Dealing with Military Call-Ups in the Work Place

Small business is feeling the pinch from the call-up of military reservists in the highest numbers since the Gulf War nearly 12 years ago. More than 130,000 men and women have been called up at different times and from different places since September 2001.

With America currently engaged in continuing conflict with Iraq, those numbers may continue to increase. For some firms, those absences create huge holes in a small company's ability to maintain its competitiveness in an already challenging economy.

If you're a small business owner or manager, you may want to reacquaint yourself with the policies regarding military leave and reemployment rights. You may also need to develop a contingency plan that will ensure a call-up of your key employees does not cripple your operation.

One of the newest resources for employers facing this situation is the U.S. Small Business Administration Veterans Business Development Office's website at www.sba.gov/reservists/. Here you can find a detailed listing of the SBA programs that can assist small businesses avoid a disruption in services caused by the absence of a critical employee. The site also includes information for reservists on their rights under the law if called to active duty.

The Federal Military Leave Law (the Uniformed Services Employment and Reemployment Rights Act of 1994 - USERRA) provides for military leaves of absence and reemployment of eligible employees when they return from military leave. This law applies to all civilian employers, both public and private. Although most states have a military leave law, the federal statute supersedes the state legislation, except in cases when the state statute is more generous to the employee. The law covers "absences to perform any duty in a uniformed service" and includes training, weekend drills, summer camps and examinations, as well as active duty.

USERRA stipulates that employees give employers notice—in writing—as soon as possible if a call-up is imminent. Although written notice is not required to release an employee, it is recommended. Leave may not be denied except in cases when the absence is expected to exceed five years.

Although the federal statute does not require that employees continue to be compensated by the small business during their absence, some companies voluntarily pay employees the difference between their military wage and their regular wage to prevent hardship for the employee. The law gives employees on military leave the option of using paid vacation time while on leave, but the employer is not allowed to require they do so.

Employers are obligated to continue health insurance coverage for military personnel. The amount the employee must contribute and the length of coverage is dependent on each company's individual policy. Coverage cannot be cancelled because the reservist and her family become eligible under the military's coverage, and insurers cannot impose a waiting period before reinstatement into the company's plan. Check with your policyholder for the best information for your case.

Employees on military leave are eligible for all other employee benefits as well, just as if they were not absent from the workplace. Although employers are free to fill these vacancies during the period the military employee is gone, the returnee is entitled to reenter the very same position upon her deactivation, generally without loss of seniority.

Although the absence of a key employee may at first appear daunting, looking for the positives in the situation can help both the employer and employee deal with the separation.

For instance, there are savings in payroll taxes and some employee benefits by using temporary staffing in an employee's absence. If you put another permanent employee in the reservist's spot temporarily, it presents the opportunity to cross train an employee, which may come in handy in future situations when the permanent employee is gone on vacation or sick leave.

From a financial standpoint, the SBA offers some programs that may be of help.

Small businesses suffering economic injury because an owner or employee was called to active duty may apply for Military Reservist Economic Injury Disaster Loans. Loans of up to $1.5 million are available at an interest rate not to exceed four percent.

If your business currently has an SBA direct or guaranteed loan, you can ask for repayment deferrals, interest rate deductions or other assistance.

The SBA's 7(a) loan program is available to help small businesses acquire financing when it is not available through normal commercial channels. This is the agency's most flexible financing option.

Access to all of these SBA services and to more information to help employers and employees through these transition periods is available at your local Small Business Development Center.

Send this article to a friend

Authored by: Mary Paulsell, Missouri Small Business Development Centers
Source: Creating Quality Newsletter, Volume 12, Number 6, June 2003

go back

Newsletter archives: 2004 | 2003 | 2002 | 2001