DOL issues new regs on employer obligations to returning service members

Since Sept. 11, 2001, over 500,000 members of the National Guard and Reserve have been mobilized for military service.

Recognizing that so many service members are concluding their tours of duty and returning to civilian employment, the Department of Labor recently issued revised regulations implementing the Uniformed Services Employment and Reemployment Rights Act (USERRA).

The regulations, which went into effect Jan.18, are designed to help employers and employees understand their rights and obligations under USERRA. Notably, USERRA grants eligible service members rights of reinstatement when they return from military service.

To ensure legal compliance, employers must plan carefully when an employee departs temporarily for military service.

Eligibility criteria

USERRA applies to all public and private employers in the United States, regardless of size. The regulations provide that temporary, part-time, probationary, and seasonal employees are covered by the Act.

However, USERRA does not cover independent contractors. To determine whether a service member is an independent contractor, Massachusetts employers should consider the following six factors set forth in the USERRA regulations, instead of following the rigid three-part test used in Massachusetts to determine employee status for wage and hour purposes:

1. The employer’s right to control the manner in which work is performed;

2. The opportunity for profit or loss dependent on the individual’s managerial skill;

3. Any investment in equipment or materials required for the individual’s tasks, or his employment of helpers;

4. Whether the service the individual performs requires a special skill;

5. The degree of permanence of the working relationship; and

6. Whether the service performed is an integral part of the employer’s business.

In general, if an employee has been absent from civilian employment because of military service, he is eligible for reemployment under USERRA if the following criteria are satisfied: (i) The employer has advance notice of the employee’s military service;

(ii) the employee has five years or less of cumulative military service while employed by a particular employer; (iii) the employee returns to work or applies for reemployment in a timely manner; and (iv) the employee’s discharge from the military was under honorable conditions.

Exceptions to eligibility criteria

Each of the criteria contains exceptions and qualifiers.

The five years of service condition does not include the employee’s travel to and from the duty site, time to attend to personal affairs before entering military service, or other delays in activation.

Employers must keep close track of the time the employee spends in actual military service, rather than just the time away from work.

Other statutory exceptions permit an employee to retain his or her reinstatement rights, even if length of service exceeds five years, including unusual service requirements, circumstances beyond the individual’s control, and service (voluntary or involuntary) under orders issued pursuant to specific statutory, presidential, congressional, or administrative authority.

In addition, if an individual remains in, or returns to, the service to mitigate economic losses caused by an employer’s unlawful refusal to reemploy that person, this additional service is not counted.

Although the employer is required to reemploy the service member, the employee is not required to disclose whether he intends to seek reemployment. Accordingly, employers should assume that their employees plan to return to work. The regulations mandate that an employee apply for reemployment or report back to work after military service within certain time frames, depending on the amount of time spent on military duty.

For service of less than 31 days, the service member must return at the beginning of the next regularly scheduled work period or the first full day after release from service, taking into account safe travel home plus an eight hour rest period. If an employee serves more than 30 days but less than 181 days, an application for reemployment must be submitted within 14 days of release. Upon service of more than 180 days, an application for reemployment must be made within 90 days of release.

Significantly, if the employer undergoes a reduction-in-force while the employee is away on military leave, the employer may deny reinstatement only if the circumstances have changed so much that reemployment of the person would be impossible or unreasonable. The employer must show that the service member would have been laid off as a result of that reduction-in-force even if he or she had been working.

Escalator principle

Employees’ reinstatement rights are governed by the “escalator” principle, which means the employee is to be reinstated to the position he would have attained if not for the absence, with the same seniority, status and pay as well as other rights and benefits determined by seniority.

Employers must make reasonable efforts, such as training or retraining, to enable returning service members to upgrade their skills to qualify for the new position. If a service member cannot qualify for the “escalated” position, the employer must provide an alternative position of equivalent or nearest approximation of status and pay that the person is qualified to perform.

Leave of absence

Under USERRA, employees absent due to military service are considered on a furloughor a leave of absence. They are therefore eligible for the same benefits any other employee would receive while on a leave of absence.

For example, if an employer permits employees to use paid vacation while on a leave of absence, so too may an employee who is absent for military service. Similarly, eligibility for, and contributions to, pension plans remain in effect without interruption during the employee’s leave.

Service members also have the right to be reinstated in the employer’s health plan when they return to work, generally without any waiting periods or exclusions except for service-connected illnesses or injuries, which are generally covered by the Department of Veteran’s Affairs.

If the employee has coverage under an employer-sponsored health plan, the coverage continues for up to 24 months of the absence for the employee and any previously covered dependents, at the election of the service member. Like COBRA, the regulations allow the employer to require that the absent employee pay up to 102 percent of the full premium for the benefit. For military service of less than 31 days, health care coverage is provided as if the service member had remained employed.

Anti-discrimination and retaliation provisions

An employer may not deny employment, reemployment, retention in employment, promotion or any other benefit to an individual on the basis of membership in, application for membership in, or performance of, military service. Additionally, an employer may not retaliate against any employee because the employee has taken action to enforce rights under USERRA or participated in a USERRA proceeding or investigation.

Posting requirement

Employers must notify employees of their rights under USERRA. Employers may satisfy this requirement by posting “Your Rights Under USERRA” where employee notices are customarily posted. Posters may be downloaded from the DOL website at http://www.dol.gov/vets/programs/userra/USERRA_Private.pdf.

The regulations may also be found on the DOL website.

David M. Cogliano is an associate in the employment law and litigation groups at Davis Malm & D’Agostine, P.C. in Boston. He advises employers on labor and employment issues, with a focus on discipline and discharge, wage and hour compliance, sexual harassment, hiring practices, FMLA, and ADA compliance and non-compete agreements. Lori A. Jodoin, also an associate in the employment law and litigation groups of Davis Malm, assisted in preparing this article.