PTO Policy May Trigger Additional Paid Leave Under the Uniformed Services Employment and Reemployment Act (USERRA)

First, we deeply appreciate our service members and their families. Second, this update is to provide proactive guidance to employers based on recent case law interpreting USERRA in the context of requiring employers to pay employees while on military leave. Lastly, we wanted to point out some recent changes to Duluth’s Earned Sick and Safe Time ordinance that take effect today.

Court of Appeals Finds USERRA Requires Paid Time Off – If Paid Time Off Is Provided For Other Leaves

On August 10, 2021, the Third Circuit Court of Appeals (covering PA, NJ, DE) joined the Seventh Circuit Court of Appeals (covering WI, IL, IN), finding that an employer failed to properly compensate an employee while on short-term military leave. See White v. United Airlines, Inc., 987 F.3d 616 (7th Cir. 2021); Travers v. Federal Express Corp., __F.4th__ (3rd Cir. Aug. 10, 2021). Both of these opinions were issues of first impression in their respective courts (meaning, it had not been decided in that circuit before). There is also a case pending in the Ninth Circuit Court of Appeals (AK, AZ, CA, HI, ID, MT, NV, OR, WA) regarding the same issue; it is anticipated that court will also find in the employee’s favor based on that court’s previous leanings. Minnesota, as you may recall, is in the Eighth Circuit. However, with remote work and expanding businesses, many more employers have employees throughout the U.S. and should be aware of this recent interpretation of an employee’s rights, and an employer’s obligations, under USERRA.

These cases center around USERRA’s requirement that employees on military leave be given the same “rights and benefits” as comparable, non-military leaves. Specifically, they address whether an employer is required to provide paid leave for a military absence if the employer provides other paid leaves (i.e., jury duty, bereavement leave, sick leave, vacation time, ESST and paid time off), and similar benefits (i.e., earning credit under profit sharing plans). Collectively, they find that an employer’s paid leave policy(ies) (or other benefits) can be as generous as they want, however, they must be equal (comparable) for both military and non-military members. The DOL looks to three factors to consider whether leaves are comparable – (1) the duration; (2) the purpose; and (3) the ability to choose when to take it. The first factor being the most significant.

This means, if you have an unlimited PTO policy, presumably, a military member could take unlimited paid military leave. However, the employee must demonstrate the leaves are comparable in duration. For example, a 3-day jury duty paid leave is not comparable to a 20-day military leave; however, unlimited time off is unlimited time off. If you allow salary continuation for one group, you must allow salary continuation for the other (military) group. Basically, a military member cannot be at a disadvantage because of a military leave than an employee who took leave for another (non-military) reason. In short, if you are an employer with a generous or unlimited PTO policy or a salary continuation plan, you should be aware that you may need to provide the same paid time off for a USERRA qualifying event (or amend your policy to cap PTO).

Changes to Duluth’s Earned Sick & Safe Time Ordinance Takes Effect Today

Duluth employers should be aware that the Earned Sick and Safe Time (“ESST”) ordinance has been amended, effective today. The key changes are:

  • ESST may be used for, “Lost work hours due to closure of employee’s place of employment for public health reasons”.
  • All new employees must be given a copy of the ESST policy (or the substantially equivalent paid leave policy that encompasses ESST leave).
  • The ESST policy must be included in the Employee Handbook.
  • If there is a violation found, employers may be ordered to notify employees in writing.
  • Appeals of findings are via the city’s administrative hearing process.

If you have questions regarding the above, or any other employment-related concerns, please contact Corie Anderson at (952) 921-4615 or cjanderson@prkalaw.com, or any other attorney at Peters, Revnew, Kappenman & Anderson, P.A.

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