Preface 

Mr. Chairman and distinguished members of the House Veterans Affairs Subcommittee on Economic Opportunity on behalf of 1.1 million Reserve Component members, the Reserve Officers Association (ROA) of the United States and the Reserve Enlisted Association (REA) of the United States expresses its appreciation for the opportunity to submit testimony about the status of veterans’ employment.  Over the past year veterans, service members, and their families have seen an increase in Congressional and Presidential support.

As contingency operations bring about increased mobilizations and deployments, many outstanding citizen Soldiers, Sailors, Airmen, Marines, and Coast Guardsmen have put their civilian careers on hold while they serve their country in harm’s way.  Since September 11, 2001, more than 725,000 Reserve and Guard service members have been mobilized, with nearly one third of those having been deployed more than twice. They share the same risks and their counterparts in the Active Components, but aren’t guaranteed career longevity like the full time professionals.

Yet, many return home to find unemployment or underemployment.

Executive Summary

Issues supported by the Reserve Officers and Reserve Enlisted Associations are to:

Support for Hiring Veterans:

• Implement DoD forms that would inform employers of skills potential veteran gained through their military service.
• Support employer incentives specific to the hiring of returning veterans and reserve component members.
• Oversee Veterans’ Recruitment and Employment Strategic Plan.

Veteran Status:

• Improve communications to field on new veteran preference program.
• Extend veteran status to Guard and Reserve members who don’t serve on active duty to 180 days.

Education:

• GI Bill - pass legislation that adds technical,  On Job Training, and apprenticeship programs to the Post-9/11 GI Bill eligibility

Reserve and Guard Small Business Owners:

• Support incentives permitting deployed small business owners to keep their businesses.

Employment Protections - Improve USERRA & SCRA:

• Suggested improves follow in written testimony.

Introduction

The consequences of mobilization and demobilization do not solely impact the military member; it also has an effect on families and employers. Families and employers play a large role in a citizen-warrior’s decision on whether or not to enlist and to remain in the military.  In personnel surveys, employer pressure is listed as one of the top two reasons why Guardsmen and Reservists quit military service.

Reserve forces cannot train or deploy without the continued cooperation of their civilian employers, who hire Reservists, and who provide the required time off and rearrange work schedules to accommodate their Reservist employees’ training and deployment schedules.

As Reserve activations and deployments increase during this extended Global War on Terrorism, employers’ costs associated with hiring Reservists also increase, and with these higher costs, the employers’ reluctance to hire Reservists may grow as well.  If Reservists believe that their civilian livelihoods are adversely affected by their Reserve affiliation, they will end that affiliation.

The aggregate success of an all-volunteer Total Force depends on an appropriate reliance on Guard and Reserve forces. An all volunteer active force is very expensive, and must be kept at a manageable and affordable level. This force must be augmented by a capable Reserve Component.  The accessibility to these Reserve Component forces depends in large measure on the acquiescence and support of the employers of our citizen-soldiers.   Without a viable Guard or Reserve, a larger Active duty force will raise the expense of National Defense. 

An Encumbrance

Reservist’s employers are being burdened by extra costs to support national defense when their Reserve Component employees are called up multiple times.

Civilian employers’ work and production schedules (and the bottom line) are affected to a greater or lesser degree by the availability of their workers.  The Uniform Service Employment and Reemployment Rights Act (USERRA) requires that employers make time available to their Reservist-employees for military training, forbids hiring discrimination, and mandates job protection for deployed Guard and Reserve members.  Yet USERRA doesn’t necessarily provide the depth of protection that Congress intended.

Small businesses, which the Internal Revenue Service (IRS) defines as having a 100 or fewer employees, employ 60 percent of the nation’s work force, and have created two-thirds of the new jobs since 1970.  Some small companies, however, are much more vulnerable to these mobilization risks from the Global War on Terrorism and other call-ups such as Hurricane Katrina.  

Businesses that operate in communities near military bases will suffer as U.S. forces are deployed overseas and local economies are stressed. National Guard call-ups are another potential worry for employers. Key workers could be asked to report to duty for prolonged and unpredictable periods. Somewhere between 100,000 to 200,000 members from the National Guard may be used either to help the war effort in Iraq and Afghanistan or to replace the vacancies left by deployed active-duty officers at home.

Many small businesses are unable to continue operating and face going out of business, when their Reserve employees are asked to leave their jobs and serve the nation in the war on terrorism, also forcing other employees from their jobs.  Most small businesses cannot afford to provide differential pay and supplemental benefits.

Civilian employees increasingly are choosing not to hire veterans. In an online survey by Workforce Management Research Center it showed that more than half civilian employers would if they knew that a Reservist or Guard member could be called up again, being taken away from their civilian job for an indeterminate period, would not hire a RC member.

Despite initiatives created by Congress, the unemployment rate for veterans and service members has continue to increase at an alarming rate.

Employment Protections

Veterans and service members are provided protections through the National Committee for Employer Support of the Guard and Reserve (ESGR), the Uniformed Services Employment and Reemployment Rights Act (USERRA), and the Servicemembers' Civil Relief Act (SCRA).

Though the Reserve Components have jobs when they leave for a deployment once they return too often those jobs are no longer available despite Federal law requiring employers to hold their positions. In the Federal FY-09 Department of Labor opened a record number, 1,437 cases based on veterans’ complaints about violations in law. The Department of Justice (DoJ) also reported during the same period a record number of lawsuits against employers for failing to give returning RC members their jobs back. As it stands many RC members, more than 40 percent, lose income when they mobilize.

In an IAVA report published January 2009 employers surveyed demonstrates their lack of knowledge of USERRA with 36 percent unaware of the protections they are supposed to provide service members and 61 percent do not have an understanding of military service qualifications.

Notwithstanding the protections afforded veterans and service members, and antidiscrimination laws it is not unusual for members to lose their jobs due to time spent away while deployed. Sometimes this is by employers who go out of business, but more because it costs employers money, time, and effort to reintroduce the employee to the company.

ROA strongly urges Congress to pass legislation granting tax credits to employers of Reserve Component members.

Improvements to USERRA

While the Department of Labor’s December 2005 regulations positively affect USERRA enforcement, many other things still need to be done to improve USERRA.  ROA and REA encourage Congress to support further USERRA provisions that will protect employment of the Reserve Components and encourages compliance by employers.

• Do not permit employers to discriminate by asking prospective employees if they are in the Guard or Reserve.
• • Exempt employees from penalties when their insurance lapses if their motor carrier license expires while mobilized (i.e., the Federal Motor Carrier Safety Administration).
• Work with Federal agencies to abide by USERRA/SCRA standards.
• Provide protection of mobilized Guard and Reserve students by granting academic leaves of absences, guarding academic standing and refund guarantees.
• Expand USERRA’s definition of “service in the uniformed services” to include an employee’s need to be absent from work for purposes of medical treatment (from DOD or Department of Veterans Affairs facilities) for a wound, injury, or illness incurred or aggravated during a period of service in the uniformed services.
• Amend 38 U.S.C. 4323(d)(1)(C)—the "liquidated damages" provision to require employers who have violated USERRA to remunerate to the servicemember an amount of $20,000 or the amount equal to the actual damages, whichever is greater. Provide a provision in section 4324 allowing for liquidated damages when the employer is a federal executive agency and the violation was willful, such as found in section 4323 as it applies to States, political subdivisions of States, and private employers.
• Amend Title 38 U.S.C. 4323(e) to mandate (rather than simply permit) injunctive relief to prevent or correct a USERRA violation.
• Amend Title 49 U.S.C. 44935 to apply USERRA to servicemembers employed by the Transportation Security Administration (TSA) as screeners.
• Amend 38 U.S.C. 4302(b) to make clear that USERRA overrides an agreement to submit future USERRA disputes to binding arbitration.
• Amend 38 U.S.C. 4303 (definition of “employer”) to clarify that a successor in interest (a new employer often resulting from a merger, transfer of assets or takeover of a function between companies) inherits the predecessor’s USERRA obligations and that a merger or transfer of assets is not necessary to support a finding of successor liability.
• Amend 38 U.S.C. 4323 and 4324 to authorize punitive damages for willful and egregious USERRA violations.

ROA Service Members Law Center

While USERRA is supposed to provide protection, the U.S. government can’t provide the legal support resources for the ever increasing number of reemployment cases.  National Guard and Reserve members and returning veterans are forced to seek private legal representation.  Because of its USERRA expertise, it was suggested that ROA develop a Servicemembers Law Center, advising Active and Reserve servicemembers who have been subject to legal problems that occur during deployment.  The center was opened in June 2009.

The legal center will help encourage new members to join the Active, Guard and Reserve components by providing a non-affiliation service to educate prior service about USERRA and Servicemember Civil Relief Act (SCRA) protections, and other legal issues. It would help retention as a member of the staff could work with Active and Reserve Component members to counsel those who are preparing to deploy, deployed or recently deployed members facing legal problems.

The Legal Center can advise, refer by providing names of attorneys who work related legal issues and amicus curiae briefs, encourage law firms to represent service members, and educate and training lawyers, especially active and reserve judge advocates on service member protection cases. The center could also be a resource to Congress.

Needed Improvements to the Servicemen’s Civil Relief Act

In the age of internet back ground checks, employers can check credit scores and financial backgrounds before hiring a new employee.  Veterans who have been deployed have certain protections, but improvements can be made.  WhileSCRA made major improvements in the SSCRA, but new problem areas continue to surface.  This section proposes seven SCRA amendments to address these problem areas. The Reserve Officers Association would be pleased to work with the Veterans Affairs Committees on furthering these and other corrections.

Amend the SCRA to forbid discrimination based on membership in a Reserve Component or the possibility of future utilization of SCRA rights:  Under section 518 of the SCRA (50 U.S.C. App. 518), it is unlawful for a creditor or other party to discriminate against or take an adverse action against a servicemember based on the servicemember having applied for or received a stay, postponement, or suspension under the SCRA.  Under the current law, it is not unlawful for a creditor or potential creditor to deny credit based on the prospective borrower’s membership in a Reserve Component and the possibility that the prospective borrower could be mobilized in the future and could apply for or receive a stay, postponement, or suspension.  ROA proposes that Congress amend the SCRA to close this loophole. 

Amend the SCRA to broaden the types of leases and contracts which the person entering active duty can terminate without penalty: Under the SSCRA, since 1917, a person entering active duty has been permitted to terminate a lease on premises (apartment, house, office, farm, etc.).  In 2003, Congress broadened this provision to enable the person entering active duty to terminate a vehicle lease.  In 2008, Congress enacted a new provision to permit a servicemember to terminate a cell phone contract under certain circumstances.   Congress needs to amend the SCRA to include leases and contracts for small businesses, in addition to leases of premises, vehicles, and cell phones. 

Amend the SCRA to make the right to a continuance and the protection against default judgment apply to arbitration proceedings:  The individual who is on active duty may be unable to respond promptly to a civil lawsuit or administrative proceeding, especially if the individual is deployed to a place like Iraq or Afghanistan.  Since 1917, the SSCRA has given the individual in this situation some protection, including the right to a continuance and default judgment protection if military service interferes with a timely response.  In 2003, Congress expanded these provisions to make them apply to administrative as well as judicial proceedings, but the provision has been held not to apply to arbitration proceedings. 

Amend the SCRA to forbid exorbitant overdraft fees and late fees for deployed servicemembers:  There have been instances where deployed servicemembers have been charged hundreds or thousands of dollars in overdraft fees or late fees for a low-dollar overdraft on a checking account or a late payment on a credit card.  Such exorbitant fees should be forbidden. 

Unemployment

The national unemployment rate for 2009 was 9.3 percent, the highest since 1983, while the rate for Operations Iraqi Freedom (OIF) and Enduring Freedom (OEF) veterans as of March 2010 is 14.7 percent.

Gulf War (August 1990 – present) veterans comprise about one-third National Guard and Reserve (current or past). Among the Gulf War-era RC veterans the unemployment rate as of August 2009 was 10.9 percent. The overall unemployment rates for OIF and OEF of Reserve Component veterans was 10.2 percent in 2009. 

Young male veterans (18 to 24 years) had an unemployment rate of 21.6 percent in 2009 with nearly two-thirds of all veterans from the current conflicts are under 35 years.

Approximately 21 percent of OIF and OEF veterans have service-connection disabilities.

Other unique characteristics of the current veteran population is that women make up 18 percent of OIF and OEF veterans compared to three percent for past conflicts. Also OIF and OEF veterans are far more likely to work for the Federal Government than nonveterans, 15 percent veterans compared to two percent nonveterans. Also veterans’ unemployment has on average increased about one percent since 2007 although for Reserve Components it has actually quadrupled in the same period.

Post-9/11 GI Bill

With rising unemployment among OIF and OEF including Guard and Reserve members, transitioning members need the opportunity to gain new skills, education, and experience to compete for jobs especially in our current difficult economic situation. Yet the Post-9/11 GI Bill does not include on the job (OJT), apprenticeship, and flight training programs.

ROA and REA urge Congress to pass legislation that adds OJT, apprenticeship, and flight training programs to the Post-9/11 GI Bill eligibility.

Additionally it’s believed that the unemployment rate for veterans would be far worse than reported if so many veterans were not enrolling in educational institutions utilizing the Post-9/11 GI Bill. These veterans are not counted as being unemployed even though many need to continue working to support their families while attending school.

Barriers to Employment of Veterans

There are two very significant barriers that service members and veterans face. One is the lack of knowledge regarding the transition from military to civilian life. The other is the lack of ability of the veteran as well as a potential employer to translate the veteran’s skills and education into a civilian job.

According to a Military.com 2007 survey 61% of employers don’t believe they have “a complete understanding of the qualifications ex-servicemembers offer,” and more than three-quarters of veterans entering the civilian workforce reported “an inability to effectively translate their military skills to civilian terms.” Veterans also feel they lack critical career advancement skills like networking and salary negotiation.

Civilian employers are also wary of hiring RC members because of potential disruptions in the employee’s work schedule due to their service requirements as well as medical appointments and war-related health problems.  

HR.2847 Hiring Incentives to Restore Employment Act was signed into law creating new tax breaks for hiring and retaining unemployed workers. Several other bills were also introduced this past year.

ROA and REA encourage the implementation of certifications or form that would inform employers of skills potential veteran and service member employees gained through their military service.

While not under this committees jurisdiction we hope that the Veterans Committee can support specific incentives to hire returning veterans and Guard and Reserve members.

Federal Government Employment

At the end of Fiscal Year (FY) 2008 there were about 480,000 veterans working within the Federal Government.

In comparison to the private sector, the Federal Government hires three times percentage of veterans, seven times percentage of disabled veterans, and ten times the percentage of severely injured veterans.

Agencies within the government that demonstrate distinction should be studied and the results shared with all agencies as well as the private sector. For example nearly 80 percent of veterans are employed in three agencies – Departments of Defense (DoD), Veterans Affairs (VA), and Homeland Security (DHS) – which makes up approximately 58 percent of the workforce.

In OPM’s FY 2010-2012 Government-wide Veterans’ Recruitment and Employment Strategic Plan they identified key barriers to increasing the number of veterans employed in the Federal Government which are listed below:

• Lack of clear leadership regarding the value and importance of hiring veterans
• Infrastructure that doesn’t support advocacy of veterans’ employment within Federal agencies
• Insufficient understanding of Veterans’ Preference and utilization of special hiring authorities by human resources professionals and hiring officials
• Inadequate understanding of Veterans’ Preference and Federal hiring process by veterans and transitioning service members
• Absence of systems to match veterans’ skills and education to positions within the Federal Government

ROA and REA encourage this committee to closely oversee OPM’s strategic plan for veterans’ recruitment employment to utilize information and gain a better understanding of obstacles and potential opportunities.

Veterans’ Status and Preference

Contrary to the legacy veteran’s preference program where veterans were given 5 or 10 points on their application for federal service, a new program began this past September taking service members through the needed steps to acquire a federal job upon leaving the military. Their skills are assessed to determine what kind of work they can do in federal service then directed to those corresponding positions.  ROA and REA support expansion of this program.

Current law defines members of the Reserve Components who completed 20 or more years of service as “military retirees.” At the age of 60, these retirees are eligible for all the benefits afforded active duty military retirees, such as military retired pay, and TRICARE health care. But they are not considered as Veterans as they didn’t serve a qualifying period of 180 days of federal active duty.  In some cases, these individuals have even directly supported contingency operations, but on “training” orders.

Many States and cities grant benefits to veterans, such as education and employment benefits, and use the federal definition of a veteran to determine eligibility. So certain Guard and Reserve retirees aren’t eligible for these local benefits, either.

Congressman Tim Walz (D–Minn.) introduced a bill in October 2009. His H.R.3787 would amend Title 38, United States Code, to deem certain service in the Reserve Components as active service for purposes of laws administered by the secretary of Veterans Affairs. In early January his bill had 30 co-sponsors. 

The Reserve Officers Association supports this bill and hopes that the committee will release it for consideration by the House.

Small Business Owners

Reserve Component small business owners are particularly challenged by deployments. About 22 percent of self-employed Reservists find their activations impact their personal businesses, creating very serious problems.  Many have to sell out partnerships, or close down businesses.  And as many of these Reserve Component members are employers of others, many non-military are laid off when the business owner is deployed.

ROA and REA support initiatives to provide small business owners with protections for their businesses to be sustained while on deployment, for example a potential program in which a trained substitute if one is not available to run the business while the member is out country.

Conclusion

ROA and REA would like to thank the committee and its staff for its attention to this crucial issue which has increasingly become a pressing concern for veterans and their families. Even more so for RC members that are being utilized at a high operation tempo, requiring longer and more frequent periods of absence from their civilian jobs.

Service members and veterans as well as their families face daunting obstacles to their futures once they are separated from the military. The unemployment rate nationally is a growing problem, yet for veterans there situation is compounded for varying reasons causing their unemployment likelihood to be higher especially for the young veterans.

ROA and REA appreciate efforts by this committee to address employment issues that veterans face. We look forward to continuing to work with the committee and staff.