Military Callups Raise Questions

January 24, 2003
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GRAND RAPIDS — In light of recent military reserve activations, employers are once again asking about their obligations to employees called upon to serve their country.

Just how do companies deal with the employment status of employees on military leave?

Robert Dubault, a partner with Warner Norcross & Judd LLP, said his firm received a lot of calls from employers in late 2001 after a number of National Guard members and reservists were called up in response to Sept. 11.

More inquiries have trickled in during the latest round of call-ups.

By and large, employers want to know what to do with health care benefits for people on military leave, what obligations they may have in terms of pay, and how long employees can be off on military leave and still retain their jobs, he said.

Dubault said several employers have even indicated a desire to provide additional pay on top of military pay to employees on military leave to make up for the income they would be receiving if still on the job.

Employers’ obligations are spelled out in the Uniformed Services Employment and Reemployment Rights Act (USERRA) of 1994, which was designed to minimize job-related disadvantages for veterans, National Guard members and reservists who are called to active duty and have to leave their civilian jobs. People who voluntarily enlist are covered as well.

The law ensures that those who serve their country can retain their civilian employment and benefits by prohibiting discrimination in employment, re-employment, promotion and benefits due to military service.

USERRA covers every individual serving any branch of the armed forces and applies to employers in both the public and private sectors.

“All employers are covered by USERRA; there is no exclusion of government employers like there are in a number of other statues, and there are no exceptions for employers below a certain size,” said Sue Conway, also a partner at Warner Norcross. “It’s pretty much across the board.”

Generally, any employee who leaves a job to serve for up to five years, and is honorably discharged from the service, is entitled to job reinstatement upon re-application with his employer, Dubault explained.

Persons who are dishonorably discharged wouldn’t have the rights under the statute, he said.

Minimally, individuals who serve 90 days or less must be reinstated to their pre-service position or an equivalent job.

Those who serve more than 90 days are entitled to be reinstated to the position they would have attained if not for their absence, or a position of like seniority, status, pay and benefits.

USERRA requires that the period of military duty be counted as covered service with the employer in regard to seniority and for accrued eligibility, vesting and benefit purposes.

In effect, returning service members are treated as if they had been continuously employed.

“The big emphasis is let’s not punish people because they have to take time off,” Dubault said.

“Essentially, they’re supposed to be put back where they otherwise would have been. If they would have been laid off had they stayed working, then they just get placed on layoff when they come back. It doesn’t guarantee them a job if they otherwise wouldn’t have had one.”

There are a couple of other exceptions.

An employer can deny reinstatement due to hardship but has to prove that taking the person back would be impossible or unreasonable given the circumstances.

Also, if an individual’s job was a temporary job, employers aren’t obligated to reinstate them.

The length of employees’ active military service determines how soon they have to apply for reinstatement. If they do not apply within the given time period, the employer is no longer legally obligated to rehire them.

“If they miss out on that, the fallback is the employer’s normal policy regarding leaves of absences,” Dubault noted.

The returning employee does have some protection against discharge following reinstatement, he said.

USERRA prohibits discharge except for cause. As yet there is no definition of what “cause” is, he added.

People who served more than 180 days have the protection for one year. Those who served 30 to 180 days have protection against discharge for six months.

“I think a lot of employers are going to have to keep that in mind because the general rule in Michigan — unless you’re covered by a union contract or some other employment agreement — is that you are employed at will and you can be let go for any reason or no reason.

“Hopefully, employers will recognize that limitation if they run into a situation with a returning service man or woman and are thinking about letting that person go.”

According to the U.S. Department of Labor, individuals on active duty for more than 30 days are automatically covered by military health care, as are their dependents.

Both USERRA and the Consolidated Omnibus Budget Reconciliation Act (COBRA) generally allow activated service members to continue health coverage for themselves and their dependents under an employment-based group health plan for up to 18 months.

“Certainly, the employer’s plan may recognize certain kinds of leaves of absence that continue to provide benefit service during those times,” Dubault added.

An individual who takes military health coverage and lets his employer group health plan lapse while on active duty should be able to re-enter the employer’s health plan upon return to civilian employment.

Generally, a health plan cannot impose a waiting period or other exclusion period if health coverage would have been provided were it not for the individual’s stint in the military, according to the Department of Labor.

“The employer can’t impose a waiting period and they can’t impose a pre-existing condition exclusion period if it otherwise would not have applied,” Conway said.

If an individual’s service is less than 30 days, then he just remains on the employer’s group plan, the same as if he were at work. He pays the same premium.

“If your service is more than 30 days, then you do have a right to stay on the employer’s plan as well as have the military health coverage. In many cases the employer can charge the full cost of the coverage,” Conway said.

“A lot of our clients are going out of their way to make things easier and not charging the full amount that they could.”

Most of the hard issues under the statute don’t arise at the time the person goes off to serve; they arise at the time the person comes back, Dubault said.

“So I think we’re going to see a lot more activity under this statute after things wind down here.”

In his experience, the Department of Defense is “very aggressive” in enforcing the statute and looking out for service members.

“I think employers need to recognize that.”              

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