Labor Department Issues Veteran's Re-Employment Regulations.

by Patrick J. Stewart

December 20, 2005

The U.S. Department of Labor issued regulations yesterday which outline employer and employee rights and responsibilities under the Uniform Services Employment and Reemployment Rights Act of 1994 ("USERRA"). The regulations are the first promulgated under USERRA. They interpret and clarify existing rights and responsibilities under the law which has been in effect for over a decade. In short, that law protects the employment and re-employment rights and benefits of members of the armed forces. Some of the key provisions in the regulations are as follows: military service personnel covered by USERRA include all categories of military training and service (both voluntarily or involuntary) including the National Guard and reserve military personnel, as well as other persons serving in active components of the armed forces. It is unlawful for an employer (no minimum number of employees to be covered) to refuse to hire, re-employ, retain, promote or provide any benefit to an individual on the basis of service in the uniformed services, and the employer may not retaliate against any such individuals for attempting to enforce their rights under USERRA or for testifying in a proceeding under USERRA. Highlights of the new regulations are as follows:

Burden of Proving Violations

An individual claiming that his/her rights were violated has the burden of proving that a status or activity protected by the USERRA was one of the reasons the employer took action against him or her. If that burden is established, the employer has the burden of proving the affirmative defense that it would have taken the action regardless of that protected status or activity.

Advanced Notice Required

In order to be protected by the law, the employee or an appropriate officer of the uniform service in which the service is to be performed must provide advance notice to the employer of a need to leave the employment position to perform service in the uniformed services. The notice may be either verbal or written, and it should be given as far in advance as is reasonable under the circumstances.

Timely Application for Re-Employment Required

Upon completion of service in the uniformed services, the employee must notify the pre-service employer of his or her intent to return to employment by either reporting to work or submitting a timely application for employment. The "application" may be either oral or in writing and must be submitted to the agent of the employer who has responsibility for receiving employment applications. If the period of absence exceeds 30 days the employee may be required to provide documentation establishing that the application is timely, that the employee has not exceeded the five year limit on duration of service, and that the employee's separation or dismissal from service was not disqualifying. A list of the type of documents that satisfy the requirement are set forth in the regulations.

Circumstances Which Justify Refusal to Re-employ

Even if the employee is otherwise eligible for re-employment benefits, the employer is not required to re-employ the individual if the employer establishes that (1) circumstances have so changed as to make re-employment impossible or unreasonable (e.g. a mass layoff took place while the employee was in service), (2) assisting the employee in becoming qualified for re-employment would impose an undue hardship, or (3) the employment position previously held was for a brief non-recurrent period with no reasonable expectation that it would continue indefinitely. The employer has the burden of proof of showing that circumstances existed to justify a refusal to re-employ.

Use of Paid Leave

An employee entering the uniformed services must be permitted, but is not required, to use any accrued vacation, annual or other paid leave during the period of service. The employer is not obligated to allow the person to use sick leave if it limits the use of such leave only for illness.

Payments to Continue Health Coverage

If the employee is in the uniform services for fewer than 31 days, he or she cannot be required to pay more than the regular employee share for health plan coverage. However, if the service exceeds 31 days, he or she may be required to pay no more than 102% of the full premium under the plan (the employee and the employer's share, plus 2% percent for administrative costs).

Position Due Upon Re-employment

As a general rule, the employee is entitled to re-employment in the job position that he or she would have attained with reasonable certainty if not for the absence due to uniform service. Referred to as an "escalator position", the employee must be re- employed in a position that reflects with reasonable certainty the pay, benefits, seniority, and other job perquisites that he or she would have attained if not for the period of service. That includes the seniority, status, and rate of pay that the employee would ordinarily have attained in that position given his or her job history, including prospects for future earnings and advancements. The same concept applies with both positive and negative consequences. Under the same rationale, the escalator principle may cause an employee to be re-employed in a higher or lower position, laid off, or even terminated, depending upon the employer's circumstances.

Seniority Rights Accrual

The uniform service employee is entitled to seniority and seniority-based rights and benefits that he or she had on the date the uniform service began plus any seniority and seniority-based rights and benefits that the employee would have attained if he or she had remained continuously employed. Uniform services is not considered a break in employment. For example, a re-employed service member would be eligible for leave under the Family and Medical Leave Act (FMLA) if the month's number of hours were while employed by the civilian employer combined with the service time, would render the employee eligible for FMLA benefits. The regulations also set forth the proper method of contributions to pension and retirement plans.

Rate of Pay Upon Return

When the employee returns from uniform service, his or her rate of pay is determined by applying the same escalator principles that are used to determine the re- employment position. That means taking into account any pay increases, differentials, step increases, merit increases, or periodic increases that the employee would have attained with reasonable certainty had he or she remained continuously employed during the period of service.

The above is just a sampling of the various regulations promulgated by the Labor Department. The text of the final rules may be found on the Department's website at http://www.dol.gov/vets/regs/fedreg/final/2005023961.pdf.

Finally, please be aware that the Labor Department requires all employers to post a notice which informs employees of their rights under USERRA. The notice must be posted by January 18, 2006. Employers may download the notice from the Department's website at http://www.dol.gov/vets/programs/userra/USERRA_Private.pdf.

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