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A Better Partnership


Mar 2006
March 15, 2006

USDOL Issues - New USERRA Regulations

The Uniformed Services Employment and Reemployment Rights Act ("USERRA") prohibits employment discrimination against those who serve in the U.S. armed forces and requires employers to grant leaves of absence for active duty and to reinstate returning veterans with various benefit protections.

The United States Department of Labor ("USDOL") has adopted new interpretive regulations that contain "Questions and Answers" about USERRA. The Preamble discusses the intent and history of each regulatory provision in detail. The Preamble and regulations are available on the Web at

The new regulations are timely. 1.8 million Americans are members of the U.S. Military Reserve or National Guard. Since September 11, 2001, more than 420,000 reservists have served tours of active duty. One-third of our military forces in Iraq and Afghanistan are reservists. At the beginning of 2006, a total of 136,000 reservists were on active duty. The average period of service for a reservist called to active duty since 9/11 is over 300 days, compared to an average of 1 day before Operation Desert Storm and Operation Iraqi Freedom.

Who Is Protected by USERRA?

All members of and applicants to the U.S. armed forces, armed forces Reserves and National Guard members, all enrollees in the U.S. military academies, and all ROTC participants who have a contract requiring future service are covered by USERRA's "antidiscrimination" provision. In addition, those who leave civilian employment to voluntarily or involuntarily serve terms of active duty or inactive duty are protected by USERRA's provisions requiring military leave, reinstatement, and special health plan and pension plan rights. Reservists' weekend training, special training periods, and active service are also covered.

What Does USERRA Require of Employers?

  1. Nondiscrimination.

    Although an employer may inquire about an applicant's U.S. military service, an employer may not refuse to hire a person because he/she is or has been a member of the U.S. military services, the Reserve or the National Guard, or because a member's active service or inactive service for training may result in absences from employment. USERRA also prohibits retaliation against an employee who asserts USERRA rights.

  2. Leave of Absence.

    Eligibility for Leave. An employee who is called to or volunteers for active U.S. military service or inactive service for training must be granted a leave of absence to prepare for the leave and while on active service. There is no minimum duration for the leave. For example, a Reservist's periodic and intermittent training obligations are also covered. There is a maximum leave period, however. An employer is generally not required to grant military leave for active service in excess of 5 years (although numerous exceptions to the 5-year maximum exist). To be eligible for a USERRA military leave, the service member, or an authorized officer of the armed services, must give the employer "reasonable" written or verbal advance notice of the employee's departure. Thirty days' advance notice is suggested where possible, but is not required.

    Benefits While on Leave. USERRA provides that an employee on military leave must be given the same benefits that are given to employees on other types of leave. Benefits that are discontinued for all employees on any type of leave need not be provided to those on military leave, but a person who is on military leave must be accorded the most favorable treatment accorded to any form of leave. At a minimum, an employer should review every benefit that continues on any kind of leave and set maximum absence periods beyond which the benefit is discontinued.

    USERRA creates new health insurance continuation rules for an employee on military leave that are similar, but not identical, to those under COBRA. Continuation coverage must be available up to 24 months or the period of service, whichever is less. Pretax premium and health care flexible spending accounts plans are subject to USERRA's continuation coverage rules. As with COBRA, an employer may require the participant to pay 102% of the premium for the coverage. USERRA permits an employer to adopt any reasonable procedures for election and termination of coverage consistent with USERRA and the plan. For an employer covered by COBRA, the employer's COBRA procedures may be reasonable. Less-detailed election procedures may be reasonable for an employer that is not covered by COBRA. Even an employer that is covered by COBRA may want separate USERRA election procedures because many of the detailed COBRA requirements are unnecessary under USERRA.

  3. Reinstatement.

    Position, Pay and Benefits. Upon return from military leave, the employee is entitled to prompt reinstatement and to seniority-based benefits that would have accrued but for the absence on military leave. Reinstatement is not required if it is impossible or unreasonable or if the cost of training or other costs would impose an undue hardship on the employer. These are very narrow exceptions. For example, reinstatement is not impossible or unreasonable just because the employer may have to discharge someone else or train the returning employee. The returning employee's pay rate is to be the same as that of others who have comparable length of service, after crediting the returning employee with length of service for the period of the military leave. The returning employee is entitled to reinstatement to the position that she left or, if more favorable, to any position to which it is reasonably certain that she would have advanced but for her absence on military leave (called the "escalator position"), if she can perform the essential functions of that position.

    Limits on Reinstatement Rights. To be eligible for reinstatement, the employee must make a timely application for reinstatement and be available to return to work within prescribed time limits. Those limits vary from the next workday for short periods of service (less than 31 days) to 90 days for leaves of 181 days or longer. An employee is not eligible for reinstatement if she is dishonorably discharged or discharged under other than honorable conditions.

  4. Protection Against Discharge Without Cause.

    An employee who returns to employment following active service of 30 - 180 days may not be discharged without cause during the first 180 days after return. An employee whose period of active service was 181 days or more may not be discharged without cause during the first year after return. "Cause" includes poor performance, misconduct, or other legitimate business reasons such as layoff. The employer bears the burden of proving cause.

  5. Special Pension Plan Requirements.

    No Break in Service. The regulations provide that a participant on military leave is not considered to have a break in service for purposes of participation, vesting and accrual of benefits due to the leave. However, if the employee loses reemployment rights (e.g., by not making timely application to return to work), then the employee is not entitled to any participation, vesting or accrual rights based on the leave for military service.

    Contributions. Although an employer is not obligated to make any employer contributions during the leave, after the participant is reemployed there are strict rules for how the employer must make employer contributions and allow the participant to make up missed contributions or elective deferrals. The employer must make all contributions that are not dependent on employee contributions within the earlier of 90 days after the date of reemployment or when contributions are normally due for the year in which the leave occurred. For participant contributions, the participant has three times the length of the military leave to make up missed contributions or elective deferrals, up to a maximum period of five years. Employer contributions based on participant contributions (e.g., matching contributions) must be made according to the plan's provisions, but only to the extent the participant makes up missed contributions or elective deferrals.

  6. How Is USERRA Enforced?

    An employee may bring a complaint alleging that an employer has violated USERRA to the DOL's Veterans Employment and Training Service ("VETS"). VETS will attempt to resolve the claim administratively and, if that fails, is authorized to sue the employer. Alternatively, an employee may elect to file a private lawsuit against the employer without filing a complaint with VETS. There is no statute of limitations under USERRA, but an employee may forfeit the right to claim a violation if she unreasonably delays in asserting the claim.

    A court can award the amount of pay and the value of benefits lost by the employee due to an employer's violation of USERRA. If the court finds that the employer's violation was willful, then the amount of back pay and benefits awarded will be doubled. USERRA also allows a court to award attorney fees to a successful plaintiff. Individual managers may also be held liable under USERRA if they cause or participate in a violation.

While we have attempted to outline the major provisions of the new USERRA regulations, a complete summary of the regulations is beyond the scope of this article. We encourage you to call or e-mail a member of our Labor and Employment Group if you have questions or need assistance with a specific situation.

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