This wonderful nation – and the working economies it affords – will remain the land of the free only so long as it is the home of the brave. That philosophy is advanced in the workplace through the statutory and regulatory requirements of USERRA, the Uniformed Services Employment and Reemployment Rights Act.
USERRA, Briefly. USERRA imposes strict requirements on employers of re-entering service members. Pursuant to USERRA, re-entering employees should be rehired in accordance with what is called the “escalator principle,” being a principle designed to accommodate an up-the-ladder promotion even in the event of military leave. In addition, USERRA entitles service members on military leave to certain benefits as if they were continuously employed. There are essentially two types of benefits in this regard: seniority-based benefits and non-seniority-based benefits.
Seniority-Based Benefits. Seniority-based benefits are those that are provided to employees based on, essentially, tenure or length of service. Seniority-based bonuses are generally required to be paid to employees for their position in accordance with the escalator principle. Company policies are important factors to consider in this evaluation, though most employee handbooks or policies do not provide any mention of seniority-based benefits and non-seniority-based benefits (which is not unusual or unexpected). To determine whether a benefit is a seniority-based benefit, the following factors must be considered:
- Whether the benefit is a reward for length of service rather than a form of compensation for work performed;
- Whether it is reasonably certain that the employee would have received the benefit if he or she had remained continuously employed during the period of service;
- Whether it is the employer’s actual custom or practice to provide or withhold the right or benefit as a reward for length of service.
Non-Seniority-Based Benefits. Non-seniority-based benefits include bonuses contingent on attendance and performance. USERRA requires that employers provide re-entering service members non-seniority-based benefits if the employer also provides the benefits to employees on “comparable” forms of leave. Whether military leave during the applicable program period is “comparable” to other leave taken during the program period (such as maternity leave, leave pursuant to the Family and Medical Act Leave, or sick leave) depends primarily on (1) the duration of the leave, (2) the purpose of the leave, and (3) the ability of the employee to choose when to take the leave.
Insights. Employers are wise to ensure their policies and practices honor those employees who serve this great nation through any of the branches of armed forces or the national guard and then return to re-enter the workforce. Having well-defined performance-based and seniority-based benefits program – and, equally importantly, an understanding of USERRA’s requirements –will help ensure appropriate transparency, compliance, and recognition of those employees who sacrifice more than just their time and talents for the employer.
Substantial contributions to this blog were made by Devin Hludzik, associate attorney of Freeman Law, PLLC.
