Military Leave and the Workplace/
SBA Offers Relief
Columbia, Mo., January 28, 2003—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.
As America faces the threat of war with Iraq, those numbers are likely
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, it may be time to reacquaint
yourself with the policies regarding military leave and reemployment
rights. And you may 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 should 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 that
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.
Call 573-882-0344 for more information, or locate a center near you
on the MO SBDC website.
Missouri Small Business Development Centers
410 S. Sixth Street
200 Engineering North
Columbia, MO 65211
Phone: 573-884-1555
Fax: 573-884-4297
