By Mary F. Patterson

What are an employer’s obligations regarding merit increases and bonuses to employees returning from military service?  According to the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) employers must treat returning military servicemembers as though there was no absence, in most cases.

Under the “escalator” principle, a returning military servicemember is entitled to salary or benefits he/she would have earned based on seniority.  The standard is whether there is reasonable certainty that if the employee remained continuously employed, he/she would have earned the merit increase or bonus. 

 Employers should consider work history, past performance appraisals and work and pay history of employees in the same or similar positions in determining reasonable certainty. If it is reasonably certain the returning servicemember would have received a merit increase if there was no absence, then he/she should receive the merit increase.

 Returning servicemembers should receive a bonus if it is associated with seniority, perfect attendance or other non-discretionary factors.  If the bonus is based on discretionary factors then the military member should be treated as any other non-military employee out on a leave of absence.

 The USERRA Code contains the following definition:

 b) Benefit, benefit of employment, or rights and benefits means any advantage, profit, privilege, gain, status, account, or interest (other than wages or salary for work performed) that accrues to the employee because of an employment contract, employment agreement, or employer policy, plan, or practice. The term includes rights and benefits under a pension plan, health plan, or employee stock ownership plan, insurance coverage and awards, bonuses, severance pay, supplemental unemployment benefits, vacations, and the opportunity to select work hours or the location of employment.

 Section 4316 of the USERRA code states:  Rights, benefits, and obligations of persons absent from employment for service in a uniformed service

(a) A person who is reemployed under this chapter is entitled to the seniority and other rights and benefits determined by seniority that the person had on the date of the commencement of service in the uniformed services plus the additional seniority and rights and benefits that such person would have attained if the person had remained continuously employed.

(b)(1) Subject to paragraphs (2) through (6), a person who is absent from a position of employment by reason of service in the uniformed services shall be–

(A) deemed to be on furlough or leave of absence while performing such service; and

(B) entitled to such other rights and benefits not determined by seniority as are generally provided by the employer of the person to employees having similar seniority, status, and pay who are on furlough or leave of absence under a contract, agreement, policy, practice, or plan in effect at the commencement of such service or established while such person performs such service.

If you have any questions regarding returning servicemembers and their rights under USERRA, feel free to contact Silvers HR at (916) 791-8506.

 Copyright 2011 Silvers HR, LLC

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