Legal Updates

USERRA Final Regulations Effective January 18, 2006

The United States Department of Labor (“DOL”) has issued its final regulations implementing the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”).  These regulations, which became effective January 18, 2006, clarify and provide guidance to employees and employers as to their rights and obligations under USERRA.

USERRA was enacted in October 1994 to protect the employment and reemployment rights of employees who leave their employment voluntarily or involuntarily to undertake military service, including service in the military reserves and the National Guard.  As the preamble to the final regulations makes clear, “[t]his legislation is to be liberally construed for the benefit of those who left private life to serve their country in its hour of great need.”

These regulations apply to virtually all public and private employers in the United States, regardless of size.  Under the regulation’s broad definition of “employer,” including “any person . . . to whom the employer has delegated the performance of employment-related responsibilities,” supervisors and managers may also be held liable under USERRA, unless the functions delegated were purely ministerial in nature.

In introducing the final regulations, the Department of Labor emphasized five (5) major points (all of which are discussed in further detail, below):  (1) Returning service members must be promptly reemployed; (2) returning service members must be given the benefit of the “escalator principle,” meaning they must be restored to the same pay, benefits and seniority they would have if they had remained continuously employed; (3) there are specific timetables that service members must follow when returning to work; (4) disabled service members enjoy significant accommodation rights (discussed below); and (5) employers have significant obligations to employees performing military service, with respect to health, pension and other benefits, both during service and upon reemployment.  More specifically, the final regulations include the following provisions:

• Protected Employees:  USERRA applies to all employees, but does not fully protect certain short-term employees, and does not protect independent contractors.  Specifically, USERRA does not provide reemployment protection to employees who worked “for a brief, nonrecurrent period [where] there is no reasonable expectation that the employment would have continued indefinitely or for a significant period.”  The regulations follow the Fair Labor Standards Act’s economic realities test for determining independent contractor status under USERRA.
• Required Notice in Advance of Service:  USERRA does not specify a required amount of advance notice that employees must provide to employers prior to performing military service, but does refer to Department of Defense regulations that strongly recommend at least thirty (30) days’ notice (if feasible).  The notice given may be informal, and the employee does not need to request the employer’s permission to perform military service.
• Intent to Return to Work:  The employee does not have to specify whether he/she intends to return to work following military leave.  Indeed, the employee’s statement of an intent not to return to work does not waive the right to reemployment after completing military service.
• Healthcare Continuation Coverage:  The regulations clarify that service members have the right to continue their existing employer-based health plan coverage for up to twenty-four (24) months during military service.
• Return-to-Work Timetable:  Service members must follow certain timetables and procedures in the regulations when reporting back to work.  The regulations generally provide for reemployment following a leave of up to five (5) years.  Depending upon the length of the military leave, service members have up to ninety (90) days to apply for reemployment.
• Prompt Reemployment Is Required:  The regulations require employers to “promptly” reemploy returning service members, i.e., within two (2) weeks of the service member’s application for reemployment, absent unusual circumstances. Indeed, the employer may be required to terminate the employment of an individual hired to fill-in for the returning service member during military leave.
• Accommodations Required:  With regard to a disabled service member returning from service, each employer must make reasonable efforts to accommodate the service member’s disability and to help him/her become qualified to perform the functions of his/her position, including providing training to the returning service member.
• Restoration to Employment as if Continuously Employed:  An employee is entitled to be restored to a position that reflects with reasonable certainty the pay, benefits, seniority and other job perquisites that he/she would have attained if continuously employed (a.k.a. an escalator position).
• Non-seniority Benefits Accrue as with Other Types of Leave:  While performing service in the uniformed services, an employee is deemed to be on furlough or leave of absence from the employer and is entitled to the non-seniority rights and benefits generally provided to other employees with similar seniority, status and pay that are on furloughs or leaves of absence.  Accrual of vacation leave is deemed a non-seniority benefit that must be provided to a returning service member only if that benefit is provided to similarly-situated employees on furloughs or leaves of absence.
• Seniority Benefits Accrue as if Continuously Employed:  An employee is entitled to the seniority and seniority-based rights and benefits that he/she had on the date the uniformed service began, in addition to any seniority and seniority-based rights and benefits the employee would have attained if continuously employed.  For example, a reemployed service member would be eligible for FMLA leave if the number of months and hours of work for which the service member was employed, together with the number of months and hours of work for which the service member would have been employed, meet the FMLA’s eligibility requirements.
• “Just Cause” Termination Protection:  Employers are prohibited from terminating the employment of the returning service members “without cause” during the first six (6) months following the return to work from military leave.  This “just cause” protection extends to twelve (12) months if the military service was more than 180 days.

Along with the new regulations, the DOL has also published a final version of its poster containing all of the information required to be provided to employees under USERRA.  The final version of the DOL poster may be found at:

http://www.dol.gov/vets/programs/userra/USERRA_Private.pdf#Non-Federal.

We recommend that employers immediately post the new USERRA poster available from the DOL in the customary place for employee notices in the workplace.

Given the significant number of service members that have been mobilized since September 11, 2001, we strongly recommend that employers become familiar with their obligations under USERRA and the final regulations, and that all employers implement effective procedures to return service members to the workplace.