Federal Employment of Military Personnel
The Uniformed Services Employment and Re-employment Rights Act of 1994 (PL 103-353), known as USERRA, expanded
reemployment rights for members of the Guard and Reserves by holding the jobs of employees who are activated for military duty or
training. The law is administered by OPM. In 1998, Congress enacted the Veterans Employment Opportunities Act, or VEOA. This
law (PL 105-339) expanded opportunities for veterans to compete for federal job vacancies that would otherwise be closed to them. It
required, among other things, that agencies allow qualified veterans to compete whenever they open competition for positions outside
their own workforce. It also revised and expanded the rights of veterans to appeal hiring and reduction in force decisions if they find
that their preference rights are being violated. It also allowed veterans to appeal to the Merit Systems Protection Board (MSPB) if the
Labor Department is unable to resolve their complaint within 60 days.
USERRA covers all uniformed services, including the Guard and Reserves, as well as the Commissioned Corps of the Public Health
Service. The law reaffirms the obligation of employers to rehire veterans who have less than a cumulative five years of service.
Specifically, the law: 1) Is intended to protect the job rights of non-career service people. The law established a five-year cumulative
total on military service with the federal government, with certain exceptions allowed for call-ups during emergencies for Reserve
drill and annually scheduled active duty for training; 2) Grants job restoration rights, based on the duration of military service rather
than the type of military duty performed; and 3) Requires OPM to find employment in the executive branch for certain employees
when their former agencies determine that it is “impossible” or “unreasonable” to re-employ them.
The law also amends the Federal Employees Group Life Insurance (FEGLI) and the Federal Employees Health Benefits (FEHB)
regulations to assure that employees who separate from federal service to perform military service are considered as employees in
non-pay status. Health coverage may continue for up to 18 months after the employee enters military service, the first year of which
the enrollee pays only the employee share of the premium, and the final six months of which the enrollee pays the entire.
Applying for Restoration Rights. Federal employees who wish to exercise their restoration rights after active duty must apply within
90 days if their service was for more than 180 days. If their service was 30-180 days, they must apply for restoration within 14 days. If
their service was less than 31 days, they must apply on the next scheduled workday after discharge (including
eight hours for travel).
Service Sustained Disabilities. If not qualified to perform the duties of a position because of a disability sustained during service,
such person is nevertheless entitled to restoration in any other position the duties of which he is qualified to perform.
Leaves of Absence. Reservists and National Guard personnel performing short tours of training duty, and inductees and enlistees, are
entitled to leaves of absence from their positions. Upon release from such training duty, or upon rejection in the case of inductees or
enlistees, they must report for work at the beginning of the next regularly scheduled work day after expiration of the last calendar day
necessary to travel from the training site to the place of employment; or within a reasonable time thereafter, if return is delayed due to
factors beyond a person’s control.
Time Limits. Reservists or Guard personnel performing initial training duty for three to six months must apply for restoration within
31 days after release from such training duty.
MILITARY RETIREES
Dual Compensation: On October 5, 1999, President Clinton signed the National Defense Authorization Act for Fiscal Year 2000
(P.L.106-65). Section 651 of this law (text below) repeals section 5532 of title 5, United States Code. This action ends the reductions
in retired or retainer pay previously required of retired members of a uniformed service who are employed in a civilian office or
position of the U.S. Government. This repeal is effective retroactively to October 1, 1999. The pay cap that limited the combined total
of Federal civilian basic salary plus military retired pay to Executive Level V for all Federal employees who are retirees of a
uniformed service is no longer in effect.
It is significant to note that the new law does NOT repeal other parts of the Dual Compensation Act of 1964 that will remain in title 5,
United States Code (U.S.C.). The 1964 Act removed the absolute barriers to employment of retired military officers and adopted a
"fresh start" policy for military retirees. This policy established limits on service credit and veterans’ preference to ensure that military
retirees did not receive unfair advantages in pay and tenure over civilian employees, including other veterans. As a result, the military
service of retired members of a uniformed service continues to not count as creditable service for retention (RIF), annual leave
accrual, and retirement purposes [see 5 U.S.C. 3501(a), 3502(a), 6303(a) and 8411(c)]. In addition, this repeal has no effect on the
reduction in salary required of reemployed civilian annuitants under the Civil Service Retirement System (CSRS) and Federal
Employee Retirement Systems (FERS). Agencies may continue to request waivers of these reductions when appropriate under criteria
in 5 CFR 553 and 5 U.S.C. 8344 or 8468.
A number of regulations apply to retired military personnel employed by the federal government, as set forth below.
Veterans Preference. With certain exceptions, military retirees are not entitled to placement in the veterans preference subgroup of
their tenure group for reduction-in-force purposes, and they get credit only for the length of military service performed during a war or
in any campaign for which a campaign badge has been issued. Excepted from this provision in the
Dual Compensation Act are military personnel whose retirement was based upon a disability that was the direct result of an act of war;
those whose retirement was based on less than 20 years of active service; and those employed on November 30, 1964 in the federal
service to whom the laws on veterans preference applied and who did not have a break in service of more than 30
days after that. Generally, military retirees below the rank of major get veterans preference in examinations and appointments, even
though they do not get preference in reductions in force.
Annual Leave. Credit for military service of military retirees for annual leave purposes is limited to service during a war, or in a
campaign for which a campaign badge has been issued, unless the member was retired for combat disability, or was employed on
November 30, 1964 in a federal civilian position to which the annual and sick leave laws apply, and did not have a break in
service of more than 30 days after that.
180-Day Restriction. Military retirees must wait 180 days after their retirement before taking a civilian job in any branch of the
Defense Department unless prior approval has been received from the service secretary. This restriction does not apply, to shortagecategory jobs or in a national emergency (5 USC 3326).
Excused Absence for Returning Activated Military Employees. In recognition of the sacrifices activated civilian employees have
made, the President has directed that all agencies grant 5 work days of excused absence, without charge to leave, to these employees
upon notification to their employing agencies of their intent to return to Federal civilian employment. This request
covers all employees who were activated for military service in connection with Operation Noble Eagle, Operation Enduring
Freedom, Operation Iraqi Freedom, or any other military operations subsequently established under Executive Order 13223. Agencies
may grant this period of excused absence prior to the employee's resumption of his duties, or at a time mutually
agreeable to the agency and the employee, if the employee has already returned to duty.
Employment during Terminal Leave. Agencies not part of the Department of Defense (DoD) may employ a member of a uniformed
service on terminal leave (5 USC 5534a). DoD agencies may employ service members on terminal leave prior to military retirement
only if the service secretary provides a waiver under 5 USC 3326.
RETIREMENT CREDIT FOR MILITARY SERVICE
Generally, military service is creditable for civil service retirement purposes. However, since military service performed after
December 31, 1956 is also creditable for Social Security benefits, the law requires that those retirees who combine post-1956 military
service with civil service for a single annuity must have their civil service retirement annuity recomputed at the age of 62 when they
become eligible for Social Security. This provision has often resulted in a significant reduction of retirement benefits, unless the
employee makes a deposit to the retirement fund to cover military service.
SERVICE CREDIT DEPOSIT FOR POST-1956 MILITARY SERVICE
Employed before October 1, 1982. Individuals who first became employed in a position under the Civil Service Retirement System
(CSRS) before October 1, 1982 have the option of either (1) making the deposit for post-1956 military service; or (2) receiving credit
as in the past (without making the deposit) and having their annuity recomputed at age 62 to eliminate post-1956
military service if they are eligible for Social Security old-age or survivor benefits. Included are individuals who were, prior to
October 1, 1982, covered under CSRS and again employed under CSRS on or after October 1, 1982.
Employed on or after October 1, 1982. Individuals who first became employed under CSRS on or after October 1, 1982, will
receive credit for their post-1956 military service only if a deposit for the military service is made. Employed on or after January 1,
1984. Such individuals, who are subject to the Federal Employees Retirement System (FERS), will receive credit for their post-1956
military service only if a deposit is made under FERS.
Amount of Deposit. The deposit for CSRS or CSRS offset employees is 7 percent of basic military pay received, plus interest. For
individuals subject to FERS, the deposit is 3 percent of basic military pay. If the FERS employee has a CSRS component, and the
military service will be credited in the CSRS component, then the percent is the same as that for CSRS employees.
The interest accrual date (IAD) is the date interest is accrued and posted to the employee’s account.
Payment Procedures. Employees who wish to make service credit deposits for their post-1956 service may elect to make such
deposits in either a lump sum payment, installment payments, or through payroll deductions. Employees who wish to make service
credit deposits should evaluate their own individual situation to determine whether such deposits would prove advantageous. They
should contact their personnel office for additional instructions. Once an employee
has made a service credit deposit, only the Office of Personnel Management has the authority to refund the deposit. (See also the
chapters on Retirement in this Guide.)