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.
√ Ask reservists about their periods of. Note: Some states allow reservists’ family members to also take leave.
√ 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 and from the value of time donated to them by co-workers.
√ Withhold income and FICA taxes from military differential payments made to reservists who are absent for up to 30 days. Withhold only income taxes from differential pay paid to reservists who are serving for longer periods. You may treat the pay as supplemental wages.
√ 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.
√ Nonseniority benefits (e.g., health benefits) provided to reservists must match benefits provided to employees on nonmilitary leave. If leave is for 31 or fewer days, you can’t charge reservists more than the regular amount. Idea: Allow them to prepay.
√ For longer periods of military leave, military law allows reservists and their dependents to elect COBRA-like benefits (i.e., benefits for 24 months at 102% of the premium). Warning: This applies to all employers, including small employers that aren’t covered under COBRA. For COBRA-covered employers, COBRA also applies.
√ 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. Reservists called to military duty for a period exceeding 30 days may receive distributions of their 401(k) pretax amounts.
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