Employees in the Military • Northwest Indiana Business Magazine

Employees in the Military

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Law guarantees veterans a place back on the “escalator.”

The return of our soldiers from Iraq refocuses attention on the re-employment rights of employees who were called into active duty.

The Uniformed Services Employment and Reemployment Rights Act (USERRA) protects employees who are called into active duty. One provision – the escalator concept – is especially important. Think of employment as an escalator. At some point, all of us step on the escalator, and move through our employment on it. At a different time, all of us step off the escalator, but a different place from where we stepped on.

Under USERRA's escalator clause, employers must ensure that returning uniformed service members return to the position, including seniority, that the uniformed service member would have occupied if he or she remained continuously employed.

This is not necessarily the same position the employee had prior to the uniformed service. For example, during the period the employee was in the service, if he had not been called to duty, he might have been promoted or laid off.

The escalator principle also applies to pay and benefits. For example, returning uniformed service members should be given the benefit of any cost-of-living increases or any other across-the-board increases given during the employee's period of uniformed service.

The same rule also applies to merit pay increases the employee would have received but for the active service. To help determine merit pay increases that are based on performance reviews that could not take place while the service member was away, an employer should look at the employee's performance review during the employee's prior period of active employment.

USERRA also applies to promotions. In other words, as the employment escalator advances, employees may move up steps. Employers often overlook this requirement. If an employee is protected by USERRA during the employee's absence, the employer must track promotions to which the employee would have been eligible to receive.

A recent case highlighted the application of the escalator concept and USERRA's requirement that employees are entitled to be reinstated to a position of like “seniority, status and pay.” The employee worked as a financial advisor and was paid on a commission basis. He was called to active duty. During his deployment, many of his accounts were lost or redistributed to other commissioned salespersons.

Upon discharge from active duty, the employee sought reinstatement pursuant to USERRA. His employer offered him a position at his previous commission structure, with a small monthly draw, while he rebuilt opportunities for cold calling clients.

The court found that the employer violated USERRA. The court held that the employer should have done more, perhaps offering a guaranteed compensation and related assistance for a reasonable period of time while the service member sought to rebuild his
previously existing book of business.

The number of USERRA cases is on the increase. As we wind down our military presence in the Middle East, more employees will be returning to the workplace. Employers must be increasingly sensitive to the requirements of USERRA, and to the need to uniformly apply them.

James L. Jorgensen, a partner with Hoeppner, Wagner and Evans, practices in the areas of labor, employment, banking and business law. His representation of business clients ranges from small, closely-held business to American subsidiaries of foreign corporations. Mr. Jorgensen is a frequent lecturer to various business groups, publishes extensively in business journals, and was an adjunct professor at the Valparaiso University School of Law for over 10 years.


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