VETERANS' BENEFITS IMPROVEMENT ACT

A new federal law has enhanced the rights of members of the armed services during active duty and on their return to the civilian workforce. The Veterans' Benefits Improvement Act makes two significant additions to the Uniformed Services Employment and Reemployment Rights Act (USERRA). USERRA is intended to encourage non-career uniformed service by balancing the needs of individuals in those services with the needs of civilian employers who also depend on those same individuals.

Notice Requirement

The first provision requires that civilian employers inform employees of their rights and obligations under USERRA annually. The notice requirement may be met by posting a notice where employers customarily place notices for employees. This part of the new law became effective on March 10, 2005.

Extension of Benefits

The second change is an extension of employer-sponsored health care from 18 to 24 months, beginning with the person's absence from employment because of duty in the armed services. USERRA gives the individual the right to elect to continue coverage under the employer's health plan, even though the coverage otherwise would end because of the individual's absence. A "health plan" encompasses an employer's health, dental, vision, and prescription drug plans, as well as health reimbursement arrangements and flexible spending accounts. The employee, not the employer, pays for the coverage during the employee's absence. This health-care provision went into effect on December 10, 2004.

USERRA, the comprehensive legislation that was changed only in part by the Veterans' Benefits Improvement Act, is far-reaching in its impact, as it applies to private and public employers alike, regardless of size. It is subject to various conditions and exceptions that make a full reading of the law, not to mention professional guidance, advisable. USERRA affects the following areas:

* Reemployment--Employers must grant military leave for employees called to active duty or National Guard or Reserve training. On their return, the employees must get their jobs back or jobs with comparable seniority, status, and pay.

* Payroll--USERRA does not require an employer to continue to pay employees who are away on military duty (though some state laws do).

* Time Off--Employers cannot force employees to use vacation and sick days during military service, but neither do employers have to let vacation and sick days continue to accrue during the employee's absence. If the employer awards vacation days based on length of employment, the returning employee must receive vacation time that would have been given but for the military service.

* Promotions--Returning employees "step back on the escalator," whether it is going up or down. That is, they assume the place in the employer's tenure and seniority scheme that they would have had if their employment had not been interrupted.