[Federal Register Volume 69, Number 181 (Monday, September 20, 2004)]
[Proposed Rules]
[Pages 56266-56301]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20844]



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Part II





Department of Labor





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Veterans' Employment and Training Service



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20 CFR Part 1002



Regulations Under the Uniformed Services Employment and Reemployment 
Rights Act of 1994, as Amended; Proposed Rule

  Federal Register / Vol. 69, No. 181 / Monday, September 20, 2004 / 
Proposed Rules  

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DEPARTMENT OF LABOR

Veterans' Employment and Training Service

20 CFR Part 1002

[Docket No. VETS-U-04]
RIN 1293-AA09


Regulations Under the Uniformed Services Employment and 
Reemployment Rights Act of 1994, as Amended

AGENCY: Veterans' Employment and Training Service, Department of Labor.

ACTION: Proposed rules.

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SUMMARY: The Veterans' Employment and Training Service (``VETS'' or 
``the Agency'') is issuing proposed rules that would implement the 
Uniformed Services Employment and Reemployment Rights Act of 1994, as 
amended (USERRA). Congress enacted USERRA to protect the rights of 
persons who voluntarily or involuntarily leave employment positions to 
undertake military service. USERRA authorizes the Secretary of Labor 
(in consultation with the Secretary of Defense) to prescribe rules 
implementing the law as it applies to States, local governments, and 
private employers. VETS is proposing these rules under that authority 
in order to provide guidance to employers and employees concerning 
their rights and obligations under USERRA. The Agency invites written 
comments on these proposed rules, and any specific issues related to 
this proposal, from members of the public.

DATES: Comments regarding this proposal, including comments on the 
information-collection determination described in Section V of the 
preamble (``Paperwork Reduction Act''), must be received by the Agency 
on or before November 19, 2004. Please see the sections below entitled 
ADDRESSES and SUPPLEMENTARY INFORMATION for additional information on 
submitting comments.

ADDRESSES: You may submit comments, identified as ``Docket No. VETS-U-
04,'' by any of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    Electronic mail (email): [email protected]. Include ``Docket No. 
VETS-U-04'' on the subject line of the message. You can attach 
materials that are in Microsoft Office formats such as Word, Excel, and 
Power Point. Attachments may also be made using Adobe Acrobat, Word 
Perfect, or ASCII/text documents. You cannot attach materials using 
executables (.exe, .com, .bat) or any encrypted zip files.
    Facsimile (fax): VETS at 202-693-4754.
    Mail, Express Delivery, Hand Delivery, and Messenger Service: 
Submit an original and three copies of written comments and attachments 
to the Office of Operations and Programs, Docket No. VETS-U-04, Room S-
1316, U.S. Department of Labor, 200 Constitution Ave., NW., Washington, 
DC 20210; telephone (202) 693-4711. If possible, provide your written 
comments on a computer disc. Contact Mr. Bob Sacoman at (202) 693-4721 
with any formatting questions. Normal hours of operation for the VETS 
Office of Operations and Programs and the Department of Labor are 8:15 
a.m. to 4:45 p.m., Eastern Time, Monday through Friday (except Federal 
holidays).
    Note that security-related problems may result in significant 
delays in receiving comments and other written materials by regular 
mail. Contact Mr. Charles Dawson, VETS Office of Operations and 
Programs, at (202) 693-4711 for information regarding security 
procedures concerning delivery of materials by express delivery, hand 
delivery, and messenger service.
    Docket Access: All comments and submissions will be available for 
inspection and copying in the VETS Office of Operations and Programs at 
the address above during normal hours of operation. Contact Mr. Charles 
Dawson, VETS Office of Operations and Programs, at (202) 693-4711 for 
information about access to the docket submissions. Because comments 
sent to the docket are available for public inspection, the Agency 
cautions commenters against including in their comments personal 
information such as social security numbers and birth dates.

FOR FURTHER INFORMATION CONTACT: For information, contact Charles 
Dawson, Office of Operations and Programs, Veterans' Employment and 
Training Service (VETS), U.S. Department of Labor, Room S1316, 200 
Constitution Ave., NW., Washington, DC 20210. Telephone: 202-693-4711 
(this is not a toll-free number). Electronic mail: 
[email protected].
    For press inquiries, contact Michael Biddle, Office of Public 
Affairs, U.S. Department of Labor, Room S-1032, 200 Constitution 
Avenue, NW., Washington, DC 20210. Telephone: 202-693-5051 (this is not 
a toll-free number). Electronic mail: [email protected].

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Department of Labor proposes to issue regulations to implement 
the Uniformed Services Employment and Reemployment Rights Act of 1994, 
as amended (USERRA), 38 U.S.C. 4301-4333. Congress enacted USERRA to 
protect the rights of persons who voluntarily or involuntarily leave 
employment positions to undertake military service. Section 4331 of 
USERRA authorizes the Secretary of Labor (in consultation with the 
Secretary of Defense) to prescribe regulations implementing the law as 
it applies to States, local governments, and private employers. 38 
U.S.C. 4331(a). The Department has consulted with the Department of 
Defense, and proposes these regulations under that authority in order 
to provide guidance to employers and employees concerning the rights 
and obligations of both under USERRA. The Department invites written 
comments on these proposed regulations from interested parties. The 
Department also invites public comment on specific issues.
    USERRA was enacted in part to clarify prior laws relating to the 
reemployment rights of service members, rights that were first 
contained in the Selective Training and Service Act of 1940, 54 Stat. 
885, 50 U.S.C. 301, et seq. USERRA's immediate predecessor was the 
Vietnam Era Veterans' Readjustment Assistance Act of 1974, 38 U.S.C. 
2021-2027 (later recodified at 38 U.S.C. 4301-4307 and commonly 
referred to as the Veterans' Reemployment Rights Act), which was 
amended and recodified as USERRA.
    In construing USERRA and these prior laws, courts have followed the 
Supreme Court's admonition that:

    This legislation is to be liberally construed for the benefit of 
those who left private life to serve their country in its hour of 
great need * * * And no practice of employers or agreements between 
employers and unions can cut down the service adjustment benefits 
which Congress has secured the veteran under the Act.

See Fishgold v. Sullivan Drydock and Repair Corp., 328 U.S. 275, 285 
(1946), cited in Alabama Power Co. v. Davis, 431 U.S. 581, 584-85 
(1977); King v. St. Vincent's Hosp., 502 U.S. 215, 221 n.9 (1991). The 
Department intends that this interpretive maxim apply with full force 
and effect in construing USERRA and these proposed regulations.
    This preamble also selectively refers to many other cases decided 
under USERRA and its predecessor statutes, to explain and illustrate 
the rights and benefits established under the Act. The failure to cite 
or refer to a particular

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court decision in this preamble is not intended to indicate the 
Department's approval or disapproval of the reasoning or holding of 
that case.

II. Plain Language

    The Department wrote this proposed rule in the more personal style 
advocated by the Presidential Memorandum on Plain Language. ``Plain 
language'' encourages the use of:
     Personal pronouns (we and you);
     Sentences in the active voice; and,
     A greater use of headings, lists, and questions.
    In this proposed rule, ``you,'' ``I,'' and ``my,'' refers to 
employees because they are the primary beneficiaries of USERRA rights 
and benefits. The Department recognizes and appreciates the value of 
comments, ideas, and suggestions from members of the uniformed 
services, employers, industry associations, labor organizations and 
other parties who have an interest in uniformed service members' and 
veterans' employment and reemployment benefits. The Department would 
appreciate comments and suggestions from all parties on this proposed 
rule and on language that would improve the clarity of this regulation.

III. Electronic Access and Filing

    You may submit comments and data by sending electronic mail (E-
mail) to: [email protected]. Include ``Docket No. VETS-U-04'' on the 
subject line of the message. You can attach materials that are in 
Microsoft Office formats such as Word, Excel, and Power Point. 
Attachments may also be made using Adobe Acrobat, Word Perfect, or 
ASCII/text documents. You cannot attach materials using executables 
(.exe, .com, .bat) or any encrypted zip files.

IV. Summary of Proposed Regulations

Subpart A--Introduction to the Regulations Under the Uniformed Services 
Employment and Reemployment Rights Act of 1994

General Provisions
    Proposed sections 1002.1 through 1002.7 describe the regulation's 
purpose, scope, and background, as well as the sense of the Congress in 
enacting USERRA. Proposed Section 1002.1 sets out the purpose of these 
regulations. See 38 U.S.C. 4301. Proposed Sections 1002.2 through 
1002.4 provide additional background on USERRA, its effective date, and 
its purposes. Proposed section 1002.5 defines the important terms used 
in the regulation. See 38 U.S.C. 4303. Proposed sections 1002.6 and 
1002.7 describe the general coverage of the rule, its applicability and 
its relationship to other laws, contracts, agreements, and workplace 
policies and practices. See 38 U.S.C. 4302. The Federal Office of 
Personnel Management has issued a separate body of regulations that 
govern the USERRA rights of Federal employees. See 5 CFR part 353.

Subpart B--Anti-Discrimination and Anti-Retaliation

Protection From Employer Discrimination and Retaliation
    USERRA prohibits an employer from engaging in acts of 
discrimination against past and present members of the uniformed 
services, as well as applicants to the uniformed services. 38 U.S.C. 
4311(a). The anti-discrimination prohibition applies to both employers 
and potential employers. No employer may deny a person initial 
employment, reemployment, retention in employment, promotion, or any 
benefit of employment based on the person's membership, application for 
membership, performance of service, application to perform service, or 
obligation for service in the uniformed services. USERRA also protects 
any person who participates in an action to protect past, present or 
future members of the uniformed services in the exercise of their 
rights under the Act. The Act prohibits any employer from 
discriminating or taking reprisals against any person who acts to 
enforce rights under the Act; testifies in or assists a statutory 
investigation; or, exercises any right under the statute pertaining to 
any person. 38 U.S.C. 4311(b). A person is protected against 
discrimination and reprisal regardless whether he or she has served in 
the military.
    Proposed sections 1002.18, 1002.19 and 1002.20 implement the 
protections of section 4311(a) and (b). Proposed section 1002.21 makes 
clear that the prohibition on discrimination applies to any employment 
position, regardless of its duration, including a position of 
employment that is for a brief, non-recurrent period, and for which 
there is no reasonable expectation that the employment position will 
continue indefinitely or for a significant period. Proposed section 
1002.22 explains who has the burden of proving that certain action 
violates the statute. The Department requests comment on the 
application of the anti-discrimination provisions of the Act to 
potential employers.
    In order to establish a case of employer discrimination, the 
person's membership, application for membership, performance of 
service, application for service, or obligation for service in the 
uniformed services must be a ``motivating factor'' in the employer's 
actions or conduct. 38 U.S.C. 4311(c)(1). Section 4311(c) sets out an 
evidentiary scheme like that followed by the National Labor Relations 
Board in interpreting the National Labor Relations Act, as explained by 
the United States Supreme Court in NLRB v. Transportation Management 
Corp., 462 U.S. 393, 401 (1983). See Gummo v. Village of Depew, NY, 75 
F.3d 98, 106 (2d Cir. 1996) (citing S.Rep. No. 158, 103d Cong., 2d 
Sess. 45 (1993), and H.R. Rep. No. 65, 103d Cong., 2d Sess. 18, 24 
(1993). The initial burden of proving discrimination or retaliation 
rests with the person alleging discrimination (the claimant). The 
burden then shifts to the employer to prove that it would have taken 
the action anyway, without regard to the employee's protected status or 
activity. If the employer successfully establishes such an affirmative 
defense, the claimant can prevail only by showing that the employer 
would not have taken the action, but for the claimant's protected 
activity.
    A person alleging discrimination under USERRA must first establish 
that his or her protected status as a past, present or future service 
member was a motivating factor in the adverse employment action. See 
Robinson v. Morris Moore Chevrolet-Buick, Inc., 974 F. Supp. 571 (E.D. 
Tex. 1997). The claimant alleging discrimination must prove the 
elements of a violation--i.e., membership in a protected class (such as 
past, present or future affiliation with the uniformed services); an 
adverse employment action by the employer or prospective employer; and 
a causal relationship between the claimant's protected status and the 
adverse employment action (the ``motivating factor''). To meet this 
burden, a claimant need not show that his or her protected status was 
the sole cause of the employment action; the person's status need be 
only one of the factors that ``a truthful employer would list if asked 
for the reasons for its decision.'' Kelley v. Maine Eye Care 
Associates, P.A, 37 F. Supp.2d 47, 54 (D. Me. 1999); see Robinson, 974 
F. Supp. at 575 (citing Price Waterhouse v. Hopkins, 490 U.S. 228, 250 
(1989) (addressing Title VII gender discrimination claim and related 
defense)). ``Military status is a motivating factor if the defendant 
relied on, took into account, considered, or conditioned its decision 
on that consideration.'' Fink v. City of New York, 129 F.Supp.2d 511, 
520 (E.D.N.Y. 2001), citing Robinson, 974 F.Supp. at

[[Page 56268]]

576. The employee is not required to provide direct proof of employer 
animus at this stage of the proceeding; intent to discriminate or 
retaliate may be established through circumstantial evidence. See 
Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003); United States Postal 
Service Bd. of Governors v. Aikens, 460 U.S. 711, 714 (1983). If the 
employer fails to counter this evidence, the claimant's proof 
establishes that the adverse employment action was more likely than not 
motivated by unlawful reasons.
    After the employee establishes the elements of a violation, the 
employer may avoid liability by proving that the claimant's military 
status was not a motivating factor in the adverse employment action. 
See Gummo, 75 F.3d at 106. The employer must demonstrate that it would 
have taken the same adverse action for legitimate reasons regardless of 
the claimant's protected status. If the employer satisfies this burden 
of proof, then the employee can prevail only by demonstrating that the 
employer would not have taken the action but for the prohibited motive. 
This burden may be satisfied either directly by proving that a 
discriminatory reason more likely motivated the employer, or indirectly 
by persuading the adjudicator that the employer's explanation is not 
credible. Aikens, 460 U.S. at 716.
    Section 4311(c)(2) provides the same evidentiary framework for 
adjudicating allegations of reprisal against any person (including 
individuals unaffiliated with the military) for engaging in activities 
to enforce a protected right; providing testimony or statements in a 
USERRA proceeding; assisting or participating in a USERRA 
investigation; or exercising a right provided by the statute. 38 U.S.C. 
4311(c)(2). Proposed section 1002.19 addresses the elements of a case 
of retaliation.

Subpart C--Eligibility for Reemployment

General Eligibility Requirements for Reemployment
    USERRA requires that the service member meet five general criteria 
in order to establish eligibility for reemployment:
    (1) That the service member be absent from a position of civilian 
employment by reason of service in the uniformed services;
    (2) That the service member's employer be given advance notice of 
the service;
    (3) That the service member have five years or less of cumulative 
service in the uniformed services with respect to a position of 
employment with a particular employer;
    (4) That the service member return to work or apply for 
reemployment in a timely manner after conclusion of service; and,
    (5) That the service member not have been separated from service 
with a disqualifying discharge or under other than honorable 
conditions.

Proposed section 1002.32 sets out these general eligibility 
requirements. Proposed sections 1002.34-.74 explain the ``absent from a 
position of civilian service'' requirement, sections 1002.85-.88 
explain the ``advance notice'' requirement, sections 1002.99-.104 
explain the ``five years or less of cumulative service'' requirement, 
sections 1002.115-.123 explain the ``return to work or apply for 
reemployment'' requirement, and sections 1002.134-.138 explain the ``no 
disqualifying discharge'' requirement.
    A person who meets these eligibility criteria, which are contained 
in 38 U.S.C. 4312(a)-(c) and 4304, is entitled to be reemployed in the 
position described in 38 U.S.C. 4313, unless the employer can establish 
one of the three affirmative defenses contained in 38 U.S.C. 4312(d).
    There has been some disagreement in the courts over the appropriate 
burden of proof in cases brought under 38 U.S.C. 4312, the provision in 
USERRA establishing the reemployment rights of persons who serve in the 
uniformed services. One court has interpreted that provision to be ``a 
subsection of Sec.  4311 [the anti-discrimination and anti-retaliation 
provision].'' Curby v. Archon, 216 F.3d 549, 556 (6th Cir. 2000). Other 
courts have interpreted section 4312 to establish a statutory 
protection distinct from section 4311, creating an entitlement to re-
employment for qualifying service members rather than a protection 
against discrimination. Wrigglesworth v. Brumbaugh, 121 F. Supp.2d 
1126, 1134 (W.D. Mich. 2000) (stating that requirements of section 4311 
do not apply to section 4312). Brumbaugh relies in part on legislative 
history and the Department's interpretation of USERRA. Id. at 1137. 
Another district court supports the Brumbaugh decision and 
characterizes the contrary view in Curby as dicta. Jordan v. Air 
Products and Chem., 225 F. Supp.2d 1206, 1209 (C.D. Ca. 2002).
    The Department agrees with the district court decisions in 
Brumbaugh and Jordan that sections 4311 and 4312 of USERRA are separate 
and distinct. Proposed section 1002.33 provides that a person seeking 
relief under section 4312 need not meet the additional burden of proof 
requirements for discrimination cases brought under section 4311. The 
Department disagrees with the decision in Curby v. Archon discussed 
above, insofar as it interprets USERRA to the contrary. The Department 
invites comments regarding the proper interpretation of the statute 
regarding the burden of proof for relief under section 4312.
Coverage of Employers and Positions
    Proposed sections 1002.34 through 1002.44 list the employers and 
employment positions that are covered by USERRA. Proposed section 
1002.33 provides that the Act's coverage extends to virtually all 
employers in the United States; the statute contains no threshold or 
minimum size to limit its reach. The remaining proposed provisions 
address various aspects of the employment relationship subject to the 
Act. Proposed section 1002.35 defines the term ``successor in 
interest.'' Proposed section 1002.37 addresses the situation in which 
more than one employer may be responsible for one employee. Proposed 
sections 1002.38 and 1002.42 discuss hiring halls, layoffs and recalls. 
Proposed section 1002.39 covers States and other political subdivisions 
of the United States as employers.
    Proposed section 1002.40 makes clear that USERRA makes it unlawful 
for any employer to deny employment to a prospective employee on the 
basis of his or her membership, application for membership, performance 
of service, application to perform service, or obligation for service 
in the uniformed services, or on the basis of his or her exercise of 
any right guaranteed under the Act. Temporary, part-time, probationary, 
and seasonal employment positions are also covered by USERRA. Proposed 
section 1002.41 addresses the limited exception for positions that are 
for a brief, non-recurrent period and for which the employee has no 
reasonable expectation of continued employment indefinitely or for a 
significant period. Proposed section 1002.42 explains that USERRA 
covers employees on strike, layoff, or leave of absence. Proposed 
section 1002.43 makes clear that persons occupying professional, 
executive and managerial positions also are entitled to USERRA rights 
and benefits. Proposed section 1002.44 addresses the distinction 
between an independent contractor and an employee under USERRA.
Coverage of Service in the Uniformed Service
    Proposed sections 1002.54 through 1002.62 explain the term 
``service in the

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uniformed services,'' list the various types of uniformed services, and 
clarify that both voluntary and involuntary duty are covered under 
USERRA. Proposed section 1002.54 provides that ``service in the 
uniformed services'' includes a period for which a person is absent 
from a position of employment for the purpose of an examination to 
determine his or her fitness to perform duty in the uniformed services. 
Proposed sections 1002.55 and 1002.56 provide that service under 
certain authorities for funeral honors duty or as a disaster-response 
appointee also constitute service in the uniformed services. Proposed 
section 1002.57 clarifies when service in the National Guard is covered 
by USERRA, and proposed section 1002.58 addresses service in the 
commissioned corps of the Public Health Service, a division of the 
Department of Health and Human Services. Proposed section 1002.59 
recognizes coverage for persons designated by the President in time of 
war or national emergency. Proposed sections 1002.60, 1002.61, and 
1002.62 address the coverage of a cadet or midshipman attending a 
service academy, and members of the Reserve Officers Training Corps, 
Commissioned Corps of the National Oceanic and Atmospheric 
Administration, Civil Air Patrol, and Coast Guard Auxiliary.
Absence From a Position of Employment Necessitated by Reason of Service 
in the Uniformed Services
    Proposed section 1002.73 addresses the issue of the employee's 
reason for leaving employment as it bears on his or her reemployment 
rights. Section 4312(a) of the Act states that ``any person whose 
absence from a position of employment is necessitated by reason of 
service in the uniformed services'' is entitled to the reemployment 
rights and benefits of USERRA, assuming the Act's eligibility 
requirements are met. Military service need not be the only reason the 
employee leaves, provided such service is at least one of the reasons. 
See H.R. Rep. No. 103-65, Part I, at 25 (1993).
    USERRA does not impose a limit on the amount of time that may 
elapse between the date the employee leaves his or her position and the 
date he or she actually enters the service. Proposed section 1002.74 
recognizes that no such limit is warranted. A person entering military 
service generally needs a period of time to organize his or her 
personal affairs, travel safely to the site where the service is to be 
performed, and arrive fit to perform service. The amount of time needed 
for these preparations will vary from case to case. Moreover, the 
actual commencement of the period of service may be delayed for reasons 
beyond the employee's control. If an unusual delay occurs between the 
time the person leaves civilian employment and the commencement of the 
uniformed service, the circumstances causing the delay may be relevant 
to establish that the person's absence from civilian employment was 
``necessitated by reason of service in the uniformed services.'' See 
Lapine v. Town of Wellesley, 304 F.3d 90 (1st Cir. 2002).
Requirement of Advance Notice
    Proposed section 1002.85 explains one of the basic obligations 
imposed on the service member by USERRA as a prerequisite to 
reemployment rights: the requirement to notify the employer in advance 
about impending military service. 38 U.S.C. 4312(a)(1). Section 
4312(a)(1) of USERRA contains three general components of adequate 
notice: (i) The sender of the notice; (ii) the type of notice; and 
(iii) the timing of notice. First, the employee must notify his or her 
employer that the employee will be absent from the employment position 
due to service in the uniformed services. An ``appropriate officer'' 
from the employee's service branch, rather than the employee, may also 
provide the notice to the employer. Second, the notice may be either 
verbal or in writing. See 38 U.S.C. 4303(8) (defining ``notice'' to 
include both written and verbal notification). Although written notice 
by the employee provides evidence that can help establish the fact that 
notice was given, the sufficiency of verbal notice recognizes the 
``informality and current practice of many employment 
relationships[.]'' S. Rep. No. 103-158, at 47 (1993). The act of 
notification is therefore more important than its particular form. 
Third, the notice should be given in advance of the employee's 
departure. USERRA does not establish any bright-line rule for the 
timeliness of advance notice, i.e., a minimum amount of time before 
departure by which the employee must inform the employer of his or her 
forthcoming service. Instead, timeliness of notice must be determined 
by the facts in any particular case, although the employee should make 
every effort to give notice of impending military service as far in 
advance as is reasonable under the circumstances. See H.R. Rep. No. 
103-65, Pt. 1, at 26 (1993).
    Proposed section 1002.86 implements the statutory exceptions to the 
requirement of advance notice of entry into the uniformed services. The 
statute recognizes that in rare cases it may be very difficult or 
impossible for an employee to give advance notice to his or her 
employer. To accommodate these cases, the advance notice requirement 
may be excused by reason of ``military necessity'' or circumstances 
that make notice to the employer ``otherwise impossible or 
unreasonable.'' 38 U.S.C. 4312(b). Section 4312(b) also provides that 
the uniformed services make the determination whether military 
necessity excuses an individual from notifying his or her employer 
about forthcoming military service. Any such determination is to be 
made according to regulations issued by the Secretary of Defense. See 
32 CFR part 104. Finally, section 4312(b) states that the ``military 
necessity'' determination is not subject to judicial review. The same 
finality and exemption from review, however, do not apply if the 
employee fails to provide notice to his or her employer because the 
particular circumstances allegedly make notification ``impossible or 
unreasonable.'' Whether the circumstances of the case support the 
employee's failure to provide advance notice of service are questions 
to be decided by the appropriate fact-finder. See S. Rep. No. 103-158, 
at 47 (1993).
    Proposed section 1002.87 makes explicit that the employee is not 
required to obtain the employer's permission before departing for 
uniformed service in order to protect his or her reemployment rights. 
Imposing a prior consent requirement would improperly grant the 
employer veto authority over the employee's ability to perform service 
in the uniformed services by forcing the employee to choose between 
service and potential loss of his or her employment position, if 
consent were withheld.
    Proposed section 1002.88 implements the long-standing legal 
principle that an employee departing for service is not required to 
decide at that time whether he or she intends to return to the pre-
service employer upon completion of the tour of duty. Rather, the 
employee may defer the decision until after he or she concludes the 
period of service, and the employer may not press the employee for any 
assurances about his or her plans. See H.R. Rep. No. 103-65, Part I, at 
26 (1993) (``One of the basic purposes of the reemployment statute is 
to maintain the service member's civilian job as an `unburned' 
bridge.'') and S. Rep. No. 103-158, at 47 (1993), both of which cite 
Fishgold v. Sullivan Drydock and Repair Corp., 328 U.S. 275, 284 
(1946).
Period of Service
    USERRA provides that an individual may serve up to five years in 
the uniformed services, in a single period of service or in cumulative 
periods totaling

[[Page 56270]]

five years, and retain the right to reemployment by his or her pre-
service employer. 38 U.S.C. 4312(c). Proposed sections 1002.99 through 
1002.104 implement this statutory provision. Section 1002.99 implements 
the basic five-year period established by the statute. Proposed section 
1002.100 provides that the five-year period includes only actual 
uniformed service time. Periods of time preceding or following actual 
service are not included even if those periods may involve absences 
from the employment position for reasons that are service-related, for 
example, travel time to and from the duty station, time to prepare 
personal affairs before entering the service, delays in activation, 
etc. Proposed section 1002.101 clarifies that the five-year period 
pertains only to the cumulative period of uniformed service by the 
employee with respect to one particular employer, and does not include 
periods of service during which the individual was employed by a 
different employer. Therefore, the employee is entitled to be absent 
from a particular position of employment because of service in the 
uniformed services for up to five years and still retain reemployment 
rights with respect to that employer; this period starts anew with each 
new employer. The regulation derives from section 4312(c)'s language 
tying the five-year period ``to the employer relationship for which a 
person seeks reemployment[.]'' 38 U.S.C. 4312(c). Note, however, that 
under these proposed regulations a hiring hall out of which an 
individual may work for several different employers is considered to be 
a single employer. See proposed section 1002.38.
    Proposed section 1002.102 addresses periods of service undertaken 
prior to the enactment of USERRA, when the Veterans' Reemployment 
Rights Act (VRRA) was in effect. If an individual's service time 
counted towards the VRRA's four or five-year periods for reemployment 
rights, then that service also counts towards USERRA's five-year 
period. The regulation implements section (a)(3) of the rules governing 
the transition from the VRRA to USERRA, which appear in a note 
following 38 U.S.C. 4301. The Department invites comments as to whether 
this interpretation best effectuates the purpose of the Act. See 
proposed section 1002.102.
    Section 4312(c) enumerates eight specific exceptions to the five-
year limit on uniformed service that allow an individual to serve 
longer than five years while working for a single employer and retain 
reemployment rights under USERRA. 38 U.S.C. 4312(c)(1)-(4)(A)-(E). The 
exceptions involve unusual service requirements, circumstances beyond 
the individual's control, or service (voluntary or involuntary) under 
orders issued pursuant to specific statutory authority or the authority 
of the President, Congress or a Service Secretary. Proposed section 
1002.103 implements this provision by describing each exception set out 
in the statute.
    The regulation also recognizes a ninth exception based on equitable 
considerations. A service member is expected to mitigate economic 
damages suffered as a consequence of an employer's violation of the 
Act. See Graham v. Hall-McMillen Co., Inc., 925 F. Supp. 437, 446 (N.D. 
Miss. 1996). If an individual remains in (or returns to) the service in 
order to mitigate economic losses caused by an employer's unlawful 
refusal to reemploy that person, the additional service is not counted 
against the five-year limit. The Secretary seeks comments on whether an 
exception to the five-year limit based on the service member's 
mitigation of economic loss furthers the purposes of the statute.
    Proposed section 1002.104 implements section 4312(h), which 
prohibits the denial of reemployment rights based on the ``timing, 
frequency, and duration'' of the individual's training or service, as 
well as the nature of that service or training. 38 U.S.C. 4312(h). A 
service member's reemployment rights must be recognized as long as the 
individual has complied with the eligibility requirements specified in 
the Act. Id. The legislative history of section 4312(h) makes clear the 
Congress' intent to codify the holding of the United States Supreme 
Court in King v. St. Vincent's Hospital, 502 U.S. 215 (1991). See H.R. 
Rep. No. 103-65, Part I, at 30 (1993); S. Rep. No. 103-158, at 52 
(1993). In King, the court held that no service limit based on a 
standard of reasonableness could be implied from the predecessor 
version of USERRA. Section 4312(h). Proposed section 1002.104 therefore 
prohibits applying a ``reasonableness'' standard in determining whether 
the timing, frequency, or duration of the employee's service should 
prejudice his or her reemployment rights. Consistent with views 
expressed in the House report, however, proposed section 1002.104 
counsels an employer to contact the appropriate military authority to 
discuss its concerns over the timing, frequency, and duration of an 
employee's military service.
Application for Reemployment
    In order to protect reemployment rights under USERRA, the returning 
service member must make a timely return to, or application for 
reinstatement in, his or her employment position after completing the 
tour of duty. 38 U.S.C. 4312(a)(3). Sections 4312(e) and (f) establish 
the required steps of the reinstatement process. 38 U.S.C. 4312(e), 
(f). Section 4312(e) establishes varying time periods for requesting 
reinstatement based on the length of the individual's military service. 
This provision also addresses the time periods for reporting to the 
employer or applying for reemployment by a person who is hospitalized 
for, or convalescing from, an injury or illness incurred in, or 
aggravated during, the performance of service. Section 4312(f) 
describes the documentary evidence that the service member must submit 
to the employer in order to establish that the service member meets the 
statutory requirements for reinstatement. The proposed regulations 
implement these documentation requirements at 1002.121 to .123.
    Proposed section 1002.115 explains the three statutory time periods 
for making a request for reinstatement, depending on the length of the 
period of military service, except in the case of an employee's absence 
for an examination to determine fitness to perform service. The 
proposed regulation also specifies the actions that must be taken by 
the employee. Section 4312(e)(1)(A)(i) of USERRA provides that the 
employee reporting back to the employer following a period of service 
of less than 31 days must report:

    (i) Not later than the beginning of the first full regularly 
scheduled work period on the first full calendar day following the 
completion of the period of service and the expiration of eight 
hours after a period allowing for the safe transportation of the 
person from the place of that service to the person's residence * * 
*

    38 U.S.C. 4312(e)(1)(A)(i). The Department interprets this 
provision as requiring the employee to report at the beginning of the 
first full shift on the first full day following the completion of 
service, provided the employee has a period of eight hours to rest 
following safe transportation to the person's residence. See H.R. Rep. 
No. 103-65 at 29 (1993). The Department also understands the term 
``next'' in the clause ``next first full calendar day'' in section 
4312(e)(1)(C) to be superfluous. The Department invites comments as to 
whether these interpretations best effectuate the purpose of this 
provision. See proposed section 1002.115.

[[Page 56271]]

    If it is impossible or unreasonable for the employee to report 
within the above time period, he or she must report to the employer as 
soon as possible after the expiration of the eight-hour period.
    If the individual served between 31 and 180 days, he or she must 
make an oral or written request for reemployment no more than 14 days 
after completing service. If it is impossible or unreasonable for the 
employee to apply within 14 days through no fault of the employee, he 
or she must submit the application not later than the next full 
calendar day after it becomes possible to do so. Finally, if the 
individual served more than 180 days, he or she must make an oral or 
written request for reemployment no more than 90 days after completing 
service.
    Proposed section 1002.116 addresses the situation where a service 
member is unable to meet the foregoing timeframes due to the 
individual's hospitalization for or convalescence from a service-
related illness or injury. Such a person must comply with the 
notification procedures determined by the length of service, after the 
time period required for the person's recovery. The recovery period may 
not exceed two years unless circumstances beyond the individual's 
control make notification within the required two-year period 
impossible or unreasonable.
    Proposed section 1002.117 covers the situation where the employee 
fails to report or to submit a timely application for reemployment. 
Such failure does not automatically divest the individual of his or her 
statutory reemployment rights. See 38 U.S.C. 4312(e)(3). The employer 
may subject the employee to the workplace rules, policies and practices 
that ordinarily apply to an employee's unexcused absence from work.
    Proposed sections 1002.118 through 1002.123 establish procedures 
for notifying the employer that the service member intends to return to 
work. These sections also address the requirement that the returning 
service member provide documentation to the employer in certain 
instances. The documentation provides evidence that the service member 
meets three of the basic requirements for reemployment: timely 
application for reinstatement, permissible duration of service, and 
appropriate type of service discharge. USERRA expressly provides that 
the Secretary may prescribe, by regulation, the documentation necessary 
to demonstrate that a service member applying for employment or 
reemployment meets these requirements. Proposed section 1002.120 makes 
clear that the service member does not forfeit reemployment rights with 
one employer by working for another employer after completing his or 
her military service, as long as the service member complies with 
USERRA's reinstatement procedures.
Character of Service
    USERRA makes entitlement to reemployment benefits dependent on the 
characterization of an individual's separation from the uniformed 
service, or ``character of service.'' 38 U.S.C. 4304. The general 
requirement is that the individual's service separation be under other 
than dishonorable conditions. Proposed section 1002.135 lists four 
grounds for terminating the individual's reemployment rights based on 
character of service: (i) Dishonorable or bad conduct discharge; (ii) 
``other than honorable'' discharge as characterized by the regulations 
of the appropriate service Secretary; (iii) dismissal of a commissioned 
officer by general court-martial or Presidential order during a war (10 
U.S.C. 1161(a)); and, (iv) removal of a commissioned officer from the 
rolls because of unauthorized absence from duty or imprisonment by a 
civil authority (10 U.S.C. 1161(b)). 38 U.S.C. 4304(1)-(4). The 
uniformed services determine the individual's character of service, 
which is referenced on Defense Department Form 214. For USERRA 
purposes, Reservists who do not receive character of service 
certificates are considered honorably separated; many short-term tours 
of duty do not result in an official separation or the issuance of a 
Form 214.
    Proposed sections 1002.137 and 1002.138 address the consequences of 
a subsequent upgrading of an individual's disqualifying discharge. 
Upgrades may be either retroactive or prospective in effect. An upgrade 
with retroactive effect may reinstate the individual's reemployment 
rights provided he or she otherwise meets the Act's eligibility 
criteria, including having made timely application for reinstatement. 
However, a retroactive upgrade does not restore entitlement to the back 
pay and benefits attributable to the time period between the 
individual's discharge and the upgrade.
Employer Statutory Defenses
    USERRA provides three statutory defenses with which an employer may 
defend against a claim for USERRA benefits. The employer bears the 
burden of proving any of these defenses. 38 U.S.C. 4312(d)(2)(A)-(C).
    An employer is not required to reemploy a returning service member 
if the employer's circumstances have so changed as to make such 
reemployment impossible or unreasonable. 38 U.S.C. 4312(d)(1)(A). In 
view of USERRA's remedial purposes, this exception must be narrowly 
construed. The employer bears the burden of proving that changed 
circumstances make it impossible or unreasonable to reemploy the 
returning veteran. 38 U.S.C. 4312(d)(2)(A); proposed section 1002.139. 
The change must be in the pre-service employer's circumstances, as 
distinguished from the circumstances of its employees. For example, the 
defense of changed circumstances is available where reemployment would 
require the creation of a ``useless job or mandate reinstatement where 
there has been a reduction in the workforce that reasonably would have 
included the veteran.'' H.R. Rep. No. 103-65, at 25 (1993), citing 
Watkins Motor Lines v. De Galliford, 167 F.2d 274, 275 (5th Cir. 1948); 
Davis v. Halifax County School System, 508 F. Supp. 966, 969 (E.D. N.C. 
1981). However, an employer cannot establish that it is unreasonable or 
impossible to reinstate the returning service member solely by showing 
that no opening exists at the time of the reemployment application or 
that another person was hired to fill the position vacated by the 
veteran, even if reemploying the service member would require 
terminating the employment of the replacement employee. See Davis at 
968; see also Cole v. Swint, 961 F.2d 58, 60 (5th Cir. 1992); Fitz v. 
Bd. of Education of Port Huron Area Schools, 662 F. Supp. 1011, 1015 
(E.D. Mich. 1985), aff'd, 802 F.2d 457 (6th Cir. 1986); Anthony v. 
Basic American Foods, Inc., 600 F. Supp. 352, 357 (N.D. Cal. 1984); 
Goggin v. Lincoln St. Louis, 702 F.2d 698, 709 (8th Cir. 1983). Id.
    An employer is also not required to reemploy a returning service 
member if such reemployment would impose an undue hardship on the 
employer. 38 U.S.C. 4312(d)(1)(B). As explained in USERRA's legislative 
history, this defense only applies where a person is not qualified for 
a position due to disability or other bona fide reason, after 
reasonable efforts have been made by the employer to help the person 
become qualified. H.R. Rep. No. 103-65, at 25 (1993). USERRA defines 
``undue hardship'' as actions taken by the employer requiring 
significant difficulty or expense when considered in light of the 
factors set out in 38 U.S.C. 4303(15). USERRA defines ``reasonable 
efforts'' as ``actions, including training provided by an employer, 
that do not place an undue hardship on the employer.'' 38 U.S.C. 
4303(10). USERRA defines ``qualified''

[[Page 56272]]

in this context to mean having the ability to perform the essential 
tasks of the position. 38 U.S.C. 4303(9). These definitions are set 
forth in proposed sections 1002.5(m) (``undue hardship''), 1002.5(h) 
(``reasonable efforts''), and 1002.5(g) (``qualified'').
    The third statutory defense against reemployment requires the 
employer to establish that ``the employment from which the person 
leaves to serve in the uniformed services is for a brief, nonrecurrent 
period and there is no reasonable expectation that such employment will 
continue indefinitely or for a significant period.'' 38 U.S.C. 
4312(d)(1)(C), (2)(C). USERRA does not define ``significant period.'' 
Under both USERRA and its predecessor, the VRRA, a person holding a 
seasonal job may have reemployment rights if there was a reasonable 
expectation that the job would be available at the next season. See, 
e.g., Stevens v. Tennessee Valley Authority, 687 F.2d 158, 161-62 (6th 
Cir. 1982), and cases cited therein; S. Rep. No. 103-158, at 46-47.

Subpart D--Rights, Benefits, and Obligations of Persons Absent From 
Employment Due to Service in the Uniformed Services

Furlough or Leave of Absence
    Proposed section 1002.149 implements section 4316(b) of the Act, 
which establishes the employee's general non-seniority based rights and 
benefits while he or she is absent from the employment position due to 
military service. 38 U.S.C. 4316(b). The employer is required to treat 
the employee as if he or she is on furlough or leave of absence. 38 
U.S.C. 4316(b)(1)(A). The employee is entitled to non-seniority 
employment rights and benefits that are available to any other employee 
``having similar seniority, status, and pay who [is] on furlough or 
leave of absence. * * *'' 38 U.S.C. 4316(b)(1)(B). These non-seniority 
rights and benefits may be provided ``under a contract, agreement, 
policy, practice, or plan in effect at the commencement of such service 
or established while such person performs such service.'' Id. For 
example, if the employer offers continued life insurance coverage, 
holiday pay, bonuses, or other non-seniority benefits to its employees 
on furlough or leave of absence, the employer must also offer the 
service member similar benefits during the time he or she is absent 
from work due to military service. If the employer has more than one 
kind of non-military leave and varies the level and type of benefits 
provided according to the type of leave used, the comparison should be 
made with the employer's most generous form of comparable leave. See 
Waltermyer v. Aluminum Company of America, 804 F.2d 821 (3d Cir. 1986); 
H.R. Rep. No. 103-65, Part I, at 33-34 (1993); Schmauch v. Honda of 
America Manufacturing, Inc., 295 F. Supp. 2d 823 at 836-839 (S.D. Ohio 
2003) (employer improperly treated jury duty more favorably than 
military leave). The returning employee is entitled not only to the 
non-seniority rights and benefits of workplace agreements, policies, 
and practices in effect at the time he or she began the period of 
military service, but also to those that came into effect during the 
period of service. The Department invites comments as to whether this 
interpretation best effectuates the purpose of section 4316(b). 
Reference should be made to 38 U.S.C. 4316(a) and proposed sections 
1002.210 through 1002.214 for the provisions addressing seniority-based 
rights and benefits.
    The Department also interprets section 4316(b) of the Act to mean 
that an employee who is absent from a position of employment by reason 
of service is not entitled to greater benefits than would be generally 
provided to a similarly situated employee on non-military furlough or 
leave of absence. See Sen. Rep. No. 103-158 (1993) at 58. The 
Department also does not interpret the second use of the term 
``seniority'' in section 4316(b)(1)(B) as a limiting factor in 
determining what non-seniority rights must be provided to the service 
member during the absence from the employment position. The Department 
invites comments as to whether this interpretation best effectuates the 
purpose of this provision. See proposed section 1002.149.
    Proposed section 1002.152 addresses the circumstances under which 
an employee waives entitlement to non-seniority based rights and 
benefits. Section 4316(b)(2) of the Act provides that an employee who 
``knowingly'' states in writing that he or she will not return to the 
employment position after a tour of duty will lose certain rights and 
benefits that are not determined by seniority. 38 U.S.C. 4316(b)(2). 
The Department intends for principles of Federal common law pertaining 
to a waiver of interest to apply in determining whether such notice is 
effective in any given case. See Melton v. Melton, 324 F.3d 941, 945 
(7th Cir. 2003); Smith v. Amedisys, Inc., 298 F.3d 434, 443 (5th Cir. 
2002). By contrast, a notice given under 38 U.S.C. 4316(b)(2) does not 
waive the employee's reemployment rights or seniority-based rights and 
benefits upon reemployment. The Department invites comments as to 
whether this interpretation best effectuates the purpose of this 
provision.
    Proposed section 1002.153 clarifies that an employer may not 
require the employee to use his or her accrued leave to cover any part 
of the period during which the employee is absent due to military 
service. 38 U.S.C. 4316(d). The employee must be permitted upon request 
to use any accrued vacation, annual or similar leave with pay during 
the period of service. The employer may require the employee to request 
permission to use such accrued leave. However, sick leave is not 
comparable to vacation, annual or similar types of leave; entitlement 
to sick leave is conditioned on the employee (or a family member) 
suffering an illness or receiving medical care. An employee is 
therefore not entitled to use accrued sick leave solely to continue his 
or her civilian pay during a period of service.
Health Plan Coverage
    Section 4317 of the Act provides that service members who leave 
work to perform military service have the right to elect to continue 
their existing employer-based health plan coverage for a period of time 
while in the military. Section 4317 also requires that the employee and 
eligible dependents must, upon reemployment of the service member, be 
reinstated in the employer's health plan without a waiting period or 
exclusion that would not have been imposed had coverage not been 
suspended or terminated due to service in the uniformed services. The 
employee need not elect to continue health plan coverage during a 
period of uniformed service in order to be entitled to reinstatement in 
the plan upon reemployment. Section 4317 of USERRA is the exclusive 
source in USERRA of service members' rights with respect to the health 
plan coverage they receive in connection with their employment. Section 
4317 therefore controls the entitlement of a person to coverage under a 
health plan, and supersedes more general provisions of the Act dealing 
with rights and benefits of service members who are absent from 
employment. See 38 U.S.C. 4316(b)(5).
    Under USERRA, the term ``employer'' is defined broadly to cover 
entities, such as insurance companies or third party plan 
administrators, to which employer responsibilities such as 
administering employee benefit plans or deciding benefit claims have 
been delegated. ``Health plan'' is defined to include an insurance 
policy or contract, medical or hospital service agreement, membership 
or subscription contract, or other arrangement under which health

[[Page 56273]]

services for individuals are provided, or the expenses of such services 
are paid. Proposed Section 1002.5(d); 38 U.S.C. 4303(7). However, 
because USERRA's continuation coverage provisions only apply to health 
coverage that is provided in connection with a position of employment, 
coverage obtained by an individual through a professional association, 
club or other organization would not be governed by USERRA, nor would 
health coverage obtained under another family member's policy or 
separately obtained by an individual.
    USERRA's health plan provisions are similar but not identical to 
the continuation of health coverage provisions added to Federal law by 
the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). As 
with COBRA, the Act permits the continuation of employment-based 
coverage. Unlike COBRA, USERRA's continuation coverage is available 
without regard to either the size of the employer's workforce or to 
whether the employer is a government entity.
    Proposed section 1002.164 addresses the length of time the service 
member is entitled to continuing health plan coverage. Section 
4317(a)(1) provides that the maximum period of continued coverage is 
either 18 months or the period of military service (beginning on the 
date the absence begins and ending on the day after the service member 
fails to apply for reemployment), whichever occurs first.
    Under section 4317(a)(2), implemented by proposed section 1002.166, 
a service member who elects to continue employer-provided health plan 
coverage may be required to pay no more than 102 percent of the full 
premium (the employee's share plus the employer's share) for such 
coverage, except that service members who perform service for fewer 
than 31 days may not be required to pay more than the employee share, 
if any, for such coverage. The amount of the full premium is determined 
in the same manner as for COBRA under section 4980B(f)(4) of the 
Internal Revenue Code of 1986. 26 U.S.C. 4980B(f)(4). The legislative 
history of USERRA indicates that the purpose of these provisions, and 
in particular the requirement that service members pay only the 
employee share for coverage during service lasting fewer than 31 days, 
is to ensure that there is no gap in health insurance coverage for the 
service member's family during a short period of service. Dependents of 
Reserve Component members are entitled to participate in the military 
health care system, called TRICARE, only if the period of service 
exceeds 30 days. See H.R. Rep. No. 103-65, Pt. 1, at 34 (1993).
    USERRA does not require that any particular type of health plan 
coverage be provided. The statute requires only that the employer, and 
hence the plan, permit the service member to continue the coverage that 
he or she already has obtained through the employment relationship, 
including family and dependent coverage. USERRA does not provide 
specific guidance regarding how or within what time period the 
continuing coverage is to be elected. Proposed section 1002.165 
provides that plan administrators and fiduciaries may develop 
reasonable requirements and operating procedures for the election of 
continuing coverage, consistent with the Act and the terms of the plan. 
Such procedures must take into consideration the requirement in USERRA 
section 4312(b) that where military necessity prevents the service 
member from giving the employer notice that he or she is leaving for 
military duty, or where giving such notice would be impossible or 
unreasonable, plan requirements may not be imposed to deny the service 
member continuation coverage.
    The Department invites comments as to whether this approach--
allowing health plan administrators latitude to develop reasonable 
requirements for employees to elect continuation coverage--best 
effectuates the purpose of the statute. Alternatively, the Department 
requests comments on the question whether these USERRA regulations 
should establish a date certain by which time continuing health plan 
coverage must be elected. Moreover, should a service member be 
permitted to delay electing continuation health plan coverage under 
some circumstances? Finally, in a case where health plan coverage was 
terminated or suspended by reason of military service, if the employee 
is permitted to delay reinstatement to the health plan for a period of 
time after the date of reemployment, the Department invites comments as 
to whether such delayed reinstatement coverage should be subject to an 
exclusion or waiting period. See 38 U.S.C. 4317(b)(1).
    As with every other right and benefit guaranteed by USERRA, the 
employer is free to provide continuation health plan coverage that 
exceeds that which is required by the Act. For example, some employers 
do not require the service member to pay more than the ordinary 
employee premium for continuation health coverage during an extended 
period of service in the uniformed services.
    Proposed sections 1002.167-1002.168 explain the rights of a 
reemployed service member whose health plan coverage has been 
terminated as a result of his or her failure to elect continuation 
coverage, or length of service. At the time of reemployment, no 
exclusion or waiting period may be imposed where one would not have 
been imposed if the coverage of the service member had not terminated 
as a result of service in the uniformed services. This provision also 
applies to the coverage of any other person who is covered under the 
service member's policy, such as a dependent. Injuries or illnesses 
determined by the Secretary of Veterans' Affairs to have been incurred 
or aggravated during service are excluded from the ban on exclusions 
and waiting periods; however, the service member and any dependents 
must be reinstated as to all other medical conditions covered by the 
plan.
    USERRA provides for the continuation of health coverage available 
to the service member in connection with his or her employment, so, 
generally, if the employer cancels health coverage for its employees 
while the service member is performing service, or if the employer goes 
out of business, the service member's coverage terminates also. Under 
USERRA, the treatment of multiemployer health plans provides an 
exception to this result. Special rules for multiemployer plans are the 
focus of proposed section 1002.169. This provision requires continued 
health plan coverage in a multiemployer plan even when the service 
member's employer no longer exists, or no longer participates in the 
plan. Any liability under the multiemployer plan for employer 
contributions and benefits under USERRA is to be allocated as the 
sponsor maintaining the plan provides. If the sponsor does not provide 
for an allocation of responsibility under these circumstances, the 
liability is allocated to the last employer employing the person before 
the period of uniformed service. Where that employer is no longer 
functional, the liability is allocated to the plan.

Subpart E--Reemployment Rights and Benefits

Prompt Reemployment
    One of the stated purposes of USERRA is ``to minimize the 
disruption to the lives of persons performing service in the uniformed 
services * * * by providing for [their] prompt reemployment.'' 38 
U.S.C. 4301(2). Section 4313 requires that a returning service member 
who meets the

[[Page 56274]]

eligibility requirements of section 4312 be ``promptly reemployed'' in 
the appropriate position. 38 U.S.C. 4313(a). The circumstances of each 
individual case will determine the meaning of ``prompt.'' See H.R. Rep. 
No. 103-65, Part I, at 32 (1993); S. Rep. No. 103-158, at 54 (1993). 
Proposed section 1002.181 provides guidance for the ``prompt'' 
reinstatement of returning service members. The regulation states, as a 
general rule, that the employer shall reinstate the employee as soon as 
practicable under the circumstances. Reinstatement must occur within 
two weeks after he or she applies for reemployment ``absent unusual 
circumstances.'' The reasonableness of any delay depends on a variety 
of factors, including, for example, the length of the service member's 
absence or intervening changes in the circumstances of the employer's 
business. An employer does not have the right to delay or deny 
reemployment because the employer filled the service member's pre-
service position and no comparable position is vacant, or because a 
hiring freeze is in effect. The Department invites comments as to 
whether allowing the employer two weeks to reemploy the service member 
returning from a period of service of more than thirty days best 
effectuates the purpose of this provision of USERRA. [Note: If the 
period of service is less than 31 days then the statute requires that 
the returning employee simply report back to work; these regulations 
anticipate that such a person will be immediately reemployed.]
Reemployment Position
    In construing an early precursor statute to USERRA, the Selective 
Training and Service Act of 1940, 50 U.S.C. Appendix, 308(b, c), the 
Supreme Court recognized a basic principle embedded in early 
protections provided for veterans, which was to become a bedrock 
concept of all future similar legislation. Thus, in Fishgold v. 
Sullivan Drydock and Repair Corp., 328 U.S. 275, 284-85 (1946), the 
Supreme Court stated that the returning service member ``does not step 
back on the seniority escalator at the point he stepped off. He steps 
back on at the precise point he would have occupied had he kept his 
position continuously during the war.'' Id. Fishgold principally 
involved the issue of a veteran's seniority; however, the principle 
applies with equal force to all aspects of the service member's return 
to the work force. The returning service member therefore should be 
restored to ``a position which, on the moving escalator of terms and 
conditions affecting that particular [pre-service] employment, would be 
comparable to the position which he would have held if he had remained 
continuously in his civilian employment.'' Oakley v. Louisville & 
Nashville R.R., 338 U.S. 278, 283 (1949). The position to which the 
returning service member should be restored has become known as the 
``escalator position.'' The requirement that the service member be 
reemployed in the escalator position is implemented in section 4313 of 
USERRA. 38 U.S.C. 4313.
    Proposed sections 1002.191 and 1002.192 implement general 
principles related to a returning veteran's right to reemployment in 
this escalator position. Proposed sections 1002.193 and 1002.195 
clarify that seniority, status, pay, length of service, and service-
related disability may affect the service member's reemployment 
position. Proposed sections 1002.196 and 1002.197 explain the 
employer's obligations to reemploy the service member based on the 
duration of the person's absence from the work place. Proposed section 
1002.198 describes the criteria to be followed by the employer in 
making reasonable efforts to enable the service member to qualify for 
the reemployment position. Finally, proposed section 1002.199 provides 
guidance for employers in determining the priority of two or more 
service members who are eligible for the same employment position.
    In some workplaces, where opportunities for promotion are 
conditioned upon the employee passing a skills test or examination, 
determining the escalator position will require administering a makeup 
promotional exam. If a reemployed service member was eligible to take 
such a promotional exam and missed it while performing military 
service, the employer should provide the employee with an opportunity 
to take the missed exam after a reasonable period of time to acclimate 
to the employment position. See, e.g., Fink v. City of New York, 129 
F.Supp.2d 511 (2001). In some cases, success on a promotional exam 
entitles an employee to an immediate promotion, and in some cases it 
entitles an employee only to a particular placement on an eligibility 
list. If the reemployed employee is successful on the makeup exam, and 
there is a reasonable certainty that, given the results of that exam, 
the reemployed employee would have been promoted during the time he or 
she was in military service, then the reemployed employee's promotion 
must be made effective as of the date it would have occurred had the 
employment not been interrupted by military service. Similarly, if the 
reemployed employee is successful on the makeup exam, and there is a 
reasonable certainty that, given the results of that exam, the 
reemployed employee would have been placed in a particular position on 
an eligibility list during the time he or she was in military service, 
then the reemployed employee's placement on the list must be made 
effective as of the date it would have occurred had the employment not 
been interrupted by military service. This requirement is similar to 
the requirement in Section 1002.236, that obliges an employer to give a 
reemployed employee, after a reasonable amount of time to adjust to the 
reemployment position, a missed skills test or examination that is the 
basis of a merit pay increase. Proposed section 1002.193 implements 
these requirements. The Department invites comments as to whether this 
interpretation best effectuates the purpose of this provision, or 
whether the issue of promotional exams requires more detailed treatment 
in these regulations.
    The Department understands the statutory term ``qualify'' in 38 
U.S.C. 4313 to include the employer's affirmative obligation to make 
reasonable efforts to assist the returning employee in acquiring the 
ability to perform the essential tasks of the reemployment position. 
This understanding is reflected in the language used in the 
regulations. The Department requests comments on whether this 
interpretation is proper.
    The statute makes the duration of a returning employee's period of 
service a critical factor in determining the reemployment position to 
which the employee is entitled upon return from service. After service 
of 90 days or less, the person is entitled to reinstatement in the 
position of employment in which he or she would have been employed if 
not for the interruption in employment due to uniformed service (the 
escalator position). 38 U.S.C. 4313(a)(1)(A). The employer must make 
reasonable efforts to assist the individual in becoming qualified for 
the reemployment position. In the event the returning employee cannot 
become qualified for the escalator position despite reasonable efforts 
by the employer, the returning employee is entitled to the employment 
position in which he or she was employed on the date that the period of 
service commenced. 38 U.S.C. 4313(a)(1)(B). These requirements are 
implemented in proposed section 1002.196.
    The service member returning from a period of service longer than 
90 days is

[[Page 56275]]

similarly entitled to reemployment in the escalator position, but, at 
the employer's option, may also be reinstated in any position for which 
the employee is qualified with the same seniority, status, and pay as 
the escalator position. 38 U.S.C. 4313(a)(2)(A). This statutory option 
is intended to provide the employer with a degree of flexibility in 
meeting its reemployment obligations. As with an employee returning 
from a shorter period of service, the employer must first make 
reasonable efforts to qualify the individual for the escalator position 
or for the position of like seniority, status, and pay. In the event 
the returning employee cannot become qualified for one of these 
positions despite reasonable employer efforts, the person is entitled 
to the employment position in which he or she was employed on the date 
that the period of service commenced, or a position of like seniority, 
status, and pay. 38 U.S.C. 4313(a)(2)(B). These requirements are 
implemented in proposed section 1002.197.
    In some instances, the service member may not be able to qualify 
for either the escalator position or the pre-service position (or a 
position similar in seniority, status, and pay to either of these 
positions) despite reasonable employer efforts. In such an event, the 
employee is entitled to be reemployed in any other position that is the 
nearest approximation to the escalator position. If there is no such 
position for which the returning service member is qualified, he or she 
is entitled to reemployment in any other position that is the nearest 
approximation to the preservice position. In either event, the 
returning service member must be reemployed with full seniority. 38 
U.S.C. 4313(a)(4). This requirement is implemented by proposed sections 
1002.196(c) and .197(c).
    Depending on the circumstances, section 4313 either permits or 
requires the employer to reemploy a returning service member in a 
position with equivalent (or the nearest approximation to 
``equivalent'') seniority, status and pay to the escalator or pre-
service position. 38 U.S.C. 4313(a)(2)(A), (B), (3)(A), (B). Although 
``seniority'' and ``pay'' are generally well-understood terms, USERRA 
does not define ``status'' as it is used in section 4313 of the Act. 
Case law interpreting VRRA, a precursor to USERRA, recognized status as 
encompassing a broader array of rights than either seniority or pay. 
Job status varies from position to position, but generally refers to 
the incidents or attributes attached to, and inherent in, a particular 
job. The term often includes the rank or responsibility of the 
position, its duties, location, working conditions, and the pay and 
seniority rights attached to the position. See H.R. Rep. No. 103-65, 
Part I, at p. 31 (1993). Examples of status may be the exclusive right 
to a sales territory; the opportunity to advance in a position; 
eligibility for possible election to a position with the employee 
representative organization; greater availability of work where piece 
rates apply; the opportunity to work additional hours and to advance in 
a job; the opportunity to withdraw from a union; the opportunity to 
obtain a license; or, the opportunity to work a particular shift. The 
facts and circumstances surrounding the position determine whether a 
specific attribute is part of the position's status for USERRA 
purposes. Proposed sections 1002.193 and .194 implement these 
provisions of the Act.
    Notwithstanding the escalator principle, USERRA does not require an 
employer to reinstate a returning service member in an employment 
position if he or she is not qualified to perform the civilian job. See 
proposed section 1002.198. USERRA defines ``qualified'' as ``having the 
ability to perform the essential tasks of the position.'' 38 U.S.C. 
4303(9). An individual's performance qualifications are a function of 
his or her ability to perform the ``essential tasks'' of the employment 
position. This regulation provides guidelines for determining whether a 
given task is essential for proper performance of the position. In 
general, whether a task is essential for a position will depend on its 
relationship to the actual performance requirements of the position 
rather than, for example, the criteria enumerated in a job description. 
An employer may not decline to rehire a returning service member simply 
because he or she is unable to do some auxiliary, but nonessential, 
parts of the job. The Department invites comments as to whether this 
interpretation best effectuates the purpose of this provision.
    Proposed section 1002.198 describes the employer's obligation to 
assist a returning service member for civilian reemployment in becoming 
qualified for a civilian position. USERRA requires the employer to make 
reasonable efforts to enable the returning service member to qualify 
for a position that he or she would be entitled to if qualified. 
Section 4303(10) defines ``reasonable efforts'' as ``actions, including 
training provided by an employer, that do not place an undue hardship 
on the employer.'' 38 U.S.C. 4303(10). Section 4303(15) defines ``undue 
hardship'' as ``actions [taken by an employer] requiring significant 
difficulty or expense, when considered in light of * * * the overall 
financial resources of the employer'' and several other stated factors. 
38 U.S.C. 4303(15). Depending upon an employer's size and resources, a 
given level of effort might be an undue hardship for one employer and 
yet reasonable for another. The employer has the burden of proving that 
the training, retraining, or other efforts to enable the returning 
employee to qualify would impose an undue hardship. The proposed 
regulation describes the criteria that apply in determining whether the 
steps for aiding the service member in becoming qualified impose an 
undue hardship on the employer.
    Proposed section 1002.199 implements section 4313(b), which governs 
the priority of reemploying two (or more) service members who are 
entitled to reemployment in the same position. 38 U.S.C. 4313(b). The 
individual who first vacated the employment position for military 
service has the highest priority for reemployment. 38 U.S.C. 
4313(b)(1). If this priority means another returning service member is 
denied reemployment in that position, the USERRA rules that give 
reemployment options to the employer would govern the reemployment of 
the second person. Thus, the second service member is entitled to ``any 
other position'' offering status and pay similar to the denied position 
according to the statutory rules generally applicable to returning 
service members. 38 U.S.C. 4313(b)(2)(A). A disabled service member in 
this situation would be entitled to any other position offering status 
and pay similar to the denied position according to the rules governing 
disabled service members. 38 U.S.C. 4313(b)(2)(B).
Seniority Rights and Benefits
    Section 4316(a) provides that a reemployed service member is 
entitled to ``the seniority and other rights and benefits determined by 
seniority'' that the service member had attained as of the date he or 
she entered the service, together with the additional seniority he or 
she would have attained if continuously employed during the period of 
service. 38 U.S.C. 4316(a). As with the principles governing the 
determination of the reemployment position, this provision reflects the 
escalator principle. As applied to seniority rights under section 
4316(a), the escalator principle entitles the returning service member 
to the ``same seniority and other rights and benefits determined by 
seniority that [the service member] would have attained if [his or

[[Page 56276]]

her] employment had not been interrupted by service in the uniformed 
services.'' S. Rep. No. 103-158, at 57 (1993); see also H.R. Rep. No. 
103-65, Part I, at 33 (1993). Proposed section 1002.210 states the 
basic escalator principle as it applies to seniority and seniority-
based rights and benefits. It bears emphasis here that the escalator 
principle is outcome-neutral in terms of the effect of restoring the 
service member's seniority. For example, the application of the 
principle does not offer protection against adverse job consequences 
that result from placing the service member in his or her proper 
position on the seniority escalator. Finally, this section explains 
that the rights and benefits protected by USERRA upon reemployment 
include those provided by employers and those required by statute, such 
as the right to leave under the Family and Medical Leave Act of 1993, 
29 U.S.C. 2601-2654 (FMLA). Accordingly, a reemployed service member 
would be eligible for FMLA leave if the number of months and the number 
of hours of work for which the service member was employed by the 
civilian employer, together with the number of months and number of 
hours of work for which the service member would have been employed by 
the civilian employer during the period of military service, meet 
FMLA's eligibility requirements. See Memorandum of July 22, 2002, 
Protection of Uniformed Service Member's Rights to Family and Medical 
Leave at http://www.dol.gov/vets/media/fmlarights.pdf.
    Proposed section 1002.211 makes clear that section 4316(a) is not a 
statutory mandate to impose seniority systems on employers. Rather, 
USERRA requires only that those employers who provide benefits based on 
seniority restore the returning service member to his or her proper 
place on the seniority ladder.
    Proposed section 1002.212 adopts the basic definition of seniority-
based rights and benefits developed in Supreme Court decisions. This 
definition imposes two requirements: first, the benefit must be 
provided as a reward for length of service rather than a form of short-
term compensation for services rendered; second, the service member's 
receipt of the benefit, but for his or her absence due to service, must 
have been reasonably certain. See Coffy v. Republic Steel Corp., 447 
U.S. 191 (1980); Alabama Power Co. v. Davis, 431 U.S. 581 (1977); see 
also S. Rep. No. 103-158, at 57 (1993), citing with approval Goggin v. 
Lincoln, St. Louis, 702 F.2d 698, 701 (8th Cir. 1983) (summarizing 
Supreme Court formulation of two-part definition of ``perquisites of 
seniority''). Proposed section 1002.212(c) adds a third consideration 
which derives from another Supreme Court decision, McKinney v. 
Missouri-Kansas-Texas R.R. Co., 357 U.S. 265 (1958). In that case, the 
Court allowed consideration of the employer's ``actual practice'' in 
making advancement an automatic benefit based on seniority under the 
collective bargaining agreement. Accordingly, proposed section 
1002.212(c) adds the requirement that ``actual custom or practice'' in 
conferring or withholding a benefit also determines whether the benefit 
is a perquisite of seniority.
    Proposed section 1002.213 further defines one aspect of seniority-
based rights and benefits: the requirement that receipt of the benefit 
be ``reasonably certain.'' The proposed regulation describes a 
``reasonably certain'' likelihood as a ``high probability'' that the 
returning service member would have obtained the seniority-based 
benefit if continuously employed. A ``high probability'' is less than 
an ``absolute certainty,'' which the Supreme Court has rejected in 
analyzing the degree of probability a reemployed service member must 
satisfy in order to establish that his or her advancement would have 
been ``reasonably certain'' but for the period of service. See Tilton 
v. Missouri Pacific Railroad Co., 376 U.S. 169, 180 (1964). The 
employer may not deny a reemployed service member seniority-based 
rights or benefits based on a scenario of unlikely events that 
allegedly would have occurred during the period of service.
    Proposed section 1002.214 emphasizes that the returning employee is 
also entitled to claim perquisites of seniority that first became 
available to co-workers or that were modified while he or she was in 
the service. That the employer did not offer the particular benefit 
until after the individual began the service is not a justification for 
denying the benefit to the returning service member. Similarly, if a 
benefit is modified or eliminated, the change would affect the 
returning service member. This requirement flows from the fact that the 
returning service member must be restored to the seniority rights and 
benefits that he or she would have attained with reasonable certainty 
if he or she had remained continuously employed during the period of 
service.
Disabled Employees
    USERRA imposes additional requirements in circumstances involving 
the reemployment of a disabled service member. A disabled service 
member is entitled, to the same extent as any other individual, to the 
escalator position he or she would have attained but for military 
service. If the disability is not an impediment to the service member's 
qualifications for the escalator position, then the disabling condition 
is irrelevant for USERRA purposes. If the disability limits the service 
member's ability to perform the job, however, the statute imposes a 
duty on the employer to make reasonable efforts to accommodate the 
disability. 38 U.S.C. 4313(a)(3). In some instances, an employer is 
unable to accommodate a service member's disability despite reasonable 
efforts. If, despite the employer's reasonable efforts to accommodate 
the disability, the returning disabled service member cannot become 
qualified for his or her escalator position, that person is entitled to 
be reemployed ``in any other position which is equivalent in seniority, 
status, and pay, the duties of which the person is qualified to perform 
or would become qualified to perform with reasonable efforts by the 
employer.'' 38 U.S.C. 4313(a)(3)(A). If no such position exists, the 
service member is entitled to reemployment ``in a position which is the 
nearest approximation * * * in terms of seniority, status, and pay 
consistent with circumstances of such person's case.'' 38 U.S.C. 
4313(a)(3)(B). See, e.g., Hembree v. Georgia Power Co., 637 F.2d 423 
(5th Cir. 1981); Blake v. City of Columbus, 605 F. Supp. 567 (S.D. Ohio 
1984).
    Proposed section 1002.225 sets forth the priority of reemployment 
positions for which the disabled service member should be considered. 
The regulation also implements the statutory requirement for reasonable 
accommodation of the returning service member's disability. Such 
accommodations may include placing the reemployed person in an 
alternate position, on ``light duty'' status; modifying technology or 
equipment used in the job position; revising work practices; or, 
shifting job functions. The appropriate level of accommodation depends 
on the nature of the service member's disability, the requirements for 
properly performing the job, and any other circumstances surrounding 
the particular situation. See 38 U.S.C. 4303(9), (10), and (15); 
4313(a)(3); H.R. Rep. No. 103-65, at 31 (1993); S. Rep. No. 103-158, at 
53 (1993).
    The employer must make reasonable accommodations for any disability 
incurred in, or aggravated during, a period of service. The 
accommodation requirement is not limited to disabilities

[[Page 56277]]

incurred during training or combat, so long as they are incurred during 
the period of service. Any disability that is incurred or aggravated 
outside of a period of service (including a disability incurred between 
the end of the period of service and the date of reemployment) is not 
covered as a service-related disability for USERRA purposes. The 
disability must have been incurred or aggravated when the service 
member applies for reemployment, even if it has not yet been detected. 
If the disability is discovered after the service member resumes work 
and it interferes with his or her job performance, then the 
reinstatement process should be restarted under USERRA's disability 
provisions.
    A returning service member may have rights under USERRA based on a 
service-related disability that is not permanent. A service member who 
incurs a temporary disability may be entitled to interim reemployment 
in an alternate position provided he or she is qualified for the 
position and the disability will not affect his or her ability to 
perform the job. If no such alternate position exists, the disabled 
service member would be entitled to reinstatement under a ``sick 
leave'' or ``light duty'' status until he or she completely recovers.
    In identifying an alternate position for a disabled service member, 
the focus should be on the returning service member's ability to 
perform the essential duties of the job. The position must be one that 
the person can safely perform without unreasonable risk to the person 
or fellow employees. The disabled service member is required to provide 
information on his or her education and experience, the extent of the 
disability, and his or her present capabilities. The employer then has 
the duty to disclose all positions that the service member may be 
qualified to perform. Because the employer has greater knowledge of the 
various positions and their requirements in the organization, the 
employer, and not the service member, is exclusively responsible for 
accommodating the disability by identifying suitable positions within 
the service member's abilities and capabilities. Proposed sections 
1002.225 and .226 implement USERRA's requirements regarding disabled 
employees.
Rate of Pay
    The escalator principle also determines the returning service 
member's rate of pay after an absence from the workplace due to 
military service. As with respect to benefits and the reemployment 
position, the application of this fundamental principle with respect to 
pay is intended to restore the returning service member to the 
employment position that he or she would have occupied but for the 
interruption in employment occasioned by military service. See 
generally Fishgold v. Sullivan Drydock and Repair Corp. Proposed 
section 1002.236 implements the escalator principle for purposes of 
determining the reemployed service member's rate of pay. The regulation 
also addresses the various elements of compensation that often compose 
the returning service member's ``rate of pay.'' Depending on the 
particular position, the rate of pay may include more than the basic 
salary. The regulation lists various types of compensation that may 
factor into determining the employee's overall compensation package 
under the escalator principle. The list is not exclusive; any 
compensation, in whatever form, that the employee would have received 
with reasonable certainty if he or she had remained continuously 
employed should be considered an element of compensation. The returning 
employee's rate of pay may therefore include pay increases, 
differentials, step increases, merit increases, periodic increases, or 
performance bonuses.
    In some workplaces, merit pay increases are conditioned upon the 
employee passing a skills or performance evaluation. The employer 
should allow a reasonable period of time for the employee to become 
acclimated in the escalator position before such an evaluation is 
administered. In order that the employee not be penalized financially 
for his or her military service, the employee must be reemployed at the 
higher rate of pay, assuming that it is reasonably certain that the 
employee would otherwise have attained the merit pay increase during 
the period of military service. This requirement is similar to the 
requirement in Section 1002.193, which obliges an employer to give a 
reemployed employee, after a reasonable amount of time to adjust to the 
reemployment position, a missed skills test or examination that is the 
basis of an opportunity for promotion. The Department invites comments 
as to whether this interpretation best effectuates the purpose of this 
provision, or whether the issue of merit pay requires more detailed 
treatment in these regulations.
    What is critical is not how the employer characterizes the 
compensation, but whether it would have been attained with reasonable 
certainty if not for the service in the uniformed services. In 
determining rate of pay, as in other situations, application of the 
escalator principle may leave the returning service member with less 
than he or she had before performing service. Thus, if 
nondiscriminatory adverse changes in the employment position's pay 
structure would with reasonable certainty have lowered the compensation 
rate during the period of service if he or she had remained 
continuously employed, the escalator principle may operate to diminish 
the returning service member's pay.
Protection Against Discharge
    Section 4316(c) of USERRA provides service members special 
protection from discharge from civilian employment after returning from 
uniformed service. If the individual served over 180 days before 
reemployment, then he or she may not be discharged from the employment 
position within one year after reemployment except for cause. 38 U.S.C. 
4316(c)(1). If the individual served between 31 and 180 days in the 
military, he or she may not be discharged from the employment position 
within 180 days after reemployment except for cause. 38 U.S.C. 
4316(c)(2). A reinstated service member whose duration of service 
lasted 30 days or less has no similar protection from discharge; 
however, the individual is protected by USERRA's anti-discrimination 
provisions, 38 U.S.C. 4311, as explained in proposed sections 
1002.18-.23. Proposed section 1002.247 elaborates the general rules for 
protection against discharge based on the duration of service prior to 
reemployment.
    Prohibiting a reemployed service member's discharge, except for 
cause, ensures that the service member has a reasonable amount of time 
to get accustomed to the employment position after a significant 
absence. A period of readjustment may be especially warranted if the 
service member has assumed a new employment position after the military 
service. The discharge protection also guards against an employer's bad 
faith or pro forma reinstatement followed by an unjustified termination 
of the reemployed service member. Moreover, the time period for special 
protection does not start until the service member has been fully 
reemployed and any benefits to which the employee is entitled have been 
restored. Even assuming the service member receives the benefit of the 
full protection period prior to dismissal, an employer nevertheless 
violates the Act if the reason for discharging the service member is 
impermissible under USERRA.

[[Page 56278]]

    Section 4316(c) does not provide complete protection from discharge 
to a reemployed service member for the duration of the protected 
period. An employer may dismiss a reemployed service member even during 
the protected period for just cause. Depending on the circumstances of 
the specific case, just cause may include unacceptable or 
unprofessional public behavior, incompetent or inefficient performance 
of duties, or criminal acts. An employer may also discharge the service 
member for cause if the application of the escalator principle results 
in a legitimate layoff or in the elimination of the job position 
itself, provided the person would have faced the same consequences had 
he or she remained continuously employed. Proposed section 1002.248 
provides general guidelines for establishing just cause to discharge a 
reemployed service member during the protection period, and places the 
burden of proof on the employer to demonstrate that it is reasonable to 
discharge the person. See H.R. Rep. No. 103-65, Pt. 1, at 35 (1993); S. 
Rep. No. 103-158, at 63 (1993).
Pension Plan Benefits
    USERRA establishes specific rights for reemployed service members 
in their employee pension benefit plans; the Act's specific provisions 
for pension benefit plans supersede general provisions elsewhere in the 
statute. 38 U.S.C. 4316(b)(6). The Act defines an employee pension 
benefit plan in the same way that the term is defined under the 
Employee Retirement Income Security Act of 1974 (ERISA). See 29 U.S.C. 
Chapter 18; 38 U.S.C. 4318(a). The term ``employee pension benefit 
plan'' includes any plan, fund or program established or maintained by 
an employer or by an employee organization, or by both, that provides 
retirement income or results in the deferral of income for a period of 
time extending to or beyond the termination of the employment covered 
by the plan. Profit sharing and stock bonus plans that meet this test 
are included. USERRA provides that once the service member is 
reemployed according to the statute, he or she is treated as not having 
a break in service with the employer or employers maintaining the plan 
even though the service member was away from work performing military 
service.
    Proposed sections 1002.259 to .267 describe the types of employee 
pension benefit plans that come within the Act and the pension benefits 
that must be provided to reemployed service members. Although USERRA 
relies on the ERISA definition of an employee pension benefit plan, 
some plans excluded from ERISA coverage may be subject to USERRA. For 
example, USERRA (but not ERISA) extends coverage to plans sponsored by 
religious organizations and plans established under State or Federal 
law for governmental employees. Benefits paid pursuant to federally 
legislated programs such as Social Security or the Railroad Retirement 
Act, however, are not covered by USERRA. USERRA coverage also does not 
include benefits under the Thrift Savings Plan (TSP); the rights of 
reemployed service members to benefits under the TSP are governed by 
another Federal statute. See 5 U.S.C. 8432b. 38 U.S.C. 4318(a)(1)(B).
    As proposed sections 1002.259 to .267 illustrate, each period of 
uniformed service is treated as an uninterrupted period of employment 
with the employer(s) maintaining the pension plan in determining 
eligibility for participation in the plan, the non-forfeitability of 
accrued benefits, and the accrual of service credits, contributions and 
elective deferrals (as defined in section 402(g)(3) of the Internal 
Revenue Code of 1986 (IRC)) under the plan. 38 U.S.C. 4318(a)(2)(B). As 
a result, for purposes of calculating these pension benefits, or for 
making contributions or deferrals to the plan, the reemployed service 
member is treated as though he or she had remained continuously 
employed for pension purposes.
    Proposed sections 1002.261 and 1002.262 clarify who must make the 
contribution and/or deferral attributable to a particular period of 
military service and the timeframes within which payments are to be 
made to the plan. The employer who reemploys the service member is 
responsible for funding any employer contribution to the plan to 
provide the benefits described in the Act and the regulation. 38 U.S.C. 
4318(b)(1). Some plans do not require or permit employer contributions. 
In that case, the plan is funded by employee contributions or elective 
deferrals. Other plans provide that the employer will match a certain 
portion of the employee contribution or deferral. If employer 
contributions are contingent on employee contributions or elective 
deferrals, such as where the employer matches all or a portion of the 
employee deferral or contribution, the reemployed service member is 
entitled to the employer contribution only to the extent that he or she 
makes the employee contributions or elective deferrals to the plan. 38 
U.S.C. 4318(b)(2). A reemployed service member has the right to make 
his or her contributions or elective deferrals, but is not required to 
do so. Elective deferrals can be made up only to the extent that the 
employee has compensation from the employer that can be deferred. 
Proposed section 1002.262 provides that, if an individual cannot make 
up missed contributions as an elective deferral because he or she does 
not have enough compensation from the employer to defer (for example, 
if the individual is no longer employed by the employer), the plan must 
provide an equivalent opportunity for the individual to receive the 
maximum employer matching contributions that were available under the 
plan during the period of uniform service through a match of after-tax 
contributions.
    USERRA is silent with respect to the amount of time allowed the 
employer to pay to the plan the contributions attributable to a 
reemployed service member's period of military service. It is the view 
of the Department that employer contributions to a pension plan that 
are not contingent on employee contributions or elective deferrals must 
be made no later than thirty days after the date of the person's 
reemployment. Interested parties are requested to comment on this 
proposed requirement, implemented in proposed section 1002.262. 
Specifically, the Department requests public comment on whether the 
proposed thirty-day period is too long or too short.
    Where pension benefits are derived from employee contributions or 
elective deferrals, or from a combination of employee contributions or 
elective deferrals and matching employer contributions, the reemployed 
service member may make his or her contributions or deferrals during a 
time period starting with the date of reemployment and continuing for 
up to three times the length of the employee's immediate past period of 
military service, with the repayment period not to exceed five years. 
38 U.S.C. 4318(b)(2); proposed section 1002.262. No payment by the 
service member may exceed the amount that would have been required or 
permitted during the period of time had the service member remained 
continuously employed. 38 U.S.C. 4318(b)(2). Any permitted or required 
amount of employee contributions or elective deferrals would be 
adjusted for any employee contributions or elective deferrals made to 
the plan during the employee's period of service. Any employer 
contributions that are contingent on employee contributions or elective 
deferrals must be made according to the plan's requirements for 
employer matching contributions. The Department also invites comments 
as to whether this interpretation best

[[Page 56279]]

effectuates the purpose of this provision.
    USERRA does not specify whether the returning service member is 
entitled to partial credit in return for making up part (but not all) 
of the missed employee contributions or elective deferrals, but it does 
not require that the employee make up the full amount. Given that 
returning service members often face financial hardships on their 
return to civilian employment, and in view of the remedial purposes of 
USERRA, the Department interprets the Act to permit the employee to 
partially make up missed employee contributions (including required 
employee contributions to a defined benefit plan) or elective 
deferrals. In such a situation, the employer is required to make any 
contributions that are contingent on employee make-up contributions or 
elective deferrals only to the extent that the employee makes such 
partial contributions or elective deferrals. See proposed section 
1002.262. For example, in a plan where the employee may or must 
contribute from zero to five percent of his or her compensation, and 
receive a commensurate employer match, the reemployed service member 
must be permitted to partially make up a missed contribution and 
receive the employer match. Where contributions from all employees are 
handled in a similar, consistent fashion under the plan, either the 
plan documents or the normal, established practices of the plan control 
the disposition of partial contributions or elective deferrals.
    Under proposed section 1002.264, if the service member has 
withdrawn his or her account balance from the employee pension benefit 
plan prior to entering military service, he or she must be allowed to 
repay the withdrawn amounts upon reemployment. The amount to be repaid 
also includes any interest that would have been earned had the monies 
not been withdrawn. Repayment entitles the individual to appropriate 
credit in the plan. The reemployed service member may make his or her 
contributions or deferrals during a time period starting with the date 
of reemployment and continuing for up to three times the length of the 
employee's immediate past period of military service, with the 
repayment period not to exceed five years; during the time period 
provided by 26 U.S.C. 411(a)(7)(C) (if applicable); or within such 
longer time period as may be agreed to between the employer and service 
member. Proposed section 1002.264 applies to defined benefit plans and 
defined contribution plans. The Department invites comments on whether 
or how this section should apply to defined contribution plans.
    Section 4318(b)(3) describes the method for calculating the 
reemployed service member's compensation for the period of military 
service to determine the amount the employer and service member must 
contribute under the plan. 38 U.S.C. 4318(b)(3). Proposed section 
1002.267 provides that the compensation rate the reemployed service 
member would have earned had he or she remained continuously employed 
provides the usual benchmark. If that rate cannot be determined with 
reasonable certainty (for example, where the rate varies based on 
commissions or tips), the compensation rate may be based on the service 
member's average compensation rate during the 12-month period before 
the service period. For an employee who worked fewer than 12 months 
before entering the service, the entire employment period just prior to 
the service period may be used.
    The employer must allocate its contribution on behalf of the 
employee in the same manner as contributions made for other employees 
during the period of the service member's service were allocated. 
However, under proposed section 1002.265, the employer is not required 
to allocate accrued earnings and forfeitures to the reemployed service 
member. 38 U.S.C. 4318(b)(1).
    Special rules apply to multiemployer plans. 38 U.S.C. 4318(b)(1). 
Proposed section 1002.266 focuses on the operation of multiemployer 
plans. ERISA defines the term ``multiemployer plan'' as a plan to which 
more than one employer is required to contribute; which is maintained 
pursuant to one or more collective bargaining agreements between one or 
more employee organizations and more than one employer; and, which 
satisfies regulations prescribed by the Secretary of Labor. 29 U.S.C. 
1002(37). An individual's period of uniformed service that qualifies as 
employment for purposes of section 4318(a)(2) is also employment under 
the terms of the pension benefit plan; any applicable collective 
bargaining agreement under 29 U.S.C. 1145; or, any similar Federal or 
State law requiring employers who contribute to multiemployer plans to 
make contributions as specified in plan documents.
    With a multiemployer plan, a service member does not have to be 
reemployed by the same employer for whom he or she worked prior to the 
period of service in order to be reinstated in the pension plan. As 
long as the employer is a contributing employer to the plan, the 
service member is entitled to be treated as though he or she 
experienced no break in service under the plan. Proposed section 
1002.266 describes the allocation of the employer's obligation to fund 
employer contributions for reemployed service members participating in 
multiemployer plans. Initially, the benefits liability is to be 
allocated as specified by the sponsor maintaining the plan. 38 U.S.C. 
4318(b)(1)(A). Both of the bargaining parties, usually the union(s) and 
the employers, and the plan trustees of a multiemployer plan are 
sponsors of the plan. The initial allocation by the plan sponsor(s) is 
likely to vary from plan to plan. For purposes of USERRA, if the plan 
documents make no provision to allocate the obligation to contribute, 
then the individual's last employer before the service period is liable 
for the employer contributions. In the event that entity no longer 
exists or functions, the plan must nevertheless provide coverage to the 
service member. 38 U.S.C. 4318(b)(1)(B).
    By authorizing the plan sponsors to designate how the contribution 
is to be paid, Congress intended to give employers, employee 
organizations and plan trustees (all of whom are plan sponsors) 
flexibility in structuring the payment obligation to suit the plan's 
particular circumstances. ``The Committee intends that multiemployer 
pension plan trustees or bargaining parties should be able to adopt 
uniform standard rules under which another employer, such as the last 
employer for which the individual worked before going into the 
uniformed service or the employer for which the returning service 
member had the most service during a given period following release 
from the uniformed service, may be considered the `reemploying' 
employer for purposes of the pension provisions of Chapter 43. The 
Committee also intends for multi-employer pension plan trustees to have 
the right to determine that it would be more appropriate not to make 
any individual employer liable for such costs and thus to be able to 
adopt rules under which returning service members' reconstructed 
benefits would be funded out of plan contributions and other assets 
without imposing a specific additional funding obligation on any one 
employer.'' S. Rep. No. 103-158, at 65 (1993). With respect to both 
multiemployer and single employer plans, however, the Committee 
indicated: ``It is the intent of the Committee that, with respect to 
allocations to individual account plans under section 3(34) of ERISA,

[[Page 56280]]

allocations to the accounts of returning service members not be 
accomplished by reducing the account balances of other plan 
participants.'' Id.
    If an employer participating in a multiemployer plan reemploys an 
individual who is entitled to pension benefits attributable to military 
service, then the employer must notify the plan administrator of the 
reemployment within 30 days. 38 U.S.C. 4318(c). USERRA requires this 
notice because multiemployer plan administrators may not be aware that 
a contributing employer has reemployed a person who may have a pension 
claim arising from his or her military service. In contrast, 
administrators of single employer pension plans are more likely to have 
access to such information. This notification requirement is 
implemented by proposed section 1002.266.
    Although a service member who is not reemployed under the Act would 
not be entitled to pension benefits for his or her period of service, 
any vested accrued benefit in the plan to which the service member was 
entitled prior to entering military service would remain intact whether 
or not he or she was reemployed. Joint Explanatory Statement on H.R. 
995, 103-353, at 2507 (1994); H.R. Rep. No. 103-65, Part I, at 36-37 
(1993). The terms of the plan document control the manner and timing of 
distributions of vested accrued benefits from the plan if the service 
member is not reemployed by a participant employer.
    USERRA provides specific guidance on certain aspects of the 
reemployed service member's pension plan rights. At the same time, 
employers, fiduciaries and plan administrators must also comply with 
other laws that regulate plan administration but are beyond the scope 
of these proposed regulations. Federal and State laws governing the 
establishment and operation of pension plans, such as ERISA or the 
Internal Revenue Code of 1986, as amended, and the regulations of the 
Pension Benefit Guaranty Corporation, continue to apply in the context 
of providing benefits under USERRA. Thus, for example, while section 
4318(b)(1)(A) provides that liability for funding multiemployer pension 
plan benefits for a reemployed service member shall be allocated as the 
plan sponsor specifies, laws other than USERRA govern the technical 
aspects of the allocation.

Subpart F--Compliance Assistance, Enforcement and Remedies

Compliance Assistance
    USERRA authorizes the Secretary of Labor to provide assistance to 
any person regarding the employment and reemployment rights and 
benefits provided under the statute. 38 U.S.C. 4321. The Secretary acts 
through the Veterans' Employment and Training Service (VETS). USERRA 
promotes the resolution of complaints without resort to litigation. In 
order to facilitate this process, section 4321 allows VETS to request 
assistance from other Federal and State agencies and volunteers engaged 
in similar or related activities. Proposed section 1002.277 describes 
VETS' authority to provide assistance to both employees and employers. 
VETS' assistance is not contingent upon the filing of a USERRA 
complaint.
Investigation and Referral
    Proposed section 1002.288 implements section 4322, which authorizes 
VETS to enforce an individual's USERRA rights. Any person claiming 
rights or benefits under USERRA may file a complaint with VETS if his 
or her employer fails or refuses to comply with the provisions of 
USERRA, or indicates that it will not comply in the future. 38 U.S.C. 
4322(a). This avenue, however, is optional. Nothing in section 4322 
requires an individual to file a complaint with VETS, to request 
assistance from VETS, or to await notification from VETS of the right 
to bring an enforcement action. Palmatier v. Michigan Dept. of State 
Police, 981 F. Supp. 529 (W.D. Mich. 1997). Invoking VETS' enforcement 
authority is an alternative provided by the statute once an employee 
decides to file a USERRA complaint. See Gagnon v. Sprint Corp., 284 
F.3d 839, 854 (8th Cir. 2002). Alternatively, the individual may file a 
complaint directly in the appropriate United States District Court or 
State court in cases involving a private sector or State employer, 
respectively (or the Merit Systems Protection Board in cases involving 
a Federal executive agency). See 38 U.S.C. 4323(b) (direct action 
against State or private employer); 38 U.S.C. 4324(b) (direct action 
against Federal executive agency). See proposed sections 1002.288 and 
1002.303. The Office of Personnel Management has issued a separate body 
of regulations that implement USERRA for employees of Federal executive 
agencies. See 5 CFR Part 353.
    Proposed section 1002.288 also implements the statutory criteria 
for the form of a complaint. 38 U.S.C. 4322(b). Any complaint submitted 
to VETS must be in writing, using VETS Form 1010, which may be found at 
http://www.dol.gov/libraryforms/forms/vets/vets-1010.pdf. The proposed 
regulation also contains the procedures for processing a complaint. 
VETS provides technical assistance to a potential claimant upon 
request, and his or her employer if appropriate. 38 U.S.C. 4322(c). 
Technical assistance is not limited to filing a complaint; it also 
includes responding to requests for information on specific issues that 
are not yet part of a formal USERRA complaint. Once an individual files 
a complaint, VETS must conduct an investigation. If the agency 
determines that a violation of USERRA has occurred, VETS undertakes 
``reasonable efforts'' to effectuate compliance by the employer (or 
other entity) with its USERRA obligations. Proposed section 
1002.289-.290; 38 U.S.C. 4322(d). VETS notifies the claimant of the 
outcome of the investigation and the claimant's right to request that 
VETS refer the case to the Attorney General). See 38 U.S.C. 4322(e), 
4323.
    Section 1002.289 sets forth VETS' authority to use subpoenas in 
connection with USERRA investigations. VETS may (i) require by subpoena 
the attendance and testimony of witnesses and the production of 
documents relating to any matter under investigation; and (ii) enforce 
the subpoena by requesting the Attorney General to apply to a district 
court for an appropriate order. 38 U.S.C. 4326(a)-(b). VETS' subpoena 
authority does not apply to the judicial or legislative branch of the 
Federal Government. 38 U.S.C. 4326(d).
Enforcement of Rights and Benefits Against a State or Private Employer
    Section 4323 establishes the procedures for enforcing USERRA rights 
against a State or private employer. ``State'' includes the several 
States of the United States, the District of Columbia, the Commonwealth 
of Puerto Rico, Guam, the Virgin Islands, and other territories of the 
United States. 38 U.S.C. 4303(14). The political subdivisions of a 
State (counties, municipalities and school districts), however, are 
private employers for enforcement purposes. 38 U.S.C. 4323(j). Although 
USERRA does not define ``private employer,'' the term includes all 
employers other than the Federal Government or a State. Proposed 
sections 1002.303 to .314 implement section 4323 of the Act.
    An aggrieved individual may initiate a USERRA action either by 
filing an action in court or by filing a complaint with VETS. If a 
complaint is filed with VETS and voluntary compliance cannot be 
achieved, the claimant may request VETS to refer the complaint to the 
Attorney General. 38 U.S.C. 4323(a)(1). If the Attorney General 
considers the complaint meritorious, the Attorney

[[Page 56281]]

General may represent the claimant and file a complaint in the 
appropriate U.S. district court. In cases where representation is 
provided by the Attorney General, the complainant is the plaintiff if 
the case is brought against a private employer, including a political 
subdivision of a State; however, if the complaint involves a State 
employer, it is brought in the name of the United States. A claimant 
may also proceed directly to the courts in the following circumstances: 
(i) The claimant foregoes informal resolution by VETS; (ii) the 
claimant declines referral of the complaint to the Attorney General 
after an unsuccessful informal resolution; or, (iii) the Attorney 
General refuses to represent the claimant after referral. 38 U.S.C. 
4323(a)(2). Proposed sections 1002.303 and .304 implement these 
provisions.
    Section 4323 establishes requirements for several aspects of the 
judicial process involving USERRA complaints, which are explained in 
proposed sections 1002.305 through 1002.311. The United States district 
courts have jurisdiction over actions against a State or private 
employer brought by the United States, and actions against a private 
employer by a person. For actions brought by a person against a State, 
the action may be brought in a State court of competent jurisdiction. 
38 U.S.C. 4323(b); proposed section 1002.305. Venue for an action 
between the United States and a State lies in any Federal district in 
which the State exercises authority or carries out functions. Venue for 
an action against a private employer lies in any Federal district in 
which the employer maintains a place of business. 38 U.S.C. 4323(c); 
proposed section 1002.307. Only persons claiming rights or benefits 
under USERRA (or the United States acting on their behalf) have 
standing to initiate a USERRA action. 38 U.S.C. 4323(f). Proposed 
section 1002.308 therefore prohibits employers or other entities (such 
as pension plans or unions) from initiating actions. See H.R. Rep. No. 
103-65, at 39 (1993). As for the respondents necessary to maintain an 
action, the statute requires only the employer or prospective employer 
to be named as necessary parties. 38 U.S.C. 4323(g); see H.R. Rep. No. 
103-65, at 39 (1993). Proposed section 1002.309 implements this 
restriction.
    No fees or court costs may be imposed on the claimant. In addition, 
a prevailing claimant may recover his or her attorney's fee, expert 
witness fee, and other litigation expenses. 38 U.S.C. 4323(h); proposed 
section 1002.310.
    No State statute of limitations applies to a USERRA proceeding. 38 
U.S.C. 4323(i). Proposed section 1002.311 provides that an unreasonable 
delay by the claimant in asserting his or her rights that causes 
prejudice to the employer may result in dismissal of the claim under 
the doctrine of laches. See H.R. Rep. No. 103-65, at 39 (1994). The 
legislative history relies in part on a Sixth Circuit decision, which 
held that any limitation upon a former employee's right to sue is 
derived from the equitable doctrine of laches rather than an analogous 
State statute of limitations. See Stevens v. Tennessee Valley 
Authority, 712 F.2d 1047, 1049 (6th Cir. 1983) (decided under the 
predecessor Veterans' Reemployment Rights Act).
    The Department has long taken the position that no Federal statute 
of limitations applied to actions under USERRA. USERRA's provision that 
State statutes of limitations are inapplicable, together with USERRA's 
legislative history, show that the Congress intended that the only 
time-related defense that may be asserted in defending against a USERRA 
claim is the equitable doctrine of laches. 38 U.S.C. 4323(i); see S. 
Rep. No. 103-158, at 70 (1993); H.R. Rep. No. 103-65, at 39. Recently, 
a Federal district court ruled that USERRA claims are subject to a 
four-year statute of limitations enacted prior to the enactment of 
USERRA that imposes a general limitations period for all Federal causes 
of action where no statute of limitations is ``otherwise provided by 
law,'' 28 U.S.C. 1658. Rogers v. City of San Antonio, No. Civ. A. SA-
99-CA-1110, 2003 WL 1566502 (W.D. Tex. Mar. 4, 2003). The Rogers 
decision is on appeal to the Fifth Circuit Court of Appeals. City of 
San Antonio v. Rogers, No. 03-50588 (5th Cir.) Another recent district 
court decision, Akhdary v. City of Chattanooga, No. 1:01-CV-106, 2002 
WL 32060140 (E.D. Tenn. May 22, 2002), held that 28 U.S.C. 1658 does 
not apply to USERRA claims. The recent decision of the United States 
Supreme Court in Jones v. R. R. Donnelley & Sons Co., No. 02-1205, 2004 
WL 936488 (U.S. May 3, 2004) is not dispositive because USERRA 
``otherwise provides by law'' that no statute of limitations applies, 
and because, with respect to some USERRA claims, the cause of action 
previously existed under the VRRA and consequently predates the 
effective date of 28 U.S.C. 1658. The Department continues to believe 
that no statute of limitations applies to USERRA claims but invites 
comments on the validity of this view in light of the conflicting court 
decisions.
    With respect to remedies, the court has broad authority to protect 
the rights and benefits of persons covered by USERRA. The court may 
order the employer to comply with USERRA's provisions; compensate the 
claimant for lost wages and/or benefits; and pay additional, 
liquidated, damages equivalent to the lost wages/benefits if it 
determines that the employer's violation is willful. 38 U.S.C. 
4323(d)(1). The legislative history establishes that ``a violation 
shall be considered to be willful if the employer or potential employer 
`either knew or showed reckless disregard for the matter of whether its 
conduct was prohibited by the [provisions of this chapter].' '' H.R. 
Rep. No. 103-65, at 38 (1994), quoting Hazen Paper Co. v. Biggins, 507 
U.S. 604, 617 (1993) (holding that a violation of the ADEA is willful 
if the employee either knew or showed reckless disregard for whether 
the statute prohibited its conduct). Proposed section 1002.312 lists 
the possible remedies allowed under section 4323(d). Proposed section 
1002.313 states that compensation consisting of lost wages, benefits or 
liquidated damages derived from any action brought on behalf of the 
United States shall be paid directly to the aggrieved individual. 
Finally, the court may use its equity powers to enforce the rights 
guaranteed by USERRA. 38 U.S.C. 4323(e); proposed section 1002.314.
Effective Date and Compliance Deadlines
    These regulations impose no new legal requirements but explain 
existing ones, in some cases for the first time. The Department 
proposes that these regulations be effective 30 days after publication 
of the final rule, and requests comment on whether this allows adequate 
time for covered parties to come into full compliance. We expect that 
most employers are currently in full compliance. However, to the extent 
that these regulations clarify USERRA's requirements and require 
adjustments in employer policies and practices, the Department wants to 
allow a reasonable amount of time for the transition to take place.

V. Procedural Determinations

A. Paperwork Reduction Act

    This rule involves information collection, recordkeeping, or 
reporting requirements, as described in the chart below. As required by 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.), these 
requirements have been submitted to the Office of Management and 
Budget. Send comments regarding this burden or any other aspect of this 
collection of information, including

[[Page 56282]]

suggestions for reducing this burden, to: Office of Information and 
Regulatory Affairs (Attention: Katherine Astrich, Desk Officer for 
VETS), 725 17th St., NW., Washington, DC 20503. In addition to regular 
mail, OIRA will accept comments via electronic mail to 
[email protected], or by Fax at (202) 395-6974. Please include 
``Docket No. VETS-U-04'' on the subject line of the email, fax or 
letter. Note that security-related problems may result in significant 
delays in receiving comments by regular mail. In addition, the Agency 
encourages commenters to submit their comments on the paperwork 
determination to VETS using the methods described above under 
ADDRESSES.

   Comparison of Proposed and Statutory Language Containing Paperwork
                              Requirements
------------------------------------------------------------------------
                                             Statutory provision and
    Proposed provision and language                  language
------------------------------------------------------------------------
1002.85(a) * * * You or an appropriate   4312(a)(1) [Reemployment rights
 officer of the uniformed service in      and benefits available if] the
 which your service is to be performed,   person (or an appropriate
 must notify your employer that you       officer of the uniformed
 intend to leave your employment          service in which such service
 position to perform service in the       is performed) has given
 uniformed services. * * *.               advance written or verbal
1002.85(c) Your notice to your employer   notice of such service to such
 may be either verbal or written..        person's employer[.]
1002.115 * * * When you complete your    4312(a)(3) [Reemployment rights
 service in the uniformed services, you   and benefits available if] the
 must notify your pre-service employer    person reports to, or submits
 of your intent to return to your         an application for
 employment position by either            reemployment to, such employer
 reporting to work or submitting a        in accordance with the
 timely application for employment.       provisions of subsection (e).
1002.118 * * * You may apply either
 orally or in writing..
1002.193 * * * Your employer must        4313(a)(2)(A) [A person
 determine your seniority rights,         entitled to reemployment shall
 status, and rate of pay as though you    be promptly reemployed] in the
 had been continuously employed during    position of employment in
 the period of service.                   which the person would have
                                          been employed if the
                                          continuous employment of such
                                          person with the employer had
                                          not been interrupted by such
                                          service, or a position of like
                                          seniority, status and pay
                                          [with certain exceptions].
1002.266(b) An employer that             4318(c) Any employer who
 contributes to a multiemployer plan      reemploys a person under this
 and that reemploys you must provide      chapter and who is an employer
 written notice of your reemployment to   contributing to a
 the plan administrator. * * *.           multiemployer plan * * * under
                                          which benefits are or may be
                                          payable to such person by
                                          reason of the obligations set
                                          forth in this chapter, shall *
                                          * * provide information, in
                                          writing, of such reemployment
                                          to the administrator of the
                                          plan.
1002.228 * * * A complaint filed with    4322(b) Such complaint shall be
 VETS must be in writing, using VETS      in writing, be in such form as
 Form 1010, and must include the name     [VETS] may prescribe, include
 and address of your employer, a          the name and address of the
 summary of the basis for your            employer against whom the
 complaint, and a request for relief.     complaint is filed, and
                                          contain a summary of the
                                          allegations that form the
                                          basis of for the complaint.
Note: VETS Form 1010 is currently
 approved by OMB,  1293-0002,
 expiration date March 2007.
------------------------------------------------------------------------

B. Preliminary Economic Analysis and Regulatory Flexibility 
Certification

    This rule is being treated as a ``significant regulatory action'' 
within the meaning of Executive Order 12866, because of its importance 
to the public and the Department's priorities. Therefore, the Office of 
Management and Budget has reviewed the rule. However, because this rule 
is not ``economically significant'' as defined in section 3(f)(1) of EO 
12866, it does not require a full economic impact analysis under 
section 6(a)(3)(C) of the Order. The proposed rule is not a ``major 
rule'' under the Unfunded Mandates Reform Act or Section 801 of the 
Small Business Regulatory Enforcement Fairness Act (SBREFA). The 
proposal would impose no additional costs on any private or public 
sector entity, and does not meet any of the criteria for a economically 
significant or major rule specified by the Executive Order or relevant 
statutes.
    The Senate Committee report accompanying the passage of USERRA 
noted that the ``[Congressional Budget Office] estimates that the 
enactment of [section 9 of USERRA, transitioning from the predecessor 
veterans' reemployment rights law to USERRA] would entail no 
significant cost.'' (See Senate Report No. 103-158, p. 82 (1993).) The 
same report states further on page 84, under the heading ``Regulatory 
Impact Statement,'' that:

    [T]he Committee [on Veterans'' Affairs] has made an evaluation 
of the regulatory impact which would be incurred in carrying out the 
Committee bill. The Committee finds that the enactment of the bill 
would not entail any significant new regulation of individuals or 
business. * * *

    USERRA is the latest in a series of laws protecting veterans' 
employment and reemployment rights going back to the Selective Training 
and Service Act of 1940. USERRA's immediate predecessor was the VRRA. 
USERRA continued the fundamental protections of the VRRA and the case 
law interpreting the VRRA while clarifying that law, and VETS considers 
that by recodifying and clarifying longstanding statutory and case law 
under the VRRA, USERRA did not impose new economic burdens on 
employers. This proposed rule implements USERRA, and while it imposes 
no new costs, it may provide some economic benefits. Delays may occur 
when employers respond to employee claims and inquiries concerning 
USERRA due to confusion or ambiguity as to the correct interpretation 
of USERRA. Moreover, some employee claims are contested in part because 
of a lack of employer knowledge about the statute. The proposed rule 
should reduce these costs by: providing employers with accurate 
information necessary to respond efficiently and effectively to 
employee claims; potentially reducing the number of contested claims 
and the resulting need for administrative resolution or legal action; 
expediting the settlement of outstanding claims because employers and 
employees will have an enhanced knowledge of their rights and 
responsibilities under USERRA; and reducing the number of inquiries 
made by employers and employees to administrative agencies such as VETS 
and the Office of Personnel Management.
    VETS also expects the proposed rule to benefit both pension- and 
health-plan

[[Page 56283]]

sponsors and participants by helping to dispel plan administrators' 
uncertainty about compliance with USERRA provisions, and by reducing 
delays and the risk of inadvertent noncompliance. The rule may assist 
participants and beneficiaries to better understand their USERRA rights 
as well, thereby averting disputes and lost opportunities to elect 
continuing health-plan coverage, or to obtain reinstated pension-plan 
coverage.
    Based on the above analysis, the Agency concludes that the proposed 
rule would not impose any additional costs on employers; consequently, 
the proposal requires no preliminary economic analysis. Furthermore, 
because the proposal imposes no costs on employers, VETS certifies that 
it would not have a significant impact on a substantial number of small 
businesses; accordingly, the Agency need not prepare an initial 
regulatory flexibility analysis.

C. Unfunded Mandates

    The Congressional Budget Office (CBO) determined that State and 
local governments would incur no cost resulting from passage of USERRA 
(see Senate Report No. 103-158, p. 84 (1993)). In this regard, State 
and local governments would be obligated to comply with USERRA to the 
same extent as private employers; therefore, when USERRA (and the 
proposed rule) impose no cost on private employers, they also impose no 
cost on State and local government employers. The House Committee 
Report for USERRA (House Report No. 103-65, pp. 49-51) contained 
similar CBO language.\1\
---------------------------------------------------------------------------

    \1\ However, the CBO determined that, because of changes to 
Thrift Savings Plan provisions, the cost for the Federal government 
to comply with USERRA would be about $1 million in FY 1994 and 1995, 
and zero cost thereafter.
---------------------------------------------------------------------------

    The Agency reviewed the proposed rule according to the Unfunded 
Mandates Reform Act of 1995 (2 U.S.C. 1501 et seq.) and Executive Order 
12875. Based on the CBO determinations described in the previous 
paragraph, the Agency made a preliminary determination that the 
proposed rule does not include any Federal mandate that would result in 
increased expenditures by State, local, or tribal governments in the 
aggregate of more than $100 million, or increased expenditures by the 
private sector of more than $100 million. Therefore, the Agency 
concludes that the proposed rule: (1) Would not affect State, local, or 
tribal entities significantly or uniquely; (2) does not contain an 
unfunded mandate requiring consultation with these entities; and (3) 
would not impose substantial direct compliance costs on Indian tribal 
governments. Accordingly, the proposed rule does not mandate that 
State, local, or tribal governments adopt new, unfunded regulatory 
obligations.

D. Federalism

    The proposed rule does not have federalism implications as 
specified under Executive Order 13132 (64 FR 43255; August 10, 1999) 
because it has no substantial direct effect on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. Section 4302 of USERRA provides that its provisions 
supersede any and all laws of the States as they relate to any rights 
and benefits provided under USERRA if such State laws reduce, limit, or 
eliminate in any manner any right or benefit provided by USERRA. 
Accordingly, the requirements implemented by the proposed rule do not 
alter these fundamental statutory provisions with respect to military 
service members' and veterans' employment and reemployment rights and 
benefits. Therefore, the proposed rule has no implications for the 
States, or for the relationship or distribution of power between the 
national government and the States.

VI. Statutory and Rulemaking Background

    The Uniformed Services Employment and Reemployment Rights Act 
(USERRA), Pub. L. 103-353, 108 Stat. 3150 (codified at 38 U.S.C. 4301-
4333), became law on October 13, 1994, replacing the Veterans' 
Reemployment Rights Act (VRRA). Congress enacted USERRA, in part, to 
clarify the ambiguities of the VRRA and strengthen the rights of 
service members and veterans. USERRA's guiding principle is that a 
person who leaves civilian employment to perform service in the 
uniformed services is entitled to return to that job with the 
seniority, status, and rate of pay that would have accrued during the 
absence, provided the person meets USERRA's eligibility criteria. 
USERRA applies to voluntary or involuntary military service in 
peacetime as well as wartime. Its provisions apply to virtually all 
employers, regardless of size. USERRA also codifies 54 years of 
accumulated case law and clarifies previously existing rights and 
obligations. For most purposes, USERRA applies to reemployments 
initiated on or after December 12, 1994. Congress enacted amendments to 
the Act in 1996, 1998, and 2000.

VII. Statutory Authority

    This regulation is proposed pursuant to the authority in section 
4331(a) of USERRA (Pub. L. 103-353, 108 Stat. 3150, 38 U.S.C. 4331(a)), 
and Secretary's Order 3-2004, September 10, 2004.

List of Subjects in 20 CFR Part 1001

    Labor, Pensions, Veterans.

Proposed Regulation

    For the reasons set out in the preamble, the Department proposes to 
add a new part 1002 to Chapter IX of Title 20 of the Code of Federal 
Regulations as follows:

PART 1002--REGULATIONS UNDER THE UNIFORMED SERVICES EMPLOYMENT AND 
REEMPLOYMENT RIGHTS ACT OF 1994

Subpart A--Introduction to the Regulations Under the Uniformed Services 
Employment and Reemployment Rights Act of 1994

General Provisions

Sec.
1002.1 What is the purpose of the regulations in this part?
1002.2 Is USERRA a new law?
1002.3 When did USERRA become effective?
1002.4 What is the role of the Secretary of Labor under USERRA?
1002.5 What definitions will help me understand USERRA?
1002.6 What types of service in the uniformed services are covered 
by USERRA?
1002.7 How does USERRA relate to other laws, public and private 
contracts, and employer practices?
Subpart B--Anti-Discrimination and Anti-Retaliation

Protection From Employer Discrimination and Retaliation

1002.18 What activity is protected from employer discrimination by 
USERRA?
1002.19 Is any other activity protected under USERRA?
1002.20 Does USERRA protect me if I do not actually perform service 
in the uniformed service?
1002.21 Do the Act's prohibitions against discrimination and 
retaliation apply to all employment positions?
1002.22 Who has the burden of proving discrimination or retaliation 
in violation of USERRA?
1002.23 What do I have to show to carry my burden of proving that my 
employer discriminated or retaliated against me?
Subpart C--Eligibility for Reemployment

General Eligibility Requirements for Reemployment

1002.32 What criteria must I meet to be eligible under USERRA for 
reemployment after my service in the uniformed services?

[[Page 56284]]

1002.33 To be eligible for reemployment, do I have to show that my 
employer discriminated against me?

Coverage of Employers and Positions

1002.34 Which employers are covered by USERRA?
1002.35 Is a successor in interest an employer covered by USERRA?
1002.36 Can an employer be liable as a successor in interest if it 
was unaware of my potential reemployment claim when it acquired the 
business?
1002.37 Is it possible for me to be employed in one job by more than 
one employer?
1002.38 Can a hiring hall be my employer?
1002.39 Are States (and their political subdivisions), the District 
of Columbia, the Commonwealth of Puerto Rico, and United States 
territories, considered employers?
1002.40 Does USERRA protect against discrimination in initial hiring 
decisions?
1002.41 Can I have rights under USERRA even though I hold a 
temporary, part-time, probationary, or seasonal employment position?
1002.42 What rights do I have under USERRA if I am on layoff, on 
strike, or on a leave of absence?
1002.43 Can I have rights under USERRA even if I am an executive, 
managerial, or professional employee?
1002.44 Does USERRA cover me if I am an independent contractor?

Coverage of Service in the Uniformed Services

1002.54 Are all military fitness examinations considered ``service 
in the uniformed services?''
1002.55 Is all funeral honors duty considered ``service in the 
uniformed services?''
1002.56 I am participating in a training program to provide 
emergency assistance in the event of a terrorist attack. Is that 
considered ``service in the uniformed services?''
1002.57 Is all of my service as a member of the National Guard 
considered ``service in the uniformed services?''
1002.58 Is my service in the commissioned corps of the Public Health 
Service considered ``service in the uniformed services?''
1002.59 Are there any circumstances in which special categories of 
persons are considered to perform ``service in the uniformed 
services?''
1002.60 If I am a cadet or midshipman attending a service academy am 
I covered by USERRA?
1002.61 If I am a member of the Reserve Officers Training Corps am I 
covered by USERRA?
1002.62 If I am a member of the Commissioned Corps of the National 
Oceanic and Atmospheric Administration, the Civil Air Patrol, or the 
Coast Guard Auxiliary am I covered by USERRA?

Absence From a Position of Employment Necessitated by Reason of Service 
in the Uniformed Services

1002.73 Does service in the uniformed services have to be my sole 
reason for leaving my employment position in order to have USERRA 
reemployment rights?
1002.74 Am I required to begin service in the uniformed services 
immediately after leaving my employment position in order to have 
USERRA reemployment rights?

Requirement of Notice

1002.85 Am I required to give advance notice to my employer of my 
service in the uniformed services?
1002.86 When am I excused from giving advance notice of my service 
in the uniformed services?
1002.87 Am I required to get permission from my employer before I 
leave to perform service in the uniformed services?
1002.88 Am I required to tell my civilian employer that I intend to 
seek reemployment after completing my military service before I 
leave to perform service in the uniformed services?

Period of Service

1002.99 Is there a limit on the total amount of service in the 
uniformed services that I may perform and still retain reemployment 
rights with my employer?
1002.100 Does the five-year service limit include all absences from 
my employment position that are related to my service in the 
uniformed services?
1002.101 Does the five-year service limit include periods of service 
that I performed when I worked for a previous employer?
1002.102 Does the five-year limit include periods of service that I 
performed before USERRA was enacted?
1002.103 Are there any types of service in the uniformed services 
that I can perform that do not count against USERRA's five-year 
service limit?
1002.104 Am I required to accommodate my employer's needs as to the 
timing, frequency or duration of my service?

Application for Reemployment

1002.115 Am I required to report to or submit a timely application 
for reemployment to my pre-service employer when I complete my 
period of service in the uniformed services?
1002.116 Is my time period for reporting back to my employer 
extended if I am hospitalized for, or convalescing from, an illness 
or injury incurred in, or aggravated during, the performance of 
service?
1002.117 Are there any consequences if I fail to report for or 
submit a timely application for reemployment?
1002.118 Is my application for reemployment required to be in any 
particular form?
1002.119 To whom must I submit my application for reemployment?
1002.120 If I seek or obtain employment with an employer other than 
my pre-service employer before the end of the period within which my 
reemployment application must be filed, will that jeopardize my 
reemployment rights with my pre-service employer?
1002.121 Am I required to submit documentation to my employer in 
connection with my application for reemployment?
1002.122 Is my employer required to reemploy me if documentation 
establishing my eligibility does not exist or is not readily 
available?
1002.123 What documents satisfy the requirement that I establish my 
eligibility for reemployment after a period of service of more than 
thirty days?

Character of Service

1002.134 What type of discharge or separation from military service 
is required for me to be entitled to reemployment under USERRA?
1002.135 What type of discharge or separation from military service 
will make me ineligible for reemployment under USERRA?
1002.136 Who determines the characterization of my service?
1002.137 If I receive a disqualifying discharge or release from 
uniformed service and it is later upgraded, will my right to 
reemployment be restored?
1002.138 If I receive a retroactive upgrade in my characterization 
of service will that entitle me to claim back wages and benefits 
lost as of my date of separation from service?

Employer Statutory Defenses

1002.139 Are there any circumstances in which my pre-service 
employer is excused from its obligation to reemploy me following a 
period of military service? What statutory defenses are available to 
the employer in an action or proceeding for reemployment benefits?
Subpart D--Rights, Benefits, and Obligations of Persons Absent From 
Employment Due to Service in the Uniformed Services

Furlough and Leave of Absence

1002.149 What is my status with my civilian employer when I am 
performing service in the uniformed services?
1002.150 What non-seniority rights and benefits am I entitled to 
during my period of service?
1002.151 If my employer provides full or partial pay to me while I 
am on military leave is it required to also provide me with the non-
seniority rights and benefits ordinarily granted to similarly 
situated employees on furlough or leave of absence?
1002.152 If my employment is interrupted by a period of service in 
the uniformed services, are there any circumstances under which I am 
not entitled to the non-seniority rights and benefits ordinarily 
granted to similarly situated employees on furlough or leave of 
absence?
1002.153 If my employment is interrupted by a period of service in 
the uniformed

[[Page 56285]]

services can I use my accrued vacation, annual or similar leave with 
pay during the service? Can my employer require me to use my accrued 
leave during the period of service?

Health Plan Coverage

1002.163 What types of health plans are covered by USERRA?
1002.164 What health plan coverage must my employer provide to me 
under USERRA?
1002.165 How do I elect continuing health plan coverage?
1002.166 How much do I have to pay in order to continue my health 
plan coverage?
1002.167 If my coverage was terminated at the beginning of or during 
my service, does my coverage have to be reinstated upon my 
reemployment?
1002.168 Can I elect to delay reinstatement of my health plan 
coverage until a date after the date I am reemployed?
1002.169 Which employer is responsible for providing me with 
continuing health plan coverage if I am enrolled under a 
multiemployer plan?
Subpart E--Reemployment Rights and Benefits

Prompt Reemployment

1002.180 When am I entitled to be reemployed by my civilian 
employer?
1002.181 How is ``prompt reemployment'' defined?

Reemployment Position

1002.191 What position am I entitled to upon my reemployment?
1002.192 How is my specific reemployment position determined?
1002.193 Does my reemployment position include elements such as my 
seniority, status, and rate of pay?
1002.194 Can the application of the escalator principle result in 
adverse consequences when I am reemployed?
1002.195 What other factors can determine my reemployment position?
1002.196 What is my reemployment position if my period of service 
was less than 91 days?
1002.197 What is my reemployment position if my period of service in 
the uniformed services was more than 90 days?
1002.198 What efforts must my employer make to help me become 
qualified for the reemployment position?
1002.199 What priority must my employer follow if two or more 
returning employees are entitled to reemployment in the same 
position?

Seniority Rights and Benefits

1002.210 What seniority rights do I have when I am reemployed 
following a period of uniformed service?
1002.211 Does USERRA require my employer to use a seniority system?
1002.212 How do I know whether a particular right or benefit is a 
seniority-based right or benefit?
1002.213 How can I demonstrate a reasonable certainty that I would 
have received the seniority right or benefit if I had remained 
continuously employed during my period of service?
1002.214 What happens if my employer establishes, or eliminates 
seniority and seniority-based rights and benefits after I begin my 
period of service?

Disabled Employees

1002.225 Am I entitled to any specific reemployment benefits if I 
have a disability that was incurred in, or aggravated during, my 
period of service?
1002.226 If I have a disability incurred in, or aggravated during, 
my period of service what efforts must my employer make to qualify 
me for my reemployment position?

Rate of Pay

1002.236 How is my rate of pay determined when I return from a 
period of service?

Protection Against Discharge

1002.247 Does USERRA provide me with protection against discharge?
1002.248 What constitutes cause for discharge under USERRA?

Pension Plan Benefits

1002.259 How does USERRA protect my pension benefits?
1002.260 What pension benefit plans are covered under USERRA?
1002.261 Who is responsible for funding any plan obligation to 
provide me with pension benefits?
1002.262 When is my employer required to make the plan contribution 
that is attributable to my period of military service?
1002.263 Am I required to pay interest when I make up my missed 
contributions or elective deferrals?
1002.264 Am I allowed to repay my account balance if I withdrew all 
or part of my account from the pension benefits plan before becoming 
reemployed?
1002.265 If I am reemployed with my pre-service employer is my 
pension benefit the same as if I had remained continuously employed?
1002.266 What are the obligations of a multiemployer pension benefit 
plan under USERRA?
1002.267 How is my compensation during my period of service 
calculated in order to determine my pension benefits, if my benefits 
are based on my compensation rate?
Subpart F--Compliance Assistance, Enforcement and Remedies

Compliance Assistance

1002.277 What assistance does the Department of Labor provide to 
employees and employers concerning employment, reemployment, or 
other rights and benefits under USERRA?

Investigation and Referral

1002.288 How do I file my USERRA complaint?
1002.289 How will VETS investigate my USERRA complaint?
1002.290 Does VETS have the authority to order compliance with 
USERRA?
1002.291 What actions may I take if my complaint is not resolved by 
VETS?
1002.292 What can the Attorney General do about my complaint?

Enforcement of Rights and Benefits Against a State or Private Employer

1002.303 Am I required to file my complaint with VETS?
1002.304 If I file a complaint with VETS and VETS' efforts do not 
resolve my complaint can I pursue the claim on my own?
1002.305 What court has jurisdiction in an action against a State or 
private employer?
1002.306 As a National Guard civilian technician am I considered a 
State or Federal employee for purposes of USERRA?
1002.307 What is the proper venue in an action against a State or 
private employer?
1002.308 Who has legal standing to bring an action under USERRA?
1002.309 Who is a necessary party in an action under USERRA?
1002.310 How are fees and court costs charged or taxed in an action 
under USERRA?
1002.311 Is there a statute of limitations in an action under 
USERRA?
1002.312 What remedies may be awarded for a violation of USERRA?
1002.313 Are there special damages provisions that apply to actions 
initiated in the name of the United States?
1002.314 May a court use its equity powers in an action or 
proceeding under the Act?

    Authority: Pub. L. 103-353, 108 Stat. 3150, 38 U.S.C. 4331(a); 
Secretary's Order 3-2004, September 10, 2004.

Subpart A--Introduction to the Regulations Under the Uniformed 
Services Employment and Reemployment Rights Act of 1994

General Provisions




Sec.  1002.1  What is the purpose of the regulations in this part?

    The regulations in this part implement the Uniformed Services 
Employment and Reemployment Rights Act of 1994 (``USERRA'' or ``the 
Act''). 38 U.S.C. 4301-4333. USERRA is a law that establishes certain 
rights and benefits for employees, and duties for employers. USERRA 
affects employment, reemployment, and retention in employment, when 
employees serve or have served in the uniformed services. There are 
five subparts to this part. Subpart A gives an introduction to the 
USERRA regulations. Subpart B describes USERRA's anti-discrimination 
and anti-retaliation provisions. Subpart C explains the steps that must 
be taken by a uniformed service member who wants

[[Page 56286]]

to return to his or her previous civilian employment. Subpart D 
describes the rights, benefits, and obligations of persons absent from 
employment due to service in the uniformed services, including rights 
and obligations related to health plan coverage. Subpart E describes 
the rights, benefits, and obligations of the returning veteran or 
service member. Subpart F explains the role of the Department of Labor 
in enforcing and giving assistance under USERRA. The regulations in 
this part implement USERRA as it applies to States, local governments, 
and private employers. Separate regulations published by the Federal 
Office of Personnel Management implement USERRA for Federal executive 
agency employers and employees.


Sec.  1002.2  Is USERRA a new law?

    USERRA is the latest in a series of laws protecting veterans' 
employment and reemployment rights going back to the Selective Training 
and Service Act of 1940. USERRA's immediate predecessor was commonly 
referred to as the Veterans' Reemployment Rights Act (VRRA), which was 
enacted as section 404 of the Vietnam Era Veterans' Readjustment 
Assistance Act of 1974. In enacting USERRA, Congress emphasized 
USERRA's continuity with the VRRA and its intention to clarify and 
strengthen that law. Congress also emphasized that Federal laws 
protecting veterans' employment and reemployment rights for the past 
fifty years had been successful and that the large body of case law 
that had developed under those statutes remained in full force and 
effect, to the extent it is consistent with USERRA. USERRA authorized 
the Department of Labor to publish regulations implementing the Act for 
State, local government, and private employers. USERRA also authorized 
the Office of Personnel Management to issue regulations implementing 
the Act for Federal executive agencies (other than some Federal 
intelligence agencies). USERRA established a separate program for 
employees of some Federal intelligence agencies.


Sec.  1002.3  When did USERRA become effective?

    USERRA became law on October 13, 1994. USERRA's reemployment 
provisions apply to members of the uniformed services seeking civilian 
reemployment on or after December 12, 1994. USERRA's anti-
discrimination and anti-retaliation provisions became effective on 
October 13, 1994.


Sec.  1002.4  What is the role of the Secretary of Labor under USERRA?

    (a) USERRA charges the Secretary of Labor (through the Veterans' 
Employment and Training Service) with providing assistance to any 
person with respect to the employment and reemployment rights and 
benefits to which such person is entitled under the Act. More 
information about the Secretary's role in providing this assistance is 
contained in subpart F of this part.
    (b) USERRA also authorizes the Secretary of Labor to issue 
regulations implementing the Act with respect to States, local 
governments, and private employers. The regulations in this part are 
issued under this authority.
    (c) The Secretary of Labor delegated authority to the Assistant 
Secretary for Veterans' Employment and Training for administering the 
veterans' reemployment rights program by Secretary's Order 1-83 
(February 3, 1983) and for carrying out the functions and authority 
vested in the Secretary pursuant to USERRA by memorandum of April 22, 
2002 (67 FR 31827).


Sec.  1002.5  What definitions will help me understand USERRA?

    (a) Attorney General means the Attorney General of the United 
States or any person designated by the Attorney General to carry out a 
responsibility of the Attorney General under USERRA.
    (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.
    (c) Employee means any person employed by an employer. The term 
also includes any person who is a citizen, national or permanent 
resident alien of the United States who is employed in a workplace in a 
foreign country by an employer that is an entity incorporated or 
organized in the United States, or that is controlled by an entity 
organized in the United States. ``Employee'' includes the former 
employees of an employer.
    (d)(1) Employer, except as provided below in paragraphs (d)(2) and 
(3) of this section, means any person, institution, organization, or 
other entity that pays salary or wages for work performed, or that has 
control over employment opportunities, including--
    (i) A person, institution, organization, or other entity to whom 
the employer has delegated the performance of employment-related 
responsibilities;
    (ii) The Federal Government;
    (iii) A State;
    (iv) Any successor in interest to a person, institution, 
organization, or other entity referred to in this definition; and,
    (v) A person, institution, organization, or other entity that has 
denied initial employment in violation of 38 U.S.C. 4311, USERRA's 
anti-discrimination and anti-retaliation provisions.
    (2) In the case of a National Guard technician employed under 32 
U.S.C. 709, the term ``employer'' means the adjutant general of the 
State in which the technician is employed.
    (3) An employee pension benefit plan as described in section 3(2) 
of the Employee Retirement Income Security Act of 1974 (ERISA)(29 
U.S.C. 1002(2)) is considered an employer for an individual that it 
does not actually employ only with respect to the obligation to provide 
pension benefits.
    (e) Health plan means an insurance policy, insurance contract, 
medical or hospital service agreement, membership or subscription 
contract, or other arrangement under which health services for 
individuals are provided or the expenses of such services are paid.
    (f) Notice, when the employee is required to give advance notice of 
service, means any written or verbal notification of an obligation or 
intention to perform service in the uniformed services provided to an 
employer by the employee who will perform such service, or by the 
uniformed service in which the service is to be performed.
    (g) Qualified, with respect to an employment position, means having 
the ability to perform the essential tasks of the position.
    (h) Reasonable efforts, in the case of actions required of an 
employer, means actions, including training provided by an employer 
that do not place an undue hardship on the employer.
    (i) Secretary means the Secretary of Labor or any person designated 
by the Secretary of Labor to carry out an activity under USERRA and the 
regulations in this part, unless a different office is expressly 
indicated in the regulation.
    (j) Seniority means longevity in employment together with any 
benefits of employment that accrue with, or are determined by, 
longevity in employment.

[[Page 56287]]

    (k) Service in the uniformed services means the performance of duty 
on a voluntary or involuntary basis in a uniformed service under 
competent authority. Service in the uniformed services includes active 
duty, active and inactive duty for training, National Guard duty under 
Federal statute, and a period for which a person is absent from a 
position of employment for an examination to determine the fitness of 
the person to perform such duty. The term also includes a period for 
which a person is absent from employment to perform funeral honors duty 
as authorized by law (10 U.S.C. 12503 or 32 U.S.C. 115). The Public 
Health Security and Bioterrorism Preparedness and Response Act of 2002, 
Pub. L. 107-188, provides that service as an intermittent disaster-
response appointee upon activation of the National Disaster Medical 
System or as a participant in an authorized training program is deemed 
``service in the uniformed services.'' 42 U.S.C. 300hh-11(e)(3).
    (l) State means each of the several States of the United States, 
the District of Columbia, the Commonwealth of Puerto Rico, Guam, the 
Virgin Islands, and other territories of the United States (including 
the agencies and political subdivisions thereof); however, for purposes 
of enforcement of rights under 38 U.S.C. 4323, a political subdivision 
of a State is a private employer.
    (m) Undue hardship, in the case of actions taken by an employer, 
means an action requiring significant difficulty or expense, when 
considered in light of --
    (1) The nature and cost of the action needed under USERRA and the 
regulations in this part;
    (2) The overall financial resources of the facility or facilities 
involved in the provision of the action; the number of persons employed 
at such facility; the effect on expenses and resources, or the impact 
otherwise of such action upon the operation of the facility;
    (3) The overall financial resources of the employer; the overall 
size of the business of an employer with respect to the number of its 
employees; the number, type, and location of its facilities; and,
    (4) The type of operation or operations of the employer, including 
the composition, structure, and functions of the work force of such 
employer; the geographic separateness, administrative, or fiscal 
relationship of the facility or facilities in question to the employer.
    (n) Uniformed services means the Armed Forces; the Army National 
Guard and the Air National Guard when engaged in active duty for 
training, inactive duty training, or full-time National Guard duty; the 
commissioned corps of the Public Health Service; and any other category 
of persons designated by the President in time of war or national 
emergency.


Sec.  1002.6  What types of service in the uniformed services are 
covered by USERRA?

    USERRA's definition of ``service in the uniformed services'' covers 
all categories of military training and service, including duty 
performed on a voluntary or involuntary basis, in time of peace or war. 
Although most often understood as applying to National Guard and 
reserve military personnel, USERRA also applies to persons serving in 
the active components of the Armed Forces. However, USERRA's 
reemployment provisions vary according to the length of service in the 
uniformed services.


Sec.  1002.7  How does USERRA relate to other laws, public and private 
contracts, and employer practices?

    (a) USERRA establishes a floor, not a ceiling, for the employment 
and reemployment rights and benefits of those it protects. In other 
words, an employer may provide greater rights and benefits than USERRA 
requires, but no employer can refuse to provide any right or benefit 
guaranteed by USERRA.
    (b) USERRA supersedes any State law (including any local law or 
ordinance), contract, agreement, policy, plan, practice, or other 
matter that reduces, limits, or eliminates in any manner any right or 
benefit provided by USERRA, including the establishment of additional 
prerequisites to the exercise of any USERRA right or the receipt of any 
USERRA benefit. For example, an employment contract that determines 
seniority based only on actual days of work in the place of employment 
would be superseded by USERRA, which requires that seniority credit be 
given for periods of absence from work due to service in the uniformed 
services.
    (c) USERRA does not supersede, nullify or diminish any Federal or 
State law (including any local law or ordinance), contract, agreement, 
policy, plan, practice, or other matter that establishes an employment 
right or benefit that is more beneficial than, or is in addition to, a 
right or benefit provided under the Act. For example, although USERRA 
does not require an employer to pay an employee for time away from work 
performing service, an employer policy, plan, or practice that provides 
such a benefit is permissible under USERRA.
    (d) If an employer provides a benefit that exceeds USERRA's 
requirements in one area, it cannot reduce or limit other rights or 
benefits provided by USERRA. For example, even though USERRA does not 
require it, an employer may provide a fixed number of days of paid 
military leave per year to employees who are members of the National 
Guard or Reserve. The fact that it provides such a benefit, however, 
does not permit an employer to refuse to provide an unpaid leave of 
absence to an employee to perform service in the uniformed services in 
excess of the number of days of paid military leave.

Subpart B--Anti-Discrimination and Anti-Retaliation

Protection From Employer Discrimination and Retaliation


Sec.  1002.18  What activity is protected from employer discrimination 
by USERRA?

    An employer must not deny initial employment, reemployment, 
retention in employment, promotion, or any benefit of employment to you 
on the basis of your membership, application for membership, 
performance of service, application for service, or obligation for 
service in the uniformed services.


Sec.  1002.19  Is any other activity protected under USERRA?

    An employer must not retaliate against you by taking any adverse 
employment action against you because you have taken an action to 
enforce a protection afforded any person under USERRA; testified or 
otherwise made a statement in or in connection with a proceeding under 
USERRA; assisted or participated in a USERRA investigation: or, 
exercised a right provided for by USERRA.


Sec.  1002.20  Does USERRA protect me if I do not actually perform 
service in the uniformed service?

    Yes. Employers are prohibited from taking actions against you for 
any of the activities protected by the Act, whether or not you have 
performed service in the uniformed services.


Sec.  1002.21  Do the Act's prohibitions against discrimination and 
retaliation apply to all employment positions?

    The prohibitions against discrimination and retaliation apply to 
all covered employers (including hiring halls and potential employers, 
see Sec. Sec.  1002.36 and 1002.38) and employment positions, including 
those that are for a brief, non-recurrent period, and for which there 
is no reasonable expectation that the employment position will continue 
indefinitely or for a significant period. However, USERRA's 
reemployment rights and

[[Page 56288]]

benefits do not apply to such brief, nonrecurrent positions of 
employment.


Sec.  1002.22  Who has the burden of proving discrimination or 
retaliation in violation of USERRA?

    You have the burden of proving that activity protected by USERRA 
was one of the reasons that your employer took action against you, in 
order to establish that the action was discrimination or retaliation in 
violation of USERRA. If you succeed in proving this point, your 
employer can prevail by proving that he or she would have taken the 
action anyway, unless you can prove that but for your service the 
employer would not have taken the action.


Sec.  1002.23  What do I have to show to carry my burden of proving 
that my employer discriminated or retaliated against me?

    (a) In order to prove that your employer discriminated or 
retaliated against you, first you must show that the employer's action 
against you was motivated by either:
    (1) Membership or application for membership in a uniformed 
service;
    (2) Performance of service, application for service, or obligation 
for service in a uniformed service;
    (3) Action taken to enforce a protection afforded any person under 
USERRA;
    (4) Testimony or statement made in or in connection with a USERRA 
proceeding;
    (5) Assistance or participation in a USERRA investigation; or,
    (6) Exercise of a right provided for by USERRA.
    (b) If you prove that the employer's action against you was based 
on one of the prohibited motives listed in paragraph (a) of this 
section, your employer may prevail by showing that the action would 
have been taken anyway. In that event, you can prevail only if you can 
show that the employer would not have taken the action against you but 
for your protected activity.

Subpart C--Eligibility for Reemployment

General Eligibility Requirements for Reemployment


Sec.  1002.32  What criteria must I meet to be eligible under USERRA 
for reemployment after my service in the uniformed services?

    (a) In general, if you have been absent from a position of civilian 
employment by reason of service in the uniformed services, you will be 
eligible for reemployment under USERRA if you meet the following 
criteria:
    (1) Your employer had advance notice of your service;
    (2) You have five years or less of cumulative service with respect 
to your position of employment;
    (3) You timely return to work or apply for reemployment; and,
    (4) You have not been separated from service with a disqualifying 
discharge or under other than honorable conditions.
    (b) These general eligibility requirements have important 
qualifications and exceptions, which are described in detail in 
Sec. Sec.  1002.73 through 1002.138. If you meet these eligibility 
criteria, then you are eligible for reemployment, unless your employer 
can establish that one of the defenses described in Sec.  1002.139 
apply. The reemployment position that you are entitled to if you meet 
USERRA's eligibility criteria is described in Sec. Sec.  1002.191 
through 1002.199.


Sec.  1002.33  To be eligible for reemployment, do I have to show that 
my employer discriminated against me?

    No. To be eligible for reemployment it is not necessary for you to 
establish that your employer discriminated against you because of your 
military service.

Coverage of Employers and Positions


Sec.  1002.34  Which employers are covered by USERRA?

    (a) USERRA applies to all public and private employers in the 
United States, regardless of size. For example, an employer with only 
one employee is covered for purposes of the Act.
    (b) USERRA applies to foreign employers doing business in the 
United States. A foreign employer that has a physical location or 
branch in the United States (including U.S. territories and 
possessions) must comply with USERRA for any of its employees who are 
employed in the United States.
    (c) An American company operating either directly or through an 
entity under its control in a foreign country must also comply with 
USERRA for all its foreign operations, unless compliance would violate 
the law of the foreign country in which the workplace is located.


Sec.  1002.35  Is a successor in interest an employer covered by 
USERRA?

    USERRA's definition of ``employer'' includes a successor in 
interest. In general, an employer is a successor in interest where 
there is a substantial continuity in operations, facilities, and 
workforce from the former employer. The determination whether an 
employer is a successor in interest must be made on a case-by-case 
basis using a multi-factor test that considers the following:
    (a) Whether there has been a substantial continuity of business 
operations from the former to the current employer;
    (b) Whether the current employer uses the same or similar 
facilities, machinery, equipment, and methods of production;
    (c) Whether there has been a substantial continuity of employees;
    (d) Whether there is a similarity of jobs and working conditions;
    (e) Whether there is a similarity of supervisors or managers; and,
    (f) Whether there is a similarity of products or services.


Sec.  1002.36  Can an employer be liable as a successor in interest if 
it was unaware of my potential reemployment claim when it acquired the 
business?

    Yes. In order to be a successor in interest, it is not necessary 
for an employer to have notice of a potential reemployment claim at the 
time of merger, acquisition, or other form of succession.


Sec.  1002.37  Is it possible for me to be employed in one job by more 
than one employer?

    Yes. Under USERRA, an employer includes not only the person or 
entity that pays your salary or wages, but also includes a person or 
entity that has control over your employment opportunities, including a 
person or entity to whom an employer has delegated the performance of 
employment-related responsibilities. For example, if you are a security 
guard hired by a security company and you are assigned to a work site, 
you may report both to the security company and to the site owner. In 
such an instance, both employers share responsibility for compliance 
with USERRA. If the security company declines to assign you to a job 
because of a uniformed service obligation (for example, your National 
Guard duties), then the security company could be in violation of the 
reemployment requirements and the anti-discrimination provisions of 
USERRA. Similarly, if the employer at the work site causes your removal 
from the job position because of your uniformed service obligations, 
then the work site employer could be in violation of the reemployment 
requirements and the anti-discrimination provisions of USERRA.


Sec.  1002.38  Can a hiring hall be my employer?

    Yes. If you are a longshoreman, stagehand, construction worker, or 
you work in certain other industries, you may frequently work for many 
different employers. A hiring hall operated by a union or an employer 
association typically assigns you to your jobs. In

[[Page 56289]]

these industries, it may not be unusual for you to work your entire 
career in a series of short-term job assignments. The definition of 
``employer'' includes a person, institution, organization, or other 
entity to which the employer has delegated the performance of 
employment-related responsibilities. A hiring hall therefore is 
considered your employer if the hiring and job assignment functions 
have been delegated by an employer to the hiring hall. As your 
employer, a hiring hall has reemployment responsibilities to you. 
USERRA's anti-discrimination and anti-retaliation provisions also apply 
to the hiring hall.


Sec.  1002.39  Are States (and their political subdivisions), the 
District of Columbia, the Commonwealth of Puerto Rico, and United 
States territories, considered employers?

    Yes. States and their political subdivisions, such as counties, 
parishes, cities, towns, villages, and school districts, are considered 
employers under USERRA. The District of Columbia, the Commonwealth of 
Puerto Rico, Guam, the Virgin Islands, and territories of the United 
States, are also considered employers under the Act.


Sec.  1002.40  Does USERRA protect against discrimination in initial 
hiring decisions?

    Yes. The Act's definition of employer includes a person, 
institution, organization, or other entity that has denied you initial 
employment in violation of USERRA's anti-discrimination provisions. An 
employer need not actually employ you to be your ``employer'' under the 
Act, if it has denied you initial employment on the basis of your 
membership, application for membership, performance of service, 
application for service, or obligation for service in the uniformed 
services. Similarly, the employer would be liable if it denied you 
initial employment on the basis of your action taken to enforce a 
protection afforded to any person under USERRA, your testimony or 
statement in connection with any USERRA proceeding, your assistance or 
other participation in a USERRA investigation, or your exercise of any 
other right provided by the Act. For example, if you have been denied 
initial employment because of your obligations as a member of the 
National Guard or Reserves, the company or entity denying you 
employment is an employer for purposes of USERRA. Similarly, if an 
entity withdraws an offer of employment to you because you are called 
upon to fulfill an obligation in the uniformed services, the entity 
withdrawing your offer of employment is an employer for purposes of 
USERRA.


Sec.  1002.41  Can I have rights under USERRA even though I hold a 
temporary, part-time, probationary, or seasonal employment position?

    Your rights under USERRA are not diminished because you hold a 
temporary, part-time, probationary, or seasonal employment position. 
However, an employer is not required to reemploy you if the employment 
you left to serve in the uniformed services was for a brief, non-
recurrent period and there is no reasonable expectation that your 
employment would have continued indefinitely or for a significant 
period. The employer bears the burden of proving this affirmative 
defense.


Sec.  1002.42  What rights do I have under USERRA if I am on layoff, on 
strike, or on a leave of absence?

    (a) If you are laid off with recall rights, on strike, or on a 
leave of absence, you are an employee for purposes of USERRA. If you 
are on layoff and begin service in the uniformed services, or you are 
laid off while performing service, you may be entitled to reemployment 
on return if the employer would have recalled you to employment during 
the period of service. Similar principles apply if you are on strike or 
on a leave of absence from work when you begin a period of service in 
the uniformed services.
    (b) If you are sent a recall notice during your period of service 
in the uniformed services and you cannot resume the position of 
employment because of the service, you still remain an employee for 
purposes of the Act. Therefore, if you are otherwise eligible, you are 
entitled to reemployment following the conclusion of your period of 
service even if you did not respond to the recall notice.
    (c) If you are laid off before or during your service in the 
uniformed services, and your employer would not have recalled you 
during your period of service, you are not entitled to reemployment 
following your period of service simply because you are a covered 
employee. Your reemployment rights under USERRA cannot put you in a 
better position than if you had remained in your civilian employment 
position.


Sec.  1002.43  Can I have rights under USERRA even if I am an 
executive, managerial, or professional employee?

    Yes. USERRA applies to all employees. There is no exclusion for 
executive, managerial, or professional employees.


Sec.  1002.44  Does USERRA cover me if I am an independent contractor?

    (a) No. USERRA does not provide protections for you if you are an 
independent contractor.
    (b) In deciding whether you are an independent contractor, the 
following factors need to be considered:
    (1) The extent of the employer's right to control the manner in 
which your work is to be performed;
    (2) Your opportunity for profit or loss that depends upon your 
managerial skill;
    (3) Your investment in equipment or materials required for your 
tasks, or your employment of helpers;
    (4) Whether the service you render requires a special skill;
    (5) The degree of permanence of your working relationship; and,
    (6) Whether the service you render is an integral part of the 
employer's business.
    (c) No single one of these factors is controlling, but all are 
relevant to the determination whether you are an employee or an 
independent contractor.

Coverage of Service in the Uniformed Services


Sec.  1002.54  Are all military fitness examinations considered 
``service in the uniformed services?''

    Yes. USERRA's definition of ``service in the uniformed services'' 
includes a period for which you are absent from a position of 
employment for the purpose of an examination to determine your fitness 
to perform duty in the uniformed services. Military fitness 
examinations can address more than physical or medical fitness, and 
include evaluations for mental, educational, and other types of 
fitness. Any examination to determine your fitness for service is 
covered, whether it is an initial or recurring examination. For 
example, a periodic medical examination required of a Reserve component 
member to determine fitness for continued service is covered.


Sec.  1002.55  Is all funeral honors duty considered ``service in the 
uniformed services?''

    (a) USERRA's definition of ``service in the uniformed services'' 
includes a period for which you are absent from employment for the 
purpose of performing authorized funeral honors duty under 10 U.S.C. 
12503 (members of Reserve ordered to perform funeral honors duty) or 32 
U.S.C. 115 (Member of Air or Army National Guard ordered to perform 
funeral honors duty).
    (b) Funeral honors duty performed by persons who are not members of 
the uniformed services, such as members of

[[Page 56290]]

veterans' service organizations, is not ``service in the uniformed 
services.''


Sec.  1002.56  I am participating in a training program to provide 
emergency assistance in the event of a terrorist attack. Is that 
considered ``service in the uniformed services?''

    Under a provision of the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002, 42 U.S.C. 300hh 11(e)(3), 
``service in the uniformed services'' includes service you perform as 
an intermittent disaster-response appointee upon activation of the 
National Disaster Medical System or when you participate in an 
authorized training program, even if you are not a member of the 
uniformed services.


Sec.  1002.57  Is all of my service as a member of the National Guard 
considered ``service in the uniformed services?''

    The National Guard has a dual status. It is a Reserve component of 
the Army, or, in the case of the Air National Guard, of the Air Force. 
Simultaneously, it is a State military force subject to call-up by the 
State Governor for duty not subject to Federal control, such as 
emergency duty in cases of floods or riots. National Guard members may 
perform service under either Federal or State authority, but only your 
Federal National Guard service is covered by USERRA.
    (a) Your National Guard service under Federal authority is 
protected by USERRA. Service under Federal authority includes active 
duty you perform under Title 10 of the United States Code. Service 
under Federal authority also includes duty under Title 32 of the United 
States Code, such as active duty for training, inactive duty training, 
or full-time National Guard duty.
    (b) Your National Guard service under authority of State law is not 
protected by USERRA. However, many States have laws protecting the 
civilian job rights of National Guard members who serve under State 
orders. Enforcement of those State laws is not covered by USERRA or the 
regulations in this part.


Sec.  1002.58  Is my service in the commissioned corps of the Public 
Health Service considered ``service in the uniformed services?''

    Yes. Your service in the commissioned corps of the Public Health 
Service (PHS) is ``service in the uniformed services'' under USERRA.


Sec.  1002.59  Are there any circumstances in which special categories 
of persons are considered to perform ``service in the uniformed 
services?''

    Yes. In time of war or national emergency the President has 
authority to designate any category of persons as a ``uniformed 
service'' for purposes of USERRA. If the President exercises this 
authority, your service as a member of that category of persons would 
be ``service in the uniformed services'' under USERRA.


Sec.  1002.60  If I am a cadet or midshipman attending a service 
academy am I covered by USERRA?

    Yes. Your service as a cadet or midshipman at a service academy is 
considered uniformed service for purposes of USERRA. There are four 
service academies: The United States Military Academy (West Point, New 
York), the United States Naval Academy (Annapolis, Maryland), the 
United States Air Force Academy (Colorado Springs, Colorado), and the 
United States Coast Guard Academy (New London, Connecticut).


Sec.  1002.61  If I am a member of the Reserve Officers Training Corps 
am I covered by USERRA?

    No. Your membership in the Reserve Officers Training Corps (ROTC) 
or the Junior ROTC is not ``service in the uniformed services.'' 
However, many Reserve and National Guard units use a college ROTC 
program as a means of qualifying enlisted personnel for commissioned 
officer status. In these cases, if you participate in ROTC training 
sessions as a member of a Reserve or National Guard unit performing 
active or inactive duty training, that training is considered ``service 
in the uniformed services.''


Sec.  1002.62  If I am a member of the Commissioned Corps of the 
National Oceanic and Atmospheric Administration, the Civil Air Patrol, 
or the Coast Guard Auxiliary am I covered by USERRA?

    No. Although the Commissioned Corps of the National Oceanic and 
Atmospheric Administration (NOAA) is a ``uniformed service'' for some 
purposes, it is not included in USERRA's definition of this term. 
Service in the Civil Air Patrol and the Coast Guard Auxiliary similarly 
is not considered ``service in the uniformed services'' for purposes of 
USERRA. Consequently, service performed in the Commissioned Corps of 
the National Oceanic and Atmospheric Administration (NOAA), the Civil 
Air Patrol, and the Coast Guard Auxiliary is not protected by USERRA.

Absence From a Position of Employment Necessitated by Reason of Service 
in the Uniformed Services


Sec.  1002.73  Does service in the uniformed services have to be my 
sole reason for leaving my employment position in order to have USERRA 
reemployment rights?

    No. If your absence from a position of employment is necessitated 
by your service in the uniformed services, and you otherwise meet the 
Act's eligibility requirements, you have reemployment rights under 
USERRA, even if you use your absence for other purposes as well. You 
are not required to leave the employment position for the sole purpose 
of performing service in the uniformed services. For example, if you 
are required to report to an out of State location for military 
training and spend your off-duty time during that assignment 
moonlighting as a security guard or visiting relatives who live in that 
State, you will not lose your reemployment rights simply because you 
used some of the time you were required to be absent from your job to 
do something other than attend the military training. Also, if you 
receive advance notification of a mobilization order, and leave your 
employment position in order to prepare for duty, but the mobilization 
is cancelled, you will not lose your reemployment rights.


Sec.  1002.74  Am I required to begin service in the uniformed services 
immediately after leaving my employment position in order to have 
USERRA reemployment rights?

    No. At a minimum, you must have enough time after leaving your 
employment position to travel safely to the site where your service in 
the uniformed services is to be performed, and arrive fit to perform 
the service. Depending on the specific circumstances, additional time 
to rest, or to arrange your affairs and report to duty may be 
necessitated by reason of service in the uniformed services. The 
following examples help to explain the issue of the period of time 
between leaving civilian employment and the beginning of service in the 
uniformed services:
    (a) If you perform a full overnight shift for your civilian 
employer and travel directly from the work site to perform a full day 
of military service, you would not be considered fit to perform the 
military service. An absence from that work shift is necessitated so 
that you can report for military service fit for duty.
    (b) If you are ordered to perform an extended period of service in 
the uniformed services, you will require a reasonable period of time 
off from your civilian job to put your personal affairs

[[Page 56291]]

in order, before beginning the service. Taking such time off is also 
necessitated by the military service.
    (c) If you leave a position of employment in order to enlist or 
otherwise perform service in the uniformed services and, through no 
fault of your own, the beginning date of the service is delayed, this 
delay does not terminate your reemployment rights.

Requirement of Notice


Sec.  1002.85  Am I required to give advance notice to my employer of 
my service in the uniformed services?

    (a) Yes. You, or an appropriate officer of the uniformed service in 
which your service is to be performed, must notify your employer that 
you intend to leave your employment position to perform service in the 
uniformed services, with certain exceptions described below.
    (b) The Department of Defense USERRA regulations at 32 CFR 104.3 
provide that an ``appropriate officer'' can give notice on your behalf. 
An ``appropriate officer'' is a commissioned, warrant, or non-
commissioned officer authorized to give such notice by the military 
service concerned.
    (c) Your notice to your employer may be either verbal or written. 
The notice may be informal and does not need to follow any particular 
format. Although USERRA does not specify how far in advance your notice 
must be given, you should provide the notice as far in advance as is 
reasonable under the circumstances.


Sec.  1002.86  When am I excused from giving advance notice of my 
service in the uniformed services?

    You are required to give advance notice of pending service unless 
giving such notice is prevented by military necessity, or is otherwise 
impossible or unreasonable under all the circumstances.
    (a) Only a designated military authority can make a determination 
of ``military necessity,'' and such a determination is not subject to 
judicial review. Guidelines for defining ``military necessity'' appear 
in regulations issued by the Department of Defense at 32 CFR 104.3. In 
general, these regulations cover situations where a mission, operation, 
exercise or requirement is classified, or could be compromised or 
otherwise adversely affected by public knowledge.
    (b) It may be impossible or unreasonable for you to give advance 
notice under certain circumstances. Such circumstances may include the 
unavailability of your employer or the employer's representative, or a 
requirement that you report for military service in an extremely short 
period of time.


Sec.  1002.87  Am I required to get permission from my employer before 
I leave to perform service in the uniformed services?

    No. You are not required to ask for or get your employer's 
permission to leave to perform service in the uniformed services. You 
are only required to give your employer notice of pending service.


Sec.  1002.88  Am I required to tell my civilian employer that I intend 
to seek reemployment after completing my military service before I 
leave to perform service in the uniformed services?

    No. When you leave your employment position to begin a period of 
service you are not required to tell your civilian employer that you 
intend to seek reemployment after completing your military service. 
Even if you tell your employer that you do not intend to seek 
reemployment after completing the military service, you do not forfeit 
your right to reemployment. You are not required to decide in advance 
of leaving your civilian employment position whether you will seek 
reemployment after completing military service.

Period of Service


Sec.  1002.99  Is there a limit on the total amount of service in the 
uniformed services that I may perform and still retain reemployment 
rights with my employer?

    Yes. In general, you may perform service in the uniformed services 
for a cumulative period of up to five (5) years and retain reemployment 
rights with your employer. The exceptions to this rule are described 
below.


Sec.  1002.100  Does the five-year service limit include all absences 
from my employment position that are related to my service in the 
uniformed services?

    No. The five-year period includes only the time you spend actually 
performing service in the uniformed services. A period of absence from 
employment before or after your performance of service in the uniformed 
services does not count against the five-year limit. For example, after 
you complete a period of service in the uniformed services, you are 
provided a certain amount of time, depending upon your length of 
service, to report back to work or submit an application for 
reemployment. The period between the completion of the period of 
service and the time you have to report back to work or seek 
reemployment does not count against the five-year limit.


Sec.  1002.101  Does the five-year service limit include periods of 
service that I performed when I worked for a previous employer?

    No. You are entitled to a leave of absence for uniformed service 
for up to five years with each employer for whom you work. When you 
take a position with a new employer, the five-year period begins again 
regardless of how much service you performed while you worked in any 
previous employment relationship.


Sec.  1002.102  Does the five-year service limit include periods of 
service that I performed before USERRA was enacted?

    Yes. USERRA provides reemployment rights to which you may become 
entitled beginning on or after December 12, 1994, but any uniformed 
service that you performed before December 12, 1994, that was counted 
against the service limitations of the previous law (the Veterans 
Reemployment Rights Act), also counts against USERRA's five-year limit.


Sec.  1002.103  Are there any types of service in the uniformed 
services that I can perform that do not count against USERRA's five-
year service limit?

    (a) USERRA creates the following exceptions to the five-year limit 
on service in the uniformed services:
    (1) Service that is required beyond five years to complete your 
initial period of obligated service. Some military specialties require 
you to serve more than five years because of the amount of time or 
expense involved in training. If you work in one of those specialties 
you have reemployment rights when your initial period of obligated 
service is completed;
    (2) If you were unable to obtain orders releasing you from service 
in the uniformed services before the expiration of the five-year 
period, and the inability was not your fault;
    (3)(i) Service that you performed to fulfill periodic National 
Guard and Reserve training requirements as prescribed by 10 U.S.C. 
10147 and 32 U.S.C. 502(a) and 503; and,
    (ii) Service that you performed to fulfill additional training 
requirements determined and certified by a proper military authority as 
necessary for your professional development, or to complete your skill 
training or retraining;
    (4) Service that you performed in a uniformed service if you were 
ordered to or retained on active duty under:
    (i) 10 U.S.C. 688 (involuntary active duty by a military retiree);
    (ii) 10 U.S.C. 12301(a) (involuntary active duty in wartime);
    (iii) 10 U.S.C. 12301(g) (retention on active duty while in captive 
status);

[[Page 56292]]

    (iv) 10 U.S.C. 12302 (involuntary active duty during a national 
emergency for up to 24 months);
    (v) 10 U.S.C. 12304 (involuntary active duty for an operational 
mission for up to 270 days);
    (vi) 10 U.S.C. 12305 (involuntary retention on active duty of a 
critical person during time of crisis or other specific conditions);
    (vii) 14 U.S.C. 331 (involuntary active duty by retired Coast Guard 
officer);
    (viii) 14 U.S.C. 332 (voluntary active duty by retired Coast Guard 
officer);
    (ix) 14 U.S.C. 359 (involuntary active duty by retired Coast Guard 
enlisted member);
    (x) 14 U.S.C. 360 (voluntary active duty by retired Coast Guard 
enlisted member);
    (xi) 14 U.S.C. 367 (involuntary retention of Coast Guard enlisted 
member on active duty); and
    (xii) 14 U.S.C. 712 (involuntary active duty by Coast Guard Reserve 
member for natural or man-made disasters).
    (5) Service that you performed in a uniformed service if you were 
ordered to or retained on active duty (other than for training) under 
any provision of law because of a war or national emergency declared by 
the President or the Congress, as determined by a proper military 
authority;
    (6) Service that you performed in a uniformed service if you were 
ordered to active duty (other than for training) in support of an 
operational mission for which personnel have been ordered to active 
duty under 10 U.S.C. 12304, as determined by a proper military 
authority;
    (7) Service that you performed in a uniformed service if you were 
ordered to active duty in support of a critical mission or requirement 
of the uniformed services as determined by a proper military authority; 
and,
    (8) Service that you performed as a member of the National Guard if 
you were called to respond to an invasion, danger of invasion, 
rebellion, danger of rebellion, insurrection, or the inability of the 
President with regular forces to execute the laws of the United States.
    (b) Service that you performed to mitigate economic harm where your 
employer is in violation of its employment or reemployment obligations 
to you.


Sec.  1002.104  Am I required to accommodate my employer's needs as to 
the timing, frequency or duration of my service?

    No. You are not required to accommodate your employer's interests 
or concerns regarding the timing, frequency, or duration of your 
uniformed service. Your employer cannot refuse to reemploy you because 
it believes that the timing, frequency or duration of your service is 
unreasonable. However, your employer is permitted to bring its concerns 
over the timing, frequency, or duration of your service to the 
attention of the appropriate military authority. Regulations issued by 
the Department of Defense at 32 CFR 104.4 direct military authorities 
to provide assistance to your employer in addressing these types of 
employment issues. The military authorities are required to consider 
requests from employers of National Guard and Reserve members to adjust 
your scheduled absence from civilian employment to perform service.

Application for Reemployment


Sec.  1002.115  Am I required to report to or submit a timely 
application for reemployment to my pre-service employer when I complete 
my period of service in the uniformed services?

    Yes. When you complete your service in the uniformed services, you 
must notify your pre-service employer of your intent to return to your 
employment position by either reporting to work or submitting a timely 
application for reemployment. Whether you are required to report to 
work or submit a timely application for reemployment depends upon the 
length of your service, as follows:
    (a) Period of service less than 31 days or for a period of any 
length for the purpose of a fitness examination. If your period of 
service in the uniformed services was less than 31 days, or you were 
absent from a position of employment for a period of any length for the 
purpose of an examination to determine your fitness to perform service, 
you must report back to your employer not later than the beginning of 
the first full regularly-scheduled work period on the first full 
calendar day following the completion of the period of service, and the 
expiration of eight hours after a period allowing for your safe 
transportation from the place of that service to your residence. For 
example, if you complete a period of service and travel home, arriving 
at ten o'clock in the evening, you cannot be required to report to your 
employer until the beginning of the next full regularly-scheduled work 
period that begins at least eight hours after you safely arrive home, 
i.e., no earlier than six o'clock the next morning. If it is impossible 
or unreasonable for you to report within the above time period through 
no fault of your own, you must report to your employer as soon as 
possible after the expiration of the eight-hour period.
    (b) Period of service more than 30 days but less than 181 days. If 
your period of service in the uniformed services was for more than 30 
days but less than 181 days you must submit an application for 
reemployment (written or verbal) with your employer not later than 14 
days after the completion of your service. If it is impossible or 
unreasonable for you to apply within 14 days through no fault of your 
own, you must submit the application not later than the next full 
calendar day after it becomes possible to do so.
    (c) Period of service more than 180 days. If your period of service 
in the uniformed services was for more than 180 days you must submit an 
application for reemployment (written or verbal) with your employer not 
later than 90 days after the completion of your service.


Sec.  1002.116  Is my time period for reporting back to my employer 
extended if I am hospitalized for, or convalescing from, an illness or 
injury incurred in, or aggravated during, the performance of service?

    Yes. If you are hospitalized for, or convalescing from, an illness 
or injury incurred in, or aggravated during, your performance of 
service, you must report to or submit an application for reemployment 
to your employer at the end of the period necessary for you to recover 
from the illness or injury. This period may not exceed two years from 
the date of the completion of your service, except that it must be 
extended by the minimum time necessary to accommodate circumstances 
beyond your control that make reporting within the period impossible or 
unreasonable.


Sec.  1002.117  Are there any consequences if I fail to report for or 
submit a timely application for reemployment?

    (a) If you fail to timely report for or apply for reemployment you 
do not automatically forfeit your entitlement to USERRA's reemployment 
and other rights and benefits. Rather, you become subject to the 
conduct rules, established policy, and general practices of your 
employer pertaining to your absence from scheduled work.
    (b) If reporting or submitting an employment application to your 
employer is impossible or unreasonable through no fault of your own, 
you may report to your employer as soon as possible (in the case of a 
period of service less than 31 days) or submit an application for 
reemployment to your employer by the next full calendar day after it 
becomes possible to do so (in the case of a period of service from 31 
to 180 days), and you will be considered to have timely reported or 
applied for reemployment.

[[Page 56293]]

Sec.  1002.118  Is my application for reemployment required to be in 
any particular form?

    Your application for reemployment need not follow any particular 
format. You may apply orally or in writing. Your application should 
indicate that you are a former employee returning from service in the 
uniformed services and that you seek reemployment with your pre-service 
employer. You are permitted but not required to identify a particular 
reemployment position in which you are interested.


Sec.  1002.119  To whom must I submit my application for reemployment?

    Your application must be submitted to your pre-service employer or 
to an agent or representative of your employer who has apparent 
responsibility for receiving employment applications. Depending upon 
the circumstances, such a person could be a personnel or human 
resources officer, or a first-line supervisor. If there has been a 
change in ownership of your employer, your application should be 
submitted to the employer's successor-in-interest.


Sec.  1002.120  If I seek or obtain employment with an employer other 
than my pre-service employer before the end of the period within which 
my reemployment application must be filed, will that jeopardize my 
reemployment rights with my pre-service employer?

    No, you have reemployment rights with your pre-service employer 
provided that you make a timely reemployment application to that 
employer. You may seek or obtain employment with an employer other than 
your pre-service employer during the period of time within which your 
reemployment application must be made, without giving up your 
reemployment rights with your pre-service employer.


Sec.  1002.121  Am I required to submit documentation to my employer in 
connection with my application for reemployment?

    Yes, if the period of service exceeded 30 days. If you submit an 
application for reemployment after a period of service of more than 30 
days you must, upon the request of your employer, provide documentation 
to establish that:
    (a) Your reemployment application is timely;
    (b) You have not exceeded the five-year limit on the duration of 
service (subject to the exceptions listed at Sec.  1002.103); and,
    (c) Your separation or dismissal from service was not 
disqualifying.


Sec.  1002.122  Is my employer required to reemploy me if documentation 
establishing my eligibility does not exist or is not readily available?

    Yes. Your employer is not permitted to delay or deny your 
reemployment by demanding documentation that does not exist or is not 
readily available. You are not liable for administrative delays in the 
issuance of military documentation. If you are reemployed after an 
absence from employment for more than 90 days your employer may require 
that you submit the documentation establishing your entitlement to 
reemployment before treating you as not having had a break in service 
for pension purposes. If your documentation is received after 
reemployment and it shows that you are not entitled to reemployment, 
your employer may terminate your employment and any rights or benefits 
that you may have been granted.


Sec.  1002.123  What documents satisfy the requirement that I establish 
my eligibility for reemployment after a period of service of more than 
thirty days?

    (a) Documents that satisfy the requirements of USERRA include the 
following:
    (1) DD (Department of Defense) 214 Certificate of Release or 
Discharge from Active Duty;
    (2) Copy of duty orders prepared by the facility where the orders 
were fulfilled carrying an endorsement indicating completion of the 
described service;
    (3) Letter from the commanding officer of a Personnel Support 
Activity or someone of comparable authority;
    (4) Certificate of completion from military training school;
    (5) Discharge certificate showing character of service; and,
    (6) Copy of extracts from payroll documents showing periods of 
service.
    (b) The types of documents that are necessary to establish your 
eligibility or reemployment will vary from case to case. Not all of 
these documents are available or necessary in every instance to 
establish your reemployment eligibility.

Character of Service


Sec.  1002.134  What type of discharge or separation from service is 
required for me to be entitled to reemployment under USERRA?

    USERRA does not require any particular form of discharge or 
separation from service. However, even if you are otherwise eligible 
for reemployment you will be disqualified if your characterization of 
service falls within one of four categories. USERRA requires that you 
not have received one of these types of discharge.


Sec.  1002.135  What types of discharge or separation from military 
service will make me ineligible for reemployment under USERRA?

    Your reemployment rights are terminated if you are:
    (a) Separated from uniformed service with a dishonorable or bad 
conduct discharge;
    (b) Separated from uniformed service under other than honorable 
conditions, as characterized by regulations of the uniformed service;
    (c) A commissioned officer dismissed as permitted under 10 U.S.C. 
1161(a) by sentence of a general court-martial; in commutation of a 
sentence of a general court-martial; or, in time of war, by order of 
the President; or,
    (d) A commissioned officer dropped from the rolls under 10 U.S.C. 
1161(b) due to absence without authority for at least three months; 
separation by reason of a sentence to confinement adjudged by a court-
martial; or, a sentence to confinement in a Federal or State 
penitentiary or correctional institution.


Sec.  1002.136  Who determines the characterization of my service?

    The branch of service in which you perform your tour of duty 
determines your characterization of service.


Sec.  1002.137  If I receive a disqualifying discharge or release from 
uniformed service and it is later upgraded, will my right to 
reemployment be restored?

    Yes. A military review board has the authority to prospectively or 
retroactively upgrade your disqualifying discharge or release. A 
retroactive upgrade would restore your reemployment rights providing 
you otherwise meet the Act's eligibility criteria.


Sec.  1002.138  If I receive a retroactive upgrade in my 
characterization of service will that entitle me to claim back wages 
and benefits lost as of my date of separation from service?

    No. A retroactive upgrade allows you to obtain reinstatement with 
your former employer, provided you otherwise meet the Act's eligibility 
criteria. Back pay and other benefits such as pension plan credits 
attributable to the time period between your discharge and the 
retroactive upgrade are not required to be restored by your employer in 
this situation.

[[Page 56294]]

Employer Statutory Defenses


Sec.  1002.139  Are there any circumstances in which my pre-service 
employer is excused from its obligation to reemploy me following a 
period of military service? What statutory defenses are available to 
the employer in an action or proceeding for reemployment benefits?

    (a) Even if you are otherwise eligible for reemployment benefits, 
your employer is not required to reemploy you if it establishes that 
its circumstances have so changed as to make your reemployment 
impossible or unreasonable. For example, an employer may be excused 
from reemploying you where there has been an intervening reduction in 
force that would have included you. Your employer may not, however, 
refuse to reemploy you on the basis that an employee was hired to fill 
your position during your absence, even if your reemployment might 
require the termination of that replacement employee;
    (b) Even if you are otherwise eligible for reemployment benefits, 
your employer is not required to reemploy you if it establishes that 
assisting you in becoming qualified for reemployment would impose an 
undue hardship, as defined in Sec.  1002.5(l) and discussed in Sec.  
1002.198, on the employer; or,
    (c) Even if you are otherwise eligible for reemployment benefits, 
your employer is not required to reemploy you if it establishes that 
the employment you left in order to perform service in the uniformed 
services was for a brief, non-recurrent period and there was no 
reasonable expectation that the employment would continue indefinitely 
or for a significant period.

Subpart D--Rights, Benefits, and Obligations of Persons Absent From 
Employment Due to Service in the Uniformed Services

Furlough and Leave of Absence


Sec.  1002.149  What is my status with my civilian employer when I am 
performing service in the uniformed services?

    During your period of service in the uniformed services, you are 
deemed to be on furlough or leave of absence from your civilian 
employer. In this status you are entitled to the non-seniority rights 
and benefits generally provided by the employer to other employees with 
similar seniority, status, and pay that are on furlough or leave of 
absence. Your entitlement to these non-seniority rights and benefits is 
not dependent on how your employer characterizes your status during a 
period of service. For example, if your employer characterizes you as 
``terminated'' during your period of military service, this 
characterization cannot be used to avoid USERRA's requirement that you 
be deemed on furlough or leave of absence, and therefore entitled to 
the non-seniority rights and benefits generally provided to employees 
on furlough or leave of absence.


Sec.  1002.150  What non-seniority rights and benefits am I entitled to 
during my period of service?

    (a) The non-seniority rights and benefits to which you are entitled 
during your service are those that your employer provides to similarly 
situated employees by an employment contract, agreement, policy, 
practice, or plan in effect at your workplace. These rights and 
benefits include those in effect at the beginning of your employment 
and those established after your employment began. They also include 
those rights and benefits that become effective during your period of 
service and that are provided to similarly situated employees on 
furlough or leave of absence.
    (b) If the non-seniority benefits to which employees on furlough or 
leave of absence are entitled vary according to the type of leave, you 
must be given the most favorable treatment accorded to any comparable 
form of leave when you perform service in the uniformed services.


Sec.  1002.151  If my employer provides full or partial pay to me while 
I am on military leave is it required to also provide me with the non-
seniority rights and benefits ordinarily granted to similarly situated 
employees on furlough or leave of absence?

    Yes. If your employer provides additional benefits such as full or 
partial pay when you perform service it is not excused from providing 
other rights and benefits to which you are entitled under the Act.


Sec.  1002.152  If my employment is interrupted by a period of service 
in the uniformed services, are there any circumstances under which I am 
not entitled to the non-seniority rights and benefits ordinarily 
granted to similarly situated employees on furlough or leave of 
absence?

    If your employment is interrupted by a period of service in the 
uniformed services and you knowingly provide written notice of intent 
not to return to your position of employment after service in the 
uniformed services you are not entitled to those non-seniority rights 
and benefits. Your written notice does not waive your entitlement to 
any other rights to which you are entitled under the Act, including 
your right to reemployment after your service.


Sec.  1002.153  If my employment is interrupted by a period of service 
in the uniformed services am I permitted upon request to use my accrued 
vacation, annual or similar leave with pay during the service? Can my 
employer require me to use my accrued leave during my period of 
service?

    (a) If your employment is interrupted by a period of service you 
must be permitted upon request to use any accrued vacation, annual, or 
similar leave with pay during the period of service, in order to 
continue your civilian pay. However, you are not entitled to use sick 
leave that you accrued with your civilian employer during a period of 
service in the uniformed services. Sick leave is not comparable to 
annual or vacation leave; it is generally intended to provide income 
when you or a family member is ill and you are unable to work.
    (b) Your employer may not require you to use accrued vacation, 
annual, or similar leave during a period of service in the uniformed 
services.

Health Plan Coverage


Sec.  1002.163  What types of health plans are covered by USERRA?

    (a) USERRA defines a health plan to include an insurance policy or 
contract, medical or hospital service agreement, membership or 
subscription contract, or arrangement under which your health services 
are provided or the expenses of those services are paid.
    (b) USERRA covers group health plans as defined in the Employee 
Retirement Income Security Act of 1974 (ERISA) at 29 U.S.C. 1191b(a). 
USERRA applies to group health plans that are subject to ERISA, and 
plans that are not subject to ERISA, such as those sponsored by State 
or local governments or religious organizations for their employees.
    (c) USERRA covers multiemployer plans maintained pursuant to one or 
more collective bargaining agreements between employers and employee 
organizations. USERRA applies to multiemployer plans as they are 
defined in ERISA at 29 U.S.C. 1002(37). USERRA contains provisions that 
apply specifically to multiemployer plans in certain situations.


Sec.  1002.164  What health plan coverage must my employer provide to 
me under USERRA?

    If you have coverage under a health plan in connection with your 
employment, the plan must permit you to elect to continue the coverage 
for a certain period of time as described below:
    (a) When you are performing service in the uniformed services you 
are

[[Page 56295]]

entitled to continuing coverage for you (and your dependents if your 
plan offers dependent coverage) under a health plan provided in 
connection with your employment. The plan must allow you to elect to 
continue your coverage for a period of time that is the lesser of:
    (1) The 18-month period beginning on the date on which your absence 
for the purpose of performing service begins; or,
    (2) The period beginning on the date on which your absence for the 
purpose of performing service begins, and ending on the date on which 
you fail to return from your service or apply for a position of 
employment as provided under Sec. Sec.  1002.115 through 1002.123.
    (b) USERRA does not require your employer to establish a health 
plan if there is no health plan coverage in connection with your 
employment, or, where there is a plan, to provide any particular type 
of coverage.
    (c) USERRA does not require your employer to permit you to initiate 
new health plan coverage at the beginning of a period of service if you 
did not previously have such coverage.


Sec.  1002.165  How do I elect continuing health plan coverage?

    USERRA does not specify requirements for electing continuing 
coverage. Health plan administrators may develop reasonable 
requirements addressing how continuing coverage may be elected, 
consistent with the terms of the plan and the Act's exceptions to the 
requirement that you give advance notice of your service in the 
uniformed services. For example, you cannot be precluded from electing 
continuing health plan coverage under circumstances where it is 
impossible or unreasonable for you to make a timely election of 
coverage.


Sec.  1002.166  How much do I have to pay in order to continue my 
health plan coverage?

    (a) If you perform service in the military for fewer than 31 days, 
you cannot be required to pay more than the regular employee share, if 
any, for health plan coverage.
    (b) If you perform service for 31 or more days you may be required 
to pay no more than 102% of the full premium under the plan, which 
represents your employer's share plus your share, plus 2% for 
administrative costs.
    (c) USERRA does not specify requirements for methods of paying for 
continuing coverage. Health plan administrators may develop reasonable 
procedures for payment, consistent with the terms of the plan.


Sec.  1002.167  If my coverage was terminated at the beginning of or 
during my service, does my coverage have to be reinstated upon my 
reemployment?

    (a) If health plan coverage for you or a dependent was terminated 
by reason of your service in the uniformed services, that coverage must 
be reinstated upon reemployment. An exclusion or waiting period may not 
be imposed in connection with the reinstatement of your coverage upon 
reemployment, if an exclusion or waiting period would not have been 
imposed had your coverage not been terminated by reason of such 
service.
    (b) Reinstatement procedures that apply to multiemployer plans are 
discussed in Sec.  1002.169.
    (c) USERRA permits a health plan to impose an exclusion or waiting 
period as to illnesses or injuries determined by the Secretary of 
Veterans Affairs to have been incurred in, or aggravated during, 
performance of service in the uniformed services. The determination 
that your illness or injury was incurred in, or aggravated during, the 
performance of service may only be made by the Secretary of Veterans 
Affairs or his or her representative. Other coverage, for injuries or 
illnesses that are not service-related (or for your dependents, if you 
have dependent coverage), must be reinstated.


Sec.  1002.168  Can I elect to delay reinstatement of my health plan 
coverage until a date after the date I am reemployed?

    USERRA requires your employer to reinstate your health plan 
coverage upon request at reemployment. USERRA permits but does not 
require your employer to allow you to delay reinstatement of health 
plan coverage until a date that is later than the date of your 
reemployment.


Sec.  1002.169  Which employer is responsible for providing me with 
continuing health plan coverage if I am enrolled under a multiemployer 
plan?

    Responsibility under a multiemployer plan for employer 
contributions and benefits in connection with continuing coverage that 
you elect must be allocated either as the plan sponsor provides, or, if 
the sponsor does not provide, to your last employer before your 
service. If your last employer is no longer functional, liability for 
continuing coverage is allocated to the health plan.

Subpart E--Reemployment Rights and Benefits

Prompt Reemployment


Sec.  1002.180  When am I entitled to be reemployed by my civilian 
employer?

    Your employer must promptly reemploy you when you return from a 
period of service if you meet the Act's eligibility criteria as 
described in subpart C of this part.


Sec.  1002.181  How is ``prompt reemployment'' defined?

    ``Prompt reemployment'' means as soon as practicable under the 
circumstances of your case. Absent unusual circumstances, your 
reemployment must occur within two weeks of your application for 
reemployment. For example, prompt reinstatement after your weekend 
National Guard duty generally means the next regularly scheduled 
working day. On the other hand, prompt reinstatement following several 
years of active duty may require more time, because your employer may 
have to reassign or give notice to another employee who occupied your 
position.

Reemployment Position


Sec.  1002.191  What position am I entitled to upon my reemployment?

    As a general rule, you are entitled to reemployment in the job 
position that you would have attained with reasonable certainty if not 
for your absence due to military service. This position is known as the 
escalator position. The principle behind the escalator position is that 
if not for your period of military service, you could have been 
promoted (or, alternatively, demoted, transferred, or laid off) due to 
intervening events. The escalator principle requires that you be 
reemployed in a position that reflects with reasonable certainty the 
pay, benefits, seniority, and other job perquisites, that you would 
have attained if not for the period of service. Depending upon the 
specific circumstances, your employer may have the option, or be 
required, to reemploy you in a position other than the escalator 
position.


Sec.  1002.192  How is my specific reemployment position determined?

    In all cases, the starting point for determining your proper 
reemployment position is the escalator position, which is the job 
position that you would have attained if your continuous employment had 
not been interrupted due to military service. Once this position is 
determined, your employer may have to consider several factors before

[[Page 56296]]

determining your appropriate reemployment position in any particular 
case. Such factors may include your length of service, qualifications, 
and disability, if any. Your reemployment position may be either the 
escalator position; the pre-service position; a position comparable to 
the escalator or pre-service position; or, the nearest approximation to 
one of these positions.


Sec.  1002.193  Does my reemployment position include elements such as 
my seniority, status, and rate of pay?

    Yes. Your reemployment position includes the seniority, status, and 
rate of pay that you would ordinarily have attained in that position 
given your job history, including your prospects for future earnings 
and advancement. Your employer must determine your seniority rights, 
status, and rate of pay as though you had been continuously employed 
during the period of service. The seniority rights, status, and pay of 
an employment position include those established (or changed) by a 
collective bargaining agreement, employer policy, or employment 
practice. The sources of seniority rights, status, and pay include 
agreements, policies, and practices in effect at the beginning of your 
service, and any changes that may have occurred during your period of 
service. In particular, your status in the reemployment position could 
include opportunities for advancement, general working conditions, job 
location, shift assignment, rank, responsibility, and geographical 
location. If an opportunity for promotion, or eligibility for 
promotion, that you missed during service is based on a skills test or 
examination, then your employer should give you a reasonable amount of 
time to adjust to your employment position and then give you the skills 
test or examination. If you are successful on the makeup exam and, 
based on the results of that exam, there is a reasonable certainty that 
you would have been promoted, or made eligible for promotion, during 
the time that you served in the military, then your promotion or 
eligibility for promotion must be made effective as of the date it 
would have occurred had your employment not been interrupted by 
military service.


Sec.  1002.194  Can the application of the escalator principle result 
in adverse consequences when I am reemployed?

    Yes. The Act does not prohibit lawful adverse job consequences that 
result from your restoration on the seniority ladder. Depending on your 
circumstances, your seniority rank may cause you to be reemployed in a 
higher or lower position, laid off, or even terminated. For example, if 
your seniority would have resulted in your being laid off during the 
period of service, and the layoff continued after the date of your 
reemployment, your reemployment would reinstate you to layoff status. 
Similarly, the status of your reemployment position requires the 
employer to assess what would have happened to such factors as your 
opportunities for advancement, working conditions, job location, shift 
assignment, rank, responsibility, and geographical location, if you had 
remained continuously employed. Your reemployment position may involve 
transfer to another shift or location, more or less strenuous working 
conditions, or changed opportunities for advancement, depending upon 
the application of the escalator principle.


Sec.  1002.195  What other factors can determine my reemployment 
position?

    Once your escalator position is determined, other factors may 
allow, or require, your employer to reemploy you in a position other 
than the escalator position. These factors, which are explained in 
Sec. Sec.  1002.196 through 1002.199 below, are:
    (a) The length of your most recent period of military service;
    (b) Your qualifications; and,
    (c) Whether you have a disability incurred or aggravated during 
your military service.


Sec.  1002.196  What is my reemployment position if my period of 
service was less than 91 days?

    Following a period of service in the uniformed services of less 
than 91 days, you must be reemployed according to the following 
priority:
    (a) You must be reemployed in the escalator position. You must be 
qualified to perform the duties of this position. Your employer must 
make reasonable efforts to help you become qualified to perform the 
duties of this position.
    (b) If you are not qualified to perform the duties of the escalator 
position after reasonable efforts by your employer, you must be 
reemployed in the position in which you were employed on the date that 
your period of service began. You must be qualified to perform the 
duties of this position. Your employer must make reasonable efforts to 
help you become qualified to perform the duties of this position.
    (c) If you are not qualified to perform the duties of the escalator 
position or the pre-service position, after reasonable efforts by your 
employer, you must be reemployed in any other position that is the 
nearest approximation first to the escalator position and then to the 
pre-service position. You must be qualified to perform the duties of 
this position. The employer must make reasonable efforts to help you 
become qualified to perform the duties of this position.


Sec.  1002.197  What is my reemployment position if my period of 
service in the uniformed services was more than 90 days?

    Following a period of service of more than 90 days, you must be 
reemployed according to the following priority:
    (a) You must be reemployed in the escalator position or a position 
of like seniority, status, and pay. You must be qualified to perform 
the duties of this position. Your employer must make reasonable efforts 
to help you become qualified to perform the duties of this position.
    (b) If you are not qualified to perform the duties of the escalator 
position or a like position after reasonable efforts by your employer, 
you must be reemployed in the position in which you were employed on 
the date that your period of service began or in a position of like 
seniority, status, and pay. You must be qualified to perform the duties 
of this position. Your employer must make reasonable efforts to help 
you become qualified to perform the duties of this position.
    (c) If you are not qualified to perform the duties of the escalator 
position, the pre-service position, or a like position, after 
reasonable efforts by your employer, you must be reemployed in any 
other position that is the nearest approximation first to the escalator 
position and then to the pre-service position. You must be qualified to 
perform the duties of this position. Your employer must make reasonable 
efforts to help you become qualified to perform the duties of this 
position.


Sec.  1002.198  What efforts must my employer make to help me become 
qualified for the reemployment position?

    You must be qualified for your reemployment position. Your employer 
must make reasonable efforts to help you become qualified to perform 
the duties of this position. Your employer is not required to reemploy 
you on your return from service if you cannot, after reasonable efforts 
by your employer, qualify for the appropriate reemployment position.
    (a) (1) ``Qualified'' means that you have the ability to perform 
the essential tasks of the position. Your inability to perform one or 
more non-essential tasks of a position does not make you unqualified.
    (2) Whether a task is essential depends on several factors, 
including:

[[Page 56297]]

    (i) Whether you regularly perform the task in the job position. It 
is not necessary or sufficient that the task is labeled ``essential,'' 
or is part of your job description. If you do not regularly perform the 
task in your position, it is generally not essential;
    (ii) Whether your position exists solely to perform the task;
    (iii) Whether a significant portion of your workday or workweek is 
spent performing the task;
    (iv) Whether the result of your failing to correctly perform the 
task would create a dangerous workplace situation or cause a 
catastrophe;
    (v) Whether the task is highly specialized, and you were hired 
specifically to perform the task; and,
    (vi) Whether your failure to perform the task would place your 
employer in violation of a law or regulation.
    (b) Only after your employer makes reasonable efforts, as defined 
in Sec.  1002.5(g) and Sec.  1002.5(l), may it determine that you are 
not qualified for the reemployment position. These reasonable efforts 
must be made at no cost to you.


Sec.  1002.199  What priority must my employer follow if two or more 
returning employees are entitled to reemployment in the same position?

    If two or more persons are entitled to reemployment in the same 
position and more than one person has reported or applied for 
employment in that position, the employee who first left the position 
for military service has the first priority on reemployment in that 
position. The remaining employee (or employees) is entitled to be 
reemployed in a position similar to that in which the person would have 
been reemployed according to the rules that normally determine a 
person's reemployment position, as set out in Sec. Sec.  1002.196 and 
1002.197.

Seniority Rights and Benefits


Sec.  1002.210  What seniority rights do I have when I am reemployed 
following a period of uniformed service?

    You are entitled to the seniority and seniority-based rights and 
benefits that you had on the date your service began, plus any 
seniority and seniority-based rights and benefits that you would have 
attained if you had remained continuously employed during your period 
of service. In determining your entitlement to seniority and seniority-
based rights and benefits, your period of uniformed service is not 
considered a break in employment. The rights and benefits protected by 
USERRA upon reemployment include those provided by the employer and 
those required by statute. For example, a reemployed service member 
would be eligible for leave under the Family and Medical Leave Act of 
1993, 29 U.S.C. 2601-2654 (FMLA), if the number of months and the 
number of hours of work for which the service member was employed by 
the civilian employer, together with the number of months and the 
number of hours of work for which the service member would have been 
employed by the civilian employer during the period of military 
service, meet FMLA's eligibility requirements.


Sec.  1002.211  Does USERRA require my employer to use a seniority 
system?

    No. USERRA does not require your employer to adopt a formal 
seniority system. USERRA defines seniority as longevity in employment 
together with any employment benefits that accrue with, or are 
determined by, longevity in employment. In the absence of a formal 
seniority system, such as one established through collective 
bargaining, USERRA looks to the custom and practice in your place of 
employment to determine your entitlement to any employment benefits 
that accrue with, or are determined by, longevity in employment.


Sec.  1002.212  How do I know whether a particular right or benefit is 
a seniority-based right or benefit?

    A seniority-based right or benefit is one that accrues with, or is 
determined by, longevity in employment. Generally, whether a right or 
benefit is seniority-based depends on three factors:
    (a) Whether the right or benefit is a reward for your length of 
service rather than a form of short-term compensation for work 
performed;
    (b) Whether it is reasonably certain that you would have received 
the right or benefit if you had remained continuously employed during 
your period of service; and,
    (c) Whether it is your employer's actual custom or practice to 
provide or withhold the right or benefit as a reward for your length of 
service. Provisions of an employment contract or policies in your 
employee handbook are not controlling if your employer's actual custom 
or practice is different from what is written in the contract or 
handbook.


Sec.  1002.213  How can I demonstrate a reasonable certainty that I 
would have received the seniority right or benefit if I had remained 
continuously employed during my period of service?

    A reasonable certainty is a high probability that you would have 
received the seniority or seniority-based right or benefit if you had 
been continuously employed. You do not have to establish that you would 
have received the benefit as an absolute certainty. You can demonstrate 
a reasonable certainty that you would have received the seniority right 
or benefit by showing that other employees with seniority similar to 
that which you would have had if you had remained continuously employed 
received the right or benefit. Your employer cannot withhold the right 
or benefit based on an assumption that a series of unlikely events 
could have prevented you from gaining the right or benefit.


Sec.  1002.214  What happens if my employer establishes or eliminates 
seniority and seniority-based rights and benefits after I begin my 
period of service?

    (a) When you are reemployed, you are entitled to seniority and 
seniority-based rights and benefits that are established or become 
available after you entered service, even if those rights and benefits 
were not previously available. Those seniority-based rights and 
benefits must be made available upon your reemployment if you otherwise 
qualify for the right or benefit.
    (b) If your employer eliminates seniority or a seniority-based 
right or benefit after you begin your period of service, you are 
entitled to be treated as if you had been continuously employed. For 
example, if an employer that previously made an assignment available 
based on seniority determines while you are absent to make the 
assignment available only to employees who had previously held certain 
other assignments or completed certain training, you may be entitled to 
the assignment if you can show with reasonable certainty that you would 
have acquired the necessary experience or training had you been 
continuously employed. In this situation, the employer is obligated to 
make reasonable efforts to help you become qualified for the position.

Disabled Employees


Sec.  1002.225  Am I entitled to any specific reemployment benefits if 
I have a disability that was incurred in, or aggravated during, my 
period of service?

    Yes. If you have a disability incurred in, or aggravated during, 
your period of service in the uniformed services, your employer must 
make reasonable efforts to accommodate your disability and to help you 
become qualified to perform the duties of your reemployment position. 
If you are not qualified for reemployment in the escalator position 
because of your disability after reasonable efforts by the employer to 
accommodate your disability and to

[[Page 56298]]

help you to become qualified, you must be reemployed in a position 
according to the following priority. Your employer must make reasonable 
efforts to accommodate your disability and to help you to become 
qualified to perform the duties of one of these positions:
    (a) A position that is equivalent in seniority, status, and pay to 
the escalator position; or,
    (b) A position that is the nearest approximation to the equivalent 
position, consistent with the circumstances of your case, in terms of 
seniority, status, and pay.


Sec.  1002.226  If I have a disability that was incurred in, or 
aggravated during, my period of service, what efforts must my employer 
make to help me become qualified for my reemployment position?

    (a) USERRA requires that you be qualified for your reemployment 
position regardless of your disability. Your employer must make 
reasonable efforts to help you to become qualified to perform the 
duties of this position. Your employer is not required to reemploy you 
on your return from service if you cannot, after reasonable efforts by 
your employer, qualify for the appropriate reemployment position.
    (b) ``Qualified'' has the same meaning here as in Sec.  1002.198.

Rate of Pay


Sec.  1002.236  How is my rate of pay determined when I return from a 
period of service?

    Your rate of pay is determined by applying the same escalator 
principles that are used to determine your reemployment position, as 
follows:
    (a) If you are reemployed in the escalator position, your employer 
must compensate you at the rate of pay associated with the escalator 
position. Your rate of pay must be determined by taking into account 
any pay increases, differentials, step increases, merit increases, or 
periodic increases that you would have attained with reasonable 
certainty had you remained continuously employed during your period of 
service. For example, if you missed a merit pay increase while you were 
performing service, but you qualified for previous merit pay increases, 
then your rate of pay should include the merit pay increase that you 
missed. If the merit pay increase that you missed during service is 
based on a skills test or examination, then your employer should give 
you a reasonable amount of time to adjust to your reemployment position 
and then give you the skills test or examination. The escalator 
principle also applies in the event a pay reduction occurred in the 
reemployment position during your period of service. Any pay adjustment 
must be made effective as of the date it would have occurred had your 
employment not been interrupted by military service.
    (b) If you are reemployed in the pre-service position or another 
position, your employer must compensate you at the rate of pay 
associated with the position in which you are reemployed. As with the 
escalator position, your rate of pay must be determined by taking into 
account any pay increases, differentials, step increases, merit 
increases, or periodic increases that you would have attained with 
reasonable certainty had you remained continuously employed during your 
period of service.

Protection Against Discharge


Sec.  1002.247  Does USERRA provide me with protection against 
discharge?

    Yes. If your most recent period of service in the uniformed 
services was more than 30 days you must not be discharged except for 
cause--
    (a) For 180 days after your date of reemployment if your most 
recent period of uniformed service was more than 30 days but less than 
181 days; or,
    (b) For one year after the date of reemployment if your most recent 
period of uniformed service was more than 180 days.


Sec.  1002.248  What constitutes cause for discharge under USERRA?

    You may be discharged for cause based either on your conduct or, in 
some circumstances, on the application of the escalator principle.
    (a) In a discharge action based on your conduct, your employer 
bears the burden of proving that it is reasonable to discharge you for 
the conduct in question, and that you had notice that such conduct 
would constitute cause for discharge.
    (b) If the application of the escalator principle after your 
reemployment results in your job position being eliminated, or in your 
being placed on layoff status, either of these situations would 
constitute cause for purposes of USERRA. Your employer bears the burden 
of proving that your job would have been eliminated or that you would 
have been laid off.

Pension Plan Benefits


Sec.  1002.259  How does USERRA protect my pension benefits?

    On reemployment you are treated as not having a break in service 
with your employer or employers maintaining a pension plan, for 
purposes of participation, vesting and accrual of benefits, by reason 
of your period of service in the uniformed services.
    (a) Depending on the length of your period of service, you are 
entitled to take from one to ninety days following your service before 
reporting back to work or applying for employment (See Sec.  1002.115). 
This period of time must be treated as continuous service with your 
employer for purposes of determining participation, vesting and accrual 
of pension benefits under the plan.
    (b) If you are hospitalized for, or convalescing from, an illness 
or injury incurred in, or aggravated during, your service you are 
entitled to report to or submit an application for reemployment at the 
end of the time period necessary for you to recover from the illness or 
injury. This period, which may not exceed two years from the date you 
completed your service, except in circumstances beyond your control, 
must be treated as continuous service with your employer for purposes 
of determining the participation, vesting and accrual of pension 
benefits under the plan.


Sec.  1002.260  What pension benefit plans are covered under USERRA?

    (a) The Employee Retirement Income Security Act of 1974 (ERISA) 
defines an employee pension benefit plan as a plan that provides 
retirement income to employees, or defers employee income to a period 
extending to or beyond the termination of employment. Any such plan 
maintained by your employer or employers is covered under USERRA. 
USERRA also covers certain pension plans not covered by ERISA, such as 
those sponsored by a State, government entity, or church for its 
employees.
    (b) USERRA does not cover pension benefits under the Federal Thrift 
Savings Plan; those benefits are covered under 5 U.S.C. 8432b.


Sec.  1002.261  Who is responsible for funding any plan obligation to 
provide me with pension benefits?

    With the exception of multiemployer plans, which have separate 
rules discussed below, your employer is liable to the pension benefit 
plan to fund any obligation of the plan to provide benefits that are 
attributable to your period of service. In the case of a defined 
contribution plan, once you are reemployed, your employer must allocate 
the amount of its make-up contribution for you, if any, your make-up 
employee contributions, if any, your elective deferrals, if any, and 
the repayment of distributions from the plan, if any, in the same 
manner and to the same extent that it allocates the amounts for other 
employees during the

[[Page 56299]]

period of service. In the case of a defined benefit plan, your accrued 
benefit will be increased for your period of service once you are 
reemployed and, if applicable, have repaid any amounts previously paid 
to you from the plan and made any employee contributions that may be 
required to be made under the plan.


Sec.  1002.262  When is my employer required to make the plan 
contribution that is attributable to my period of military service?

    (a) The employer is not required to make its contribution until you 
are reemployed. For employer contributions to a plan in which you are 
not required or permitted to contribute, your employer must make the 
contribution attributable to your period of service no later than 
thirty days after the date of your reemployment. If it is impossible or 
unreasonable for your employer to make the contribution within thirty 
days after the date you were reemployed, your employer must make the 
contribution as soon as practicable.
    (b) If you are enrolled in a contributory plan you are allowed (but 
not required) to make up your missed contributions or elective 
deferrals. These makeup contributions or elective deferrals must be 
made during a time period starting with your date of reemployment and 
continuing for up to three times the length of your immediate past 
period of military service, with the repayment period not to exceed 
five years. If you cannot make up missed contributions as an elective 
deferral because you are no longer employed by the employer sponsoring 
the plan, the plan must give you an equivalent opportunity to receive 
the maximum employer matching contributions that were available under 
the plan during your period of uniform service through a match of 
after-tax contributions.
    (c) If your plan is contributory and you do not make up your 
contributions or elective deferrals, you will not receive the employer 
match or the accrued benefit attributable to your contribution because 
your employer is required to make contributions that are contingent on 
or attributable to your contributions or elective deferrals only to the 
extent that you make up your payments to the plan. Any employer 
contributions that are contingent on or attributable to your make-up 
contributions or elective deferrals must be made according to the 
plan's requirements for employer matching contributions.
    (d) You are not required to make up the full amount of employee 
contributions or elective deferrals that you missed making during your 
period of service. If you do not make up all of your missed 
contributions or elective deferrals, your pension may be less than if 
you had done so.
    (e) Any vested accrued benefit in the pension plan that you were 
entitled to prior to your period of military service remains intact 
whether or not you choose to be reemployed under the Act after leaving 
the military.
    (f) An adjustment will be made to the amount of employee 
contributions or elective deferrals you will be able to make to the 
pension plan for any employee contributions or elective deferrals you 
actually made to the plan during your period of service.


Sec.  1002.263  Am I required to pay interest when I make up my missed 
contributions or elective deferrals?

    No. You are not required to make up a missed contribution in an 
amount that exceeds the amount you would have been permitted or 
required to contribute had you remained continuously employed during 
your period of service.


Sec.  1002.264  Am I allowed to repay my account balance if I withdrew 
all or part of my account from the pension benefits plan before 
becoming reemployed?

    Yes. If you withdrew all or part your account balance from the 
pension benefits plan before you became reemployed, you must be allowed 
to repay the withdrawn amounts when you are reemployed. In the case of 
a defined benefit plan (but not a defined contribution plan) the amount 
you must repay includes any interest that would have accrued had the 
monies not been withdrawn. The repayment of these amounts must be made:
    (a) During a time period starting with the date of reemployment and 
continuing for up to three times the length of the employee's immediate 
past period of military service, with the repayment period not to 
exceed five years; or
    (b) During the time period provided by 26 U.S.C. 411(a)(7)(C) (if 
applicable); or
    (c) Within such longer time period as may be agreed to between the 
employer and service member.


Sec.  1002.265  If I am reemployed with my pre-service employer is my 
pension benefit the same as if I had remained continuously employed?

    The amount of your pension benefit depends on the type of pension 
plan.
    (a) In a non-contributory defined benefit plan, where the amount of 
your pension benefit is determined according to a specific formula, 
your benefit will be the same as though you had remained continuously 
employed during your period of service.
    (b) In a contributory defined benefit plan, you will need to make 
up your contributions in order to have the same benefit as if you had 
remained continuously employed during your period of service.
    (c) In a defined contribution plan, the benefit may not be the same 
as if you had remained continuously employed, even though you and your 
employer make up any contributions or elective deferrals attributable 
to your period of service, because you are not entitled to forfeitures 
and earnings or required to experience losses that accrued during your 
period or periods of service.


Sec.  1002.266  What are the obligations of a multiemployer pension 
benefit plan under USERRA?

    A multiemployer pension benefit plan is one to which more than one 
employer is required to contribute, and which is maintained pursuant to 
one or more collective bargaining agreements between one or more 
employee organizations and more than one employer. The Act uses ERISA's 
definition of a multiemployer plan. In addition to the provisions of 
USERRA that apply to all pension benefit plans, there are provisions 
that apply specifically to multiemployer plans, as follows:
    (a) The last employer that employed you before your period of 
service is responsible for making the employer contribution to the 
multiemployer plan, if the plan sponsor does not provide otherwise. If 
the last employer is no longer functional, the plan must nevertheless 
provide coverage to the service member.
    (b) An employer that contributes to a multiemployer plan and that 
reemploys you must provide written notice of your reemployment to the 
plan administrator within 30 days after your date of reemployment.
    (c) You are entitled to the same employer contribution whether you 
are reemployed by your pre-service employer or by a different employer 
contributing to the same multiemployer plan.


Sec.  1002.267  How is my compensation during my period of service 
calculated in order to determine my pension benefits, if my benefits 
are based on my compensation?

    In many pension benefit plans, your compensation determines the 
amount of your contribution or the retirement benefit to which you are 
entitled.
    (a) Where your rate of compensation must be calculated to determine 
your

[[Page 56300]]

pension entitlement, the calculation must be made using the rate of pay 
that you would have received but for your period of military service.
    (b)(1) Where the rate of pay you would have received is not 
reasonably certain, such as where your compensation is based on 
commissions that you earned, your average rate of compensation during 
the 12-month period prior to your period of military service must be 
used.
    (2) Where the rate of pay you would have received is not reasonably 
certain and you were employed for less than 12 months prior to the 
period of military service, your average rate of compensation must be 
derived from this shorter period of employment that preceded your 
service.

Subpart F--Compliance Assistance, Enforcement and Remedies

Compliance Assistance


Sec.  1002.277  What assistance does the Department of Labor provide to 
employees and employers concerning employment, reemployment, or other 
rights and benefits under USERRA?

    The Secretary, through the Veterans' Employment and Training 
Service (VETS), provides assistance to any person or entity with 
respect to employment and reemployment rights and benefits under 
USERRA. This assistance includes a wide range of compliance assistance 
outreach activities, such as responding to inquiries; conducting USERRA 
briefings and Webcasts; issuing news releases; and, maintaining the 
elaws USERRA Advisor (located at http://www.dol.gov/elaws/userra.htm), 
the e-VETS Resource Advisor and other Web-based materials (located at 
http://www.dol.gov/vets/#userra), which are designed to increase 
awareness of the Act among affected persons, the media, and the general 
public. In providing such assistance, VETS may request the assistance 
of other Federal and State agencies, and utilize the assistance of 
volunteers.

Investigation and Referral


Sec.  1002.288  How do I file my USERRA complaint?

    If you are claiming entitlement to employment rights or benefits or 
reemployment rights or benefits and you allege that your employer has 
failed or refused, or is about to fail or refuse, to comply with the 
Act, you may file a complaint with VETS or initiate a private legal 
action in a court of law (see Sec.  1002.303). A complaint filed with 
VETS must be in writing, using VETS Form 1010 (instructions and the 
form can be accessed at http://www.dol.gov/elaws/vets/userra/1010.asp), 
and must include the name and address of your employer, a summary of 
the basis for your complaint, and a request for relief.


Sec.  1002.289  How will VETS investigate my USERRA complaint?

    (a) In carrying out any investigation, VETS has, at all reasonable 
times, reasonable access to and the right to interview persons with 
information relevant to the investigation. VETS also has reasonable 
access to, for purposes of examination, the right to copy and receive 
any documents of any person or employer that VETS considers relevant to 
the investigation.
    (b) VETS may require by subpoena the attendance and testimony of 
witnesses and the production of documents relating to any matter under 
investigation. In case of disobedience of or resistance to the 
subpoena, the Attorney General may, at VETS' request, apply to any 
district court of the United States in whose jurisdiction such 
disobedience or resistance occurs for an order enforcing the subpoena. 
The district courts of the United States have jurisdiction to order 
compliance with the subpoena, and to punish failure to obey a subpoena 
as a contempt of court. This paragraph does not authorize VETS to seek 
issuance of a subpoena to the legislative or judicial branches of the 
United States.


Sec.  1002.290  Does VETS have the authority to order compliance with 
USERRA?

    No. If VETS determines as a result of an investigation that the 
complaint is meritorious, VETS attempts to resolve the complaint by 
making reasonable efforts to ensure that any persons or entities named 
in the complaint comply with the Act. If VETS' efforts do not resolve 
the complaint, VETS notifies the person who submitted the complaint of:
    (a) The results of the investigation; and,
    (b) The person's right to proceed under the enforcement of rights 
provisions in 38 U.S.C. 4323 (against a State or private employer), or 
38 U.S.C. 4324 (against a Federal executive agency or the Office of 
Personnel Management (OPM)).


Sec.  1002.291  What actions may I take if my complaint is not resolved 
by VETS?

    If you receive a notification from VETS of an unsuccessful effort 
to resolve your complaint relating to a State or private employer, you 
may request that VETS refer the complaint to the Attorney General.


Sec.  1002.292  What can the Attorney General do about my complaint?

    (a) If the Attorney General is reasonably satisfied that your 
complaint is meritorious, meaning that you are entitled to the rights 
or benefits sought, the Attorney General may appear on your behalf and 
act as your attorney, and initiate a legal action to obtain relief for 
you.
    (b) If the Attorney General determines that your complaint does not 
have merit, the Attorney General may decline to represent you.

Enforcement of Rights and Benefits Against a State or Private Employer


Sec.  1002.303  Am I required to file my complaint with VETS?

    No. You may initiate a private action for relief against a State or 
private employer if you decide not to apply to VETS for assistance.


Sec.  1002.304  If I file a complaint with VETS and VETS' efforts do 
not resolve my complaint can I pursue the claim on my own?

    Yes. If VETS notifies you that it is unable to resolve your 
complaint, you may pursue the claim on your own. You may choose to be 
represented by private counsel whether or not the Attorney General 
decides to represent you as to your complaint.


Sec.  1002.305  What court has jurisdiction in an action against a 
State or private employer?

    (a) If an action is brought against a State or private employer by 
the Attorney General, the district courts of the United States have 
jurisdiction over the action. If the action is brought against a State 
by the Attorney General, it must be brought in the name of the United 
States as the plaintiff in the action.
    (b) If an action is brought against a State by a person, the action 
may be brought in a State court of competent jurisdiction according to 
the laws of the State.
    (c) If an action is brought against a private employer or a 
political subdivision of a State by a person, the district courts of 
the United States have jurisdiction over the action.
    (d) An action brought against a State Adjutant General, as an 
employer of a civilian National Guard technician, is considered an 
action against a State for purposes of determining which court has 
jurisdiction.

[[Page 56301]]

Sec.  1002.306  As a National Guard civilian technician am I considered 
a State or Federal employee for purposes of USERRA?

    If you are a National Guard civilian technician you are considered 
a State employee for USERRA purposes, although you are considered a 
Federal employee for most other purposes.


Sec.  1002.307  What is the proper venue in an action against a State 
or private employer?

    (a) If an action is brought by the Attorney General against a 
State, the action may proceed in the United States district court for 
any district in which the State exercises any authority or carries out 
any function.
    (b) If an action is brought against a private employer, or a 
political subdivision of a State, the action may proceed in the United 
States district court for any district in which the employer maintains 
a place of business.


Sec.  1002.308  Who has legal standing to bring an action under USERRA?

    An action may be brought only by the United States or by the 
person, or representative of a person, claiming rights or benefits 
under the Act. An employer, prospective employer or other similar 
entity may not bring an action under the Act.


Sec.  1002.309  Who is a necessary party in an action under USERRA?

    In an action under USERRA only an employer or a potential employer, 
as the case may be, is a necessary party respondent. In some 
circumstances, such as where terms in a collective bargaining agreement 
need to be interpreted, the court may allow an interested party to 
intervene in the action.


Sec.  1002.310  How are fees and court costs charged or taxed in an 
action under USERRA?

    No fees or court costs may be charged or taxed against you if you 
are claiming rights under the Act. If you obtain private counsel for 
any action or proceeding to enforce a provision of the Act, and you 
prevail, the court may award reasonable attorney fees, expert witness 
fees, and other litigation expenses.


Sec.  1002.311  Is there a statute of limitations in an action under 
USERRA?

    No. USERRA does not have a statute of limitations, and it expressly 
precludes the application of any State statute of limitations. If you 
unreasonably delay asserting your rights, and that unreasonable delay 
causes prejudice to your employer, the courts have recognized the 
availability of the equitable doctrine of laches to bar a claim under 
USERRA.


Sec.  1002.312  What remedies may be awarded for a violation of USERRA?

    In any action or proceeding the court may award relief as follows:
    (a) The court may require your employer to comply with the 
provisions of the Act;
    (b) The court may require your employer to compensate you for any 
loss of wages or benefits suffered by reason of your employer's failure 
to comply with the Act;
    (c) The court may require your employer to pay you an amount equal 
to the amount of lost wages and benefits as liquidated damages, if the 
court determines that your employer's failure to comply with the Act 
was willful. A violation shall be considered to be willful if the 
employer or potential employer either knew or showed reckless disregard 
for whether its conduct was prohibited by the Act.
    (d) Any wages, benefits, or liquidated damages awarded under 
paragraphs (b) and (c) of this section are in addition to, and must not 
diminish, any of the other rights and benefits provided by USERRA (such 
as, for example, the right to be employed or reemployed by the 
employer).


Sec.  1002.313  Are there special damages provisions that apply to 
actions initiated in the name of the United States?

    Yes. In an action brought in the name of the United States, for 
which the relief includes compensation for lost wages, benefits, or 
liquidated damages, the compensation must be held in a special deposit 
account and must be paid, on order of the Attorney General, directly to 
the person. If the compensation is not paid to you because of the 
Federal Government's inability to do so within a period of three years, 
the compensation must be converted into the Treasury of the United 
States as miscellaneous receipts.


Sec.  1002.314  May a court use its equity powers in an action or 
proceeding under the Act?

    Yes. A court may use its full equity powers, including the issuance 
of temporary or permanent injunctions, temporary restraining orders, 
and contempt orders, to vindicate the rights or benefits guaranteed to 
you under the Act.

    Signed at Washington, DC, this 10th day of September, 2004.
Frederico Juarbe Jr.,
Assistant Secretary for Veterans' Employment and Training.
[FR Doc. 04-20844 Filed 9-17-04; 8:45 am]
BILLING CODE 4510-79-P