Summer is usually when employees who belong to the National Guard and military Reserves give their two weeks of duty to Uncle Sam. Some military-connected employees may be deployed for longer periods of time. Now is the time to prepare for their absence. Here’s how:
• Ask reservists about their periods of.
• For military leave beginning midweek, offset military pay against exempts’ salaries. Nonexempts need no offset, since they need not be paid if they don’t work.
• Reservists may choose to use vacation time for military leave; withhold taxes from vacation pay.
• Withhold income and FICA taxes from differential payments made to reservists who are absent up to 30 days. Withhold only income taxes from differential pay for reservists who are serving for longer periods.
• Health benefits provided to reservists must match those provided to employees on nonmilitary leave. If leave is for 31 or fewer days, you can’t charge reservists more than the regular amount.
• If your cafeteria plan allows, reservists who are away for at least 180 days or indefinitely may take qualified reservist distributions from their health flexible spending accounts; those distributions are fully taxable.
• The accrual rate for seniority-based benefits includes all time spent on military leave. Example: If vacation increases from two to three weeks after five years, military service counts when determining when that threshold is met.
• Employers’ pension contributions continue during reservists’ absence; reservists must be allowed to make up contributions when they return to work.
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