The War at Home: Learning the Recent Changes to Military Leave Laws

1. The War at Home:Learning the Recent Changes to Military Leave Laws James B. Avey phd Information also provided by tracy stott pyles, esq. Littler medelson – Columbus The national employment & labor law firm

2. Introduction • This presentation will cover: • An overview of the Uniformed Services Employment and Reemployment Rights Act (USERRA) • Department of Labor’s (DOL) new regulations implementing USERRA; and • Practical tips on how to keep leave administration in compliance with new regulations

3. The War At Home

4. Deployment Around the Globe • At present there are approximately 1.8 million personnel on active military duty • Additional 860,000 personnel active in one of seven Reserve military components

5. Deployment Around the Globe cont. • National Guard and Reserve units make up 50% of ground forces in Iraq • 6,000+ troops patrolling the Mexican border

6. Extended Service Requirements • Prior to 9/11, National Guard limited deployment to no more than 6 months overseas • Due to strains after 9/11, deployment time increased to 18 months • Due to additional strains after Iraq invasion, deployment time increased to current 24 months

7. Meet Doug • 15 year employee of Big Box Electronics • Runs division located in Milwaukee, WI • 40 years old • Colonel in Army National Guard

8. Meet Doug cont. • National Guard unit being deployed in 30 days • Will spend 2 months training in US • Will be deployed directly to Iraq for 16 months • Advised supervisor of deployment • Doesn’t have paperwork yet

9. Meet Charlie • Employed by Small Time Printing, a 20 employee operation in Memphis, TN • Started with Small Time 6 months ago • Member of collective bargaining unit • Works as 1 of only 2 printing press assistants • Other assistant employed by Small Times for only 4 months

10. Meet Charlie cont. • Not a member of an military reserve unit • Has decided to enlist in the Army for 2 years • Advised his supervisor of his enlistment • Required to report for active duty training in 10 days

11. The Uniformed Services Employment and Reemployment Rights Act

12. USERRA Basics • Applies to all private and public employers, regardless of size • No minimum length of employment required before eligible for military leave • Applies to all types of military leave • Applies whether military leave taken on a voluntary or involuntary basis • Establishes a floor for military leave obligations • States may enact more stringent requirements but can’t establish less than what USERRA already requires

13. USERRA – Notice Requirements • Notice Period • Employee required to provide advance notice of military leave obligations • USERRA doesn’t specify notice period • Even short notice may still entitle employee to USERRA benefits

14. USERRA – Notice Requirements cont. • Documentation • Employee need not initially provide written orders • Oral notice sufficient to impose duty on employer to provide leave • Employers ultimately entitled to receive copy of written orders once issued

15. USERRA - Verification • Employer entitled to contact employee’s commanding officer to verify accuracy of written orders • Cannot deny leave because orders not issued yet

16. Doug’s and Charlie’s Leave Requests • Doug’s and Charlie’s requests for military leave comply with USERRA’s notice requirements • Employees entitled to leave in almost all circumstances, even if little notice is given

17. What Happens While Doug & Charlie Are On Military Leave • Leave is unpaid • Employees do not accrue benefits • Sick leave, PTO or Vacation Time • Employees entitled to maintain levels of PTO, sick leave or vacation time they had prior to military leave. • Employees cannot be forced to use accrued benefits while on military leave (but can voluntarily do so)

18. What Happens While Doug & Charlie Are On Military Leave cont. • Employees do not accrue payments to pension funds or 401k plans • Employees may be placed on COBRA like continuation coverage or ERISA-based benefit plans for up to 24 months (2 years) • New regulation – Employees can take time off prior to start of military service to put personal affairs in order • Employees can work in non-military positions without jeopardizing leave rights • For example, employee deployed to military base within US can seek a second job after hours

19. USERRA and Reinstatement

20. Reinstatement Requirements for Employees • Two requirements for reinstatement • Employee must obtain discharge from military service that is anything other than dishonorable • Employees must contact former employer and seek reinstatement within prescribed time period

21. USERRA – Period for Seeking Reinstatement • Depends upon amount of military leave taken by employee • Less than 31 days: employee must report back to work no later than the beginning of the first full regularly scheduled work period on first full calendar day following completion of military service + 8 hours travel • More than 30 days but less than 180 days: employee must apply for reemployment within 14 days of the completion of military service • More than 180 days: employee must apply for reemployment within 90 days of the completion of military service

22. Doug’s and Charlie’s Time for Seeking Reinstatement • Sine both Doug and Charlie have been gone in excess of 180 days, they both have 90 days from the completion of military service to seek reinstatement

23. DOL New Reinstatement Regulations • An employee’s statements prior to military leave do not impact employer’s reinstatement obligations • If Charlie commented prior to leave that he intended to make a career of military service and not return to work, this would not relieve Small Time of its obligations to reinstate him.

24. DOL New Reinstatement Regulations • During the reemployment time period, he may seek out new employment with another employer • If Doug were to seek new employment within the 90-day reemployment period, Big Box Electronics may not deny him reinstatement for that reason

25. Reinstatement Obligations for Employers – “Promptly” Reemploy • Employer required to “promptly” reemploy the returning employees • “Prompt reemployment” differs depending upon length of service • Usually within several weeks • DOL Regulations recognize that “prompt” reemployment may take longer for individuals on leave for several years

26. Reinstatement – Escalator Principle • Employer required to reinstate an employee to the position he would have attained with “reasonable certainty” but for military service • Employer required to go beyond simply reinstating employee to prior position • Employer may be required to advance employee to higher position • Proper point for determining reemployment is the position employee would have attained if continuously employed • Not employee’s prior position

27. Application of Escalator Principle • Easy to apply in strict seniority situations (like Charlie’s, with a union seniority system) • Application to non-seniority system more difficult

28. Doug and the Escalator Principle • Manager of 1 of 5 divisions of Big Box Electronics • Reported directly to VP of Operations • During Doug’s military service, VP of Operations retired • Big Box interviewed other 4 division managers, along with 3 external candidates • 1 of 4 other division managers selected as new VP of Operations

29. Doug and the Escalator Principle cont. • Question: Whether with reasonable certainty it can be said that Doug would have attained the VP of Operations position • Employer to look at hiring decision • Doug’s performance prior to leave • Doug’s relationships with executives, overall company experience • Doug’s “candidacy” as compared to other candidates

30. Application of Escalator Principle • Layoffs, reductions in force, business consolidations • Escalator can go down • Principle may cause employee to be laid-off or terminated as a result of business conditions

31. Doug and the Escalator Principle • Doug’s Milwaukee division consolidated with Dallas, Texas division Question: What would have happened to Doug’s employment at that time: • Doug chosen to head up new division? • Demoted? • Terminated?

32. Escalator Principle - Documentation • Be aware of situations in which an employee on military leave may later assert entitlement to a position • Keep appropriate records of decision-making process used to fill open positions or to cut positions

33. Reemployment Considerations • Reemployment position includes seniority, status and rate of pay employee would have ordinarily attained based on job history • Includes prospects for future earnings, i.e. merit pay increase

34. Reemployment - Merit Pay Increases • Merit Pay • To extent truly based on merit, an employer may not need to provide this increase to employee returning from military service. • If merit more based upon seniority, employer may be obligated to provide increase

35. Reemployment – “Reasonable Efforts” • Employer must make “reasonable efforts” to help employee become qualified to perform duties of position at issue

36. “Reasonable Efforts” and Charlie • Charlie had seniority to attain position as printing press operator during military service • Small Time Printing required to offer Charlie printing press position and provide him with “reasonable efforts” to qualify him for the position • “Reasonable efforts” determined on position by position basis.

37. “Reasonable Efforts” and Charlie cont. • If Charlie doesn’t qualify for position despite “reasonable efforts,” Small Time must reemploy him into position he held prior to leave. • If Charlie not qualified to perform duties of prior position, Small Time must reemploy him in any position nearest to first escalator position and, then, to pre-service position.

38. Benefits Upon Return From Military Leave • Entitled to receive rate of pay and benefits would have received if remained continuously employed • Look to what would have happened to employee if he remained employed

39. Doug and Vacation Benefits • Doug entitled to 3 weeks vacation prior to military leave • During leave vacation would have increased to 4 weeks • Doug entitled to 4 weeks upon reinstatement

40. Benefits Upon Return From Military Leave – 401(k) & Defined Benefit Plans • Employer must make contributions to defined benefit plan or allow employee to make contributions to 401k plan over a period that equals 3 times the length of military leave • If employer makes matching 401k contributions, its obligation to make those contributions commences when employee reaches contribution level needed for matching

41. Termination – For “Cause” • USERRA protects employees returning form military leave beyond date of reinstatement • Service exceeded more than 30 days but less than 181 days, employee may not be discharged except for “cause” for a period of 180 days after reemployment. • Service exceeded more than 180 days, employee may not be discharged except for “cause” for 1 year after reemployment.

42. Termination – For “Cause” cont. • DOL Regulations Define for “Cause”: • Employer bears the burden of proving it is reasonable to have discharged for conduct, and that employee had notice that conduct would constitute cause for discharge

43. Termination – For “Cause” cont. • Other Legitimate Non-Discriminatory Reasons: • Lay-offs and job elimination constitute for “cause” • Employer still bears burden of proving employer’s job would have been eliminated or employee laid off, despite military service

44. Any Questions?