The Employer’s Legal Call to Duty

Federal officials are reminding employers that returning military reservists should not be penalized for the time they spent serving their country. If any of your employees are returning from active duty, or being called up, federal law requires certain steps to be taken to protect their jobs and benefits (State military leave laws may provide additional rights).

The purpose of the Uniformed Services Employment and Reemployment Rights

Low-Interest Loans for Firms Hurt by Reservist Call-Up Organizations with “essential employees” who are called to active military duty may be eligible for financial relief from Uncle Sam.     Under a law passed in 1999, companies may qualify for low-interest loans from the Small Business Administration (SBA).     The law is designed to help organizations meet necessary operating expenses that are difficult to cover because a key employee is called up to active duty. An essential employee is defined as “an individual whose managerial or technical expertise is critical to the successful day-to-day operations of a small business.”     The most an organization can borrow is generally $2 million. Interest rates fluctuate, depending on economic conditions, but is capped at 4 percent. For more information about the Military Reservist Economic Injury Loan program, go to the Small Business Administration Web site by clicking here.

Act (USERRA) is to ensure that people who serve their country aren’t discriminated against in the workplace. Of course, this call to duty can create some hardship at some organizations. Those deployed may receive little notice and employers often have difficulty operating smoothly during their absences.

Your obligations are triggered when an employee is called up to active duty or training in the uniformed services. Here’s a brief look at what the law requires.

To be protected, employees must pass five tests:

• Job status. Employees must hold a permanent job in the private or public sector. Unlike some laws, USERRA provides no exceptions for small businesses with less than a certain number of employees.
• Notification. Staff members must tell their employers in advance — orally or in writing — that they’re volunteering or being called for duty, unless notification is impossible because of a military emergency.
• Duration. Employees must generally return to work within five years.
• Discharge. An employee must be honorably discharged. Protection ends if the he or she is dishonorably discharged or dismissed for reasons such as bad conduct.
• Prompt return. After returning home, service members must report to work within a specified period of time. The exact time varies with the time spent in active duty.

If an employee passes these tests, your organization’s responsibilities kick in. Here are the three top duties:

• Rehiring.
• Benefits. Although you aren’t required to pay their salaries while employees are away, you must continue health benefits if the service members elect to retain coverage. You can charge them the normal employee share for 30 days. After that, you can charge up to 102 percent of the premium. When the service members return to work, they are entitled to immediate coverage for themselves and any previously covered dependents. You must also continue retirement benefits. The time served can’t be considered a break in service, so vesting and benefit accruals must continue. Organizations are generally required to allow employees to make up lost contributions for a certain period of time and match any contributions or deferrals.
• Leave policy. You must give employees any earned vacation time, in addition to leave for military training. You cannot force someone to use annual vacation or personal leave for military service, although an employee can choose this option.

Contact your attorney for more information.