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To fight the war on terrorism and to address specific concerns in Iraq, North Korea and Iran, the U.S. armed forces have called to active duty thousands of reservists and National Guard troops (over 160,000 as of March 2003). A significant number of these individuals were employed in private or public sector jobs which they had to leave to enter the armed forces. As a result, these individuals are entitled to certain rights and protections under the Uniformed Services Employment and Reemployment Act of 1994 ("USERRA"). Employers should be aware of these obligations and review their existing policies and procedures to ensure that they are in compliance with USERRA.

At the outset, it is important to note that an overall objective of USERRA is to place affected employees, to the extent possible, in the same position that they would have been in if they had remained continuously employed during the period of military service. In addition, this article is intended to provide only a general overview of the key obligations imposed on employers by USERRA.

Reemployment Rights

An individual who leaves employment to join the armed forces is generally entitled to reemployment rights if the following conditions are satisfied:

1. the employee must generally provide the employer with advance notice of the military service;
   
   
2. the cumulative military service generally cannot exceed 5 years; and
   
   
3. the employee must report back to work within a certain time period following the completion of the military service - (1) by the next business day for military service of less than 31 days, (2) within 14 days for military service of 31 to 180 days, and (3) within 90 days for military service of more than 180 days.
   
   

There are a number of exceptions to this reemployment right. For example, an employer is generally not required to rehire an employee if it is impossible or unreasonable to do so (e.g., the employee's position was eliminated in a general reduction in force).

USERRA also specifies the positions to which an employee must be reemployed. In general, the employee must be reemployed in the job he or she would have held if the employee had remained continuously employed during the military service or, if the period of military service is more than 90 days, a position of like seniority, status and pay. The right to the specified positions is generally conditioned on the employee being qualified for the job or being able to qualify after reasonable efforts by the employer. There are also special rules that apply if an employee cannot become qualified after reasonable efforts.

Employee Benefit Rights

An employee who leaves for military service must generally be treated as if he or she is on a leave of absence and must generally receive the most favorable leave of absence benefits provided by the employer. USERRA also requires employers to offer employees the right to elect continued health coverage during the period of military service for up to 18 months, which is similar to the requirements imposed by the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), and USERRA generally provides that a returning employee cannot be subject to any exclusions or waiting periods upon reemployment. In addition, although an employer cannot require an employee to use accrued vacation or annual leave during the military service, employees must be given the option to use such leave during the military service. USERRA does not otherwise require an employer to pay a former employee during the period of military service; although some employers voluntarily elect to do so. A recent survey of 154 of the Fortune 500 companies by the Reserve Officers Association of the United States found that 105 of the companies voluntarily elected to make up the difference between the employees' military pay and the pay they would have received if they had remained employed.

In general, an employee returning from military service is entitled to all of the seniority-based rights and benefits the employee would have attained with reasonable certainty had the employee remained continuously employed during the period of military service. For example, if the number of vacation days is based on length of service, a returning employee must be provided with the number of vacation days he or she would have become entitled to if the employee had remained continually employed during the military service.

USERRA also includes specific requirements for retirement plans, which apply to both qualified and nonqualified plans. In general, the period of military service must be taken into account in determining eligibility and vesting, and the returning employee must be provided with the benefits and contributions he or she would have received if the employee had continued working for the employer during the military service. The compensation that must be used to determine the amount of benefits or contributions that would have been provided is the compensation the employee would have received if he or she had remained employed, or if that amount is not reasonably determinable, the average rate of compensation during the 12-month period immediately preceding the military service. In addition, returning employees must be allowed to make up any employee contributions (pre-tax or after-tax) the employees would have been entitled to make during the military service. The make-up period generally commences on the date of reemployment and its duration is generally the lesser of five years or three times the period of military service.

Protections from Discrimination, Retaliation and Discharge

USERRA expressly prohibits employment discrimination and retaliation because of past, present, or future military service. USERRA also prohibits an employer from discharging a returning employee without cause - (1) an employee who completes six months or less of military service (and at least 30 days) cannot be discharged without cause for 6 months following reemployment, and (2) an employee who completes more than 6 months of military service cannot be discharged without cause for 1 year following reemployment.

This article provides a general overview of the obligations imposed by USERRA. There are many exceptions and special rules that apply. In addition, there are many gray areas. For these reasons, employers should review their existing policies and procedures and consult with their legal counsel to determine whether they are in compliance with USERRA.