What To Do When Your Employee Is Called...
From September 11, 2001, more than 300,000 men and women have been called to active duty for homeland security. If you are affected, take the necessary actions to safeguard your business and avoid legal problems.
Job protection
The rights of an employee and the obligations of an employer with respect to a leave of absence for military service are governed by the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). There is no exemption from this law for small businesses.
When an employee is called up.
You can’t do anything about it – even if it’s a key employee or yourself, the business owner.
Your employee must notify you about his or her military orders – in writing or orally. But the employee has no responsibility to find a replacement or help you with scheduling.
You do not have to pay an employee while on military leave. Some companies, however, voluntarily make up the difference between military pay and the employee’s regular compensation. Some states have laws requiring make-up pay but they do not seem to be enforced.
When an employee’s military service is over.
You must reinstate a former employee if he or she requests it and returns to the job within certain time limits. If military service runs…
- From one to 30 days: The employee must return to work at the beginning of the next regularly scheduled work period on the first full day following completion of service and an eight-hour rest period after returning home.
- From 31 to 180 days: A request for reinstatement must be made to you no later than 14 days after completion of military service.
- 181 days or more: A request for reinstatement must be made to you no later than 90 days after completion of military service.
These periods may be extended for up to two years if the employee is convalescing due to a service-related disability or injury. You must make reasonable accommodations for any such disability or injury.
An employee may return to the same or a new position, depending on the length of military service.
Returning the employee to a position that has been held by someone else for the duration of military service means displacing the interim worker. Use tact and creativity to keep all workers happy, both those who stay during military conflict and those who serve in the armed forces.
Health care
If you regularly have 20 or more employees, you must offer COBRA coverage to any who are called up. But as a practical matter most will probably not take it because the federal government offers comprehensive health coverage through TRICARE (a government-funded HMO) to military personnel (free), their spouses and dependents (low cost). Only those with serious health conditions are likely to continue participating in your plan through COBRA.
Retirement plans
You aren’t required to make contributions on behalf of employees who are away on active duty. But if they return to the job, you must contribute what you would have had they not been away. Military leave is not considered a “break in service” under the plan. This time is treated as a period of employment for purposes of eligibility to participate, vesting and benefit accruals.
Employees have the option of making the contributions they would have made had they remained on the job. There is an extended period for doing so (three times the length of military service or five years, whichever is less).
If an employee called to active duty has an outstanding plan loan, the interest rate on the loan during the period of military service cannot exceed 6%. You may consider amending the plan to allow you to suspend loan repayment requirement during the period of service.
If you have a 401(k) plan, though not required you may wish to amend it so that an employee on active duty can designate someone to make investment decisions during the military leave.
Employer assistance
If you or key employees are called to active duty, who will run your business? Make plans now.
Idea: You may qualify for a special loan program called the Military Reservist Economic Injury Disaster Loan (MREIDL) from the SBA. The loan can be used to meet operating expenses (payroll, fixed debts, etc.) during the period of military conflict and is repayable over a period of up to 30 years at 4% interest.
For more information, visit Employer Support of the Guard and Reserve at www.esgr.org and the Department of Labor at www.dol.gov/reservists.
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