other employees to positions left open by a departing service member. This raises an important question. What is an employer to do when employees on a military leave are ready to return to work? The Uniformed Services Employment and Reemployment Rights Act (USERRA) is the federal law that mandates military leaves of absence be given to employees called to serve in the Uniformed Services. USERRA sets forth the rights and obligations of both employers and employees concerning leaves and requests to return from leaves for military service. Reemployment Rights Generally, an employee returning from military service is entitled to prompt reemployment if: the employee holds or has applied for a civilian job; the employee provided advance notice of the military service obligation; the cumulative length of time that the employee was absent as a result of such service was not more than five years; employee was released from service under conditions other than dishonorable or “other than honorable;” and the employee provided timely notice to the employer of an intent to return to work. A returning employee is also entitled to reemployment to the position that the employee would have held, had there been no interruption in employment. For example, if the person would have likely been promoted absent a military leave, the person would be entitled to that promotion upon reinstatement. This would include removing the employee holding this position while the service member was on leave. In most cases, employers must make reasonable efforts to qualify returning service members who are not qualified for reemployment positions. Employers must provide refresher training, training for a new position, and any training necessary to update a returning employee’s skills in a situation where the employee is no longer qualified due to technological advances. Likewise, and employer must make reasonable efforts to accommodate a person who either became disabled or aggravated an injury while on military duty. Notice of Leave An employee who is performing military service must give advanced written or verbal notice to the employer when applicable. This notice can be given by the employee or by an appropriate officer of the branch of the military in which the employee is called to serve. Intent to Return An employee desiring to return to a civilian job is required to give notice to the employer of his/her intent to return to work. The type and timeliness of this notice depends upon the length of military leave. Where service is less than 31 days, the employee must report to work the next day following an 8 hour rest period. Where an employee's service was for 31 to 180 days, the employee must report within 14 days after completion of service. And, where service was for more than 180 days, the employee must apply for reemployment not later than 90 days after completion of service. These deadlines may be extended for up to two years to accommodate those employees hospitalized or convalescing from an injury or illness sustained or aggravated during military service. However, failure to meet these deadlines does not mean that the employee will forfeit his/her right to reemployment. If this is the case, the employee will be subject to the employer's rules governing unexcused absences. Reinstatement Rights USERRA also offers job protection to employees returning from a military leave. Unlike any other federal or state employment law, USERRA grants certain employees "just cause" employment upon reinstatement to their civilian positions based on their length of service. This applies even if the employer is an "at-will" employer. Where military service was for 31 to 180 days, the employee is protected for 180 days. Where service is for more than 180 days, the employee is protected for 1 year. There is no protection for employees serving less than 31 days. Health Benefits The USERRA provides for health plan continuation for persons who are absent from work to serve in the military and their dependents, even if their employers are not covered by COBRA. The USERRA provides that an employee has the right to elect continued health insurance coverage, for himself/herself and his/her dependents during periods of military service. For periods of up to 30 days of training or service, the employer can require the person to pay only the normal employee share, if any, of the cost of such coverage. For longer tours, the employer is permitted to charge the person up to 102 percent of the entire premium. If the employee elects coverage, the right to that coverage ends on the day after the deadline for him/her to apply for reemployment, or 24 months after the absence from the civilian job began, whichever comes first. On December 20, 2004, the Veterans' Benefits Improvement Act of 2004 (VBIA) extended this time period from 18 months to 24 months. This longer continuation requirement must be offered to employees who are eligible to elect continuation coverage under USERRA on or after December 10, 2004. In addition, effective March 10, 2005, the VBIA requires all employers to post a notice describing the rights, benefits and obligations of the employee and the employer under USERRA. The notice will be provided by the Secretary of Labor prior to the March 10, 2005 effective date. Waiting Periods Upon reemployment of the service member, a waiting period or exclusion cannot be imposed upon reinstatement of health plan coverage of any person whose coverage was terminated by reason of the military service (unless an exclusion or waiting period would have been imposed absent the military service). Pension and Retirement Plans Pension plans which are tied to seniority are given separate with detailed treatment under the law. The law provides that: • A reemployed person must be treated as not having incurred a break in service with the employer maintaining a pension plan • Military service must be considered service with an employer for vesting and benefit accrual purposes • The employer is liable for funding any resulting obligation • The reemployed person is entitled to any accrued benefits from employee contributions only to the extent that the person repays the employee contributions Covered Plan A "pension plan" that must comply with the requirements of the reemployment law would be any plan that provides retirement income to employees until the termination of employment or later. Defined benefits plans, defined contribution plans, and profit sharing plans that are a part of the overall retirement plan are covered. Multi-employer Plans In a multi-employer defined contribution pension plan, the sponsor maintaining the plan may allocate the liability of the plan for pension benefits accrued by persons who are absent as a result of military service. If no allocation or cost-sharing arrangement is provided, the full liability to make the retroactive contributions to the plan will be allocated to the last employer employing the person before the period of military service or, if that employer is no longer functional, to the overall plan. Within 30 days after a person is reemployed, an employer who participates in a multi-employer plan must provide written notice to the plan administrator of the person’s reemployment. Employee Contribution Repayment Repayment of employee contributions can be made over three times the period of military service but no longer than five years. For purposes of determining an employer’s liability or an employee’s contributions under a pension benefit plan, the employee’s compensation during the period of his or her military service will be based on the rate of pay the employee would have received from the employer but for the absence during the period of service. If the employee’s compensation was not based on a fixed rate, or the determination of such rate is not reasonably certain, the employee’s compensation during the period of service is computed on the basis of the employee’s average rate of compensation during the 12-month period immediately preceding such period or, if shorter, the period of employment immediately preceding such period. Discrimination Employment discrimination because of past, current, or future military obligations is prohibited. The ban is broad, extending to most areas of employment, including: • Hiring • Promotion • Reemployment • Termination • Benefits The law protects past members, current members, and persons who apply to be a member of any of the branches of the uniformed services from discrimination. Prior to USERRA, only Reservists and National Guard members were protected from discrimination. Now, under these new laws, persons with past, current, or future obligations in all branches of the military or as intermittent employees in the National Disaster Medical System are also protected. Standard/Burden of Proof If an individual’s past, present, or future connection with the service is a motivating factor in an employer’s adverse employment action against that individual, the employer has committed a violation, unless the employer can prove that it would have taken the same action regardless of the individual’s connection with the service. USERRA clarifies that liability is possible when service connection is just one of an employer’s reasons for the action. To avoid liability, the employer must prove that a reason other than service connection would have been sufficient to justify its action. Retaliation Employers are prohibited from retaliating against anyone: • Who files a complaint under the law • Who testifies, assists or otherwise participates in an investigation or proceeding under the law • Who exercises any right provided under the law • Whether or not the person has performed military service An employer will likely be faced with numerous issues when an employee requests to return to work after a military leave. Each situation will likely be different and require a separate determination as to what the law will require for a particular employee. When faced with an employee’s request to return to work, an employer should be sure to request/obtain all necessary information from the employee and when necessary, obtain proper legal advice. Jack VanHoorelbeke is a labor and employment relations attorney with Dickinson Wright PLLC in Detroit, Michigan. For additional information, visit www.dickinsonwright.com.
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