Although the major military component of the war in Iraq seems over, work continues for lawyers concerning questions about the federal Uniformed Services Employment and Re-Employment Rights Act and the rights of employees called to military service. Employer questions range from how long jobs must be held open and whether employee benefits must continue to whether they must extend deadlines for pre-tax spending reimbursements.
By Jeff Blumenthal|April 25, 2003 at 12:00 AM
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Even though the major military component in the war in Iraq appears to be over, work continues for employee benefits and labor and employment lawyers who have spent the past several months answering their clients’ questions about obligations when employees are called to military service. But unlike in the last Gulf war 12 years ago, there is now a concrete federal mandate about how to proceed in such instances. The Uniformed Services Employment and Re-Employment Rights Act (USERRA), enacted by Congress in 1994, outlines the re-employment rights of guardsmen and reservists called to active duty. It provides that an employee who leaves his or her job to train or serve in the military has a right to re-employment upon return from service as well as a right to certain benefits during his or her absence. USERRA was enacted partly to encourage non-career military service by trying to minimize the risk to job and benefit status posed by being called to active duty. The act prohibits employment discrimination against guardsmen and reservists by stating that employers cannot deny them employment, re-employment, promotion or benefits because of their military service. It also prohibits retaliation against those asserted rights provided by the act. Pennsylvania ERISA and labor and employment lawyers said that most queries are coming from midsize and small companies, as large corporations have adjusted their employee handbooks to accommodate USERRA. “I started getting calls in January,” Saul Ewing labor and employment partner James Kilcur said, shortly before U.S. troops arrived in Baghdad. “And I expect more when the war ends and the employees start coming home. Smaller companies feel the brunt of it more, because in some cases, they are losing key employees. Larger companies have more people to pick up the slack.” Pepper Hamilton ERISA partner Susan Katz Hoffman said that the most interesting questions she has received involve pre-tax spending accounts for child care or medical expenses. Employees have a fixed amount of time — set by the employer — to submit requests for reimbursement from the 2002 account or they forfeit it. Employers want to know if they can extend the time in which such requests must be submitted by employees who are away on active duty. “I just reassure them that there is nothing in the tax law that says it has to be in at a certain time,” Hoffman said. “I just think that employers want to make sure they are being fair by their employees.” After getting calls from a number of clients, John Licari, a labor and employment partner at Stradley Ronon Stevens & Young, produced a client newsletter last month titled “What You Need to Know About the Rights of Reservists.” Among other things, Licari said, clients wanted to know how long they were obligated to hold jobs, whether they had to continue to provide employee benefits, and what employees were entitled to upon their return. The newsletter advises clients as to their obligations under USERRA, specifically regarding benefits during military leave and the conditions of re-employment. While on active duty, an employee must be treated as being on a leave of absence, and his or her benefits would continue for the same period of time as they would for other types of leaves of absence. But there are some special rules regarding certain benefits that emanate from USERRA. If an employee’s health insurance terminates because of military leave, he or she may continue the health insurance for up to 18 months, at the employee’s own cost. While USERRA does not provide any special retirement plan rights during military leave, special rules apply to employees with outstanding loans under their retirement plan. Interest rates must be reduced to 6 percent, and payments may be suspended during service. As for vacation, employers cannot force an employee to use accrued vacation time during military leave, but they do have to allow employees to use vacation time instead of taking unpaid leave. Under USERRA, a reservist has the right to re-employment if the following conditions have been met:
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