Academic journal article ABA Banking Journal

What to Do When Uncle Sam Calls Employees and Borrowers. (ACTION STEPS FOR BANKERS)

Academic journal article ABA Banking Journal

What to Do When Uncle Sam Calls Employees and Borrowers. (ACTION STEPS FOR BANKERS)

Article excerpt

More than 1.3 million Americans serve in the National Guard and the Armed Forces Reserves, and, with the President's federal mobilization of many of them in September, many bank employees and employers will be affected.

Banks should be aware of certain obligations that employers of all sizes have under the Uniformed Services Employment and Reemployment Rights Act of 1994, which is enforced by the Department of Labor. Among them:

* Subject to a five-year limit, guardsmen and reservists have the right to return to employment with the pre-service employer at the same seniority, status, and rate of pay they would have enjoyed had they remained with the employer.

* Continuation for up to 18 months of employer-provided health insurance, at up to 102% of the full premium, to be paid by the reservist or guardsman. (This is similar to civilian "COBRA" plans.)

* Requirement that military service time be counted towards vesting for employee benefit plans.

* Prohibition on firms requiring employees to use vacation or leave time for their service.

Note that employers are not required to pay employees who are on military leave of absence. However, the website notes, "many employers offer differential pay or a specific number of paid military leave days" to guardsmen and reservists. Also, for absences of less than 30 days, benefits continue as if the employee has not been absent.

You can find out more by going to the following website: This site is operated by the National Committee for Employer Support of the Guard and Reserve. This committee, part of the Defense Department, works to ensure smooth relations between employers and reservists and guardsmen. Since the mobilization, ESGR has been operating a live 24-hour information service at 1-800-336-4590. Among other things, ESGR provides ombudsmen who can assist in working out issues between employers and employees.

Lt. Col. Michael H. Lovitt, director of public affairs for the committee, reports that some employers have already announced expanded, voluntary support for those being called up. One example: General Dynamics plans to make up the difference between armed forces pay and civilian wages for any of its activated employees for up to one year. …

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