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Salary, job benefits concern reservists

As employers stress over staffing gaps, reservists dread
cuts in salary, benefits

By Diane E. Lewis, Globe Staff, 3/16/03

Globe Staff Photo/Jonathan Wiggs Stephen M. Quinn, a military reservist, said he has no financial concern about being called up to active duty because his employer, Axcelis Technologies, has extended its pay benefits.

Reservist Stephen M. Quinn knows that with tensions heating up over Iraq, he could be called any day to leave his job as an associate test engineer at Axcelis Technologies in Beverly. He has his concerns about the prospect of war. But one thing he's not worried about: how to provide for his family while he's away.

Axcelis, a manufacturer of integrated circuit machinery, used to offer full pay for 30 days to reservists at its Beverly site on top of their military pay. But since the terror attacks of Sept. 11, 2001, the company extended coverage to include the difference between workers' military and civilian pay for up to five months, with paid medical benefits.

''When the company changed its policy, it made a huge difference,'' said Quinn. With four children at home, he had reason for concern. His take-home pay from Axcelis would have dropped more than 50 percent to $1,000 per month if he had been activated under the old policy. Instead, the new policy meant the company paid $700 a month to maintain his family's health coverage, and it made up the difference in wages after Quinn was called up by the Coast Guard to patrol Boston Harbor in April 2002.

Quinn could be tapped to serve again. ''But I'm not as worried because everything is more manageable,'' he said. ''If the company's policy had remained the same and I was called up again, I'd have to contact the bank about my mortgage and call our creditors'' to tell them payments could be late.

Axcelis, which employs 12 reservists, received an award last month from the US Department of Defense's National Committee for Employer Support of the Guard and Reserve for its financial support of reservists.

From Massachusetts to California, more companies are providing pay and benefits to reservists today than they did during the Gulf War. But policies vary widely, especially between large and small employers. Some reservists with low-paying military jobs and little or no financial compensation from employers face the burden of worrying about their families' ability to manage on military pay.

Under the Uniformed Services Employment and Re-employment Rights Act of 1994, reservists are entitled to return to their civilian jobs after completing an assignment. They must be reinstated to the same or a comparable job, with full pay and the same status. The law places a five-year limit, with some exceptions, on the total amount of time a person can serve and remain eligible to return to an employer. The law does not require that the employer continue the worker's pay or benefits during activation, however.

''The bad news is that some small firms are stressed when they lose a key productive employee,'' said Colonel John O'Shea, a retired Army officer, and director of public affairs for the 78,000-member Reserve Officers Association in Washington, D.C. Larger companies tend to have more resources than smaller ones to deal with reservists. A 2003 study by the association found 105 of 154 Fortune 500 firms surveyed provide differential pay, up from 75 in 2002, and 53 in 2001.

Shannon Smith, 27, of Nashua, knows about the challenges reservists' families face. Her husband, Thomas, 26, was deployed by the Army National Guard earlier this year, leaving her with four children under the age of 7. A corrections officer at the Hillsborough County Corrections Department in Manchester, N.H., he will not receive differential pay during his absence, Ginger Chandler, director of human resources for the county, said.

''It's been difficult. The military pay is not high,'' said Shannon Smith. ''Where he was working, it was significantly higher.'' Her husband drives a truck in the military. Luckily, she said, the state recently awarded food stamps for her children and many of the family's bills are paid, including the car.

For some, the difference between military pay and civilian wages varies so greatly that deployment could result in the loss of up to 60 percent of the reservist's real earnings, according to Chicago outplacement firm Challenger, Gray & Christmas. Information from the US Department of Labor and the military appears to support the outplacement firm's data. A private first class or sergeant working as a radiology technician earns between $17,500 and $22,000, plus $3,000 for food, while on duty. Civilian radiology techs earn as much as $52,000 per year.

Meanwhile, said CEO John Challenger, periods of active duty have gotten long with shorter periods between call-ups. ''About 8 percent of the 51,000 reservists who are currently serving are into their second year of active duty. It is not uncommon for units to come home after a tour only to be redeployed in a matter of months,'' he said.

Take the Army reservists from the 307th military police company in New Kensington, Pa. In the summer of 2001, 46 of the 180 reservists were sent to a peacekeeping mission in Bosnia. Then, in October 2001, 90 members from the same unit were mobilized for homeland security. Last month, all 180 were sent to Fort Dix, N.J., to await further orders, noted Jack Gordon, a chief of public affairs for the 99th regional support command of the Army Reserves in Pittsburgh. ''Many of them served one year, came home for five months, and now the entire unit is headed out again,'' he said. ''So, the transition from reserve to active duty is a challenge.''

Ted Mulvehill, director of veterans services for the town of Norwood, said the Massachusetts town wanted to offer extended benefits or differential pay but could not because of the uncertainty surrounding the length of activation. The town employs five reservists. Norwood adopted an ordinance that continues reservists' pay during their two weeks' training, but it does not extend to full activation.

''Obviously, a two-week training period is going to have a different fiscal impact than [continuing pay] for people who are away for a full year,'' said Mulvehill. ''Towns in a strong position that are not relying on state aid for all their day-to-day functions should be able to consider it, particularly if they don't have many reservists.''

According to Andre Mayer, senior vice president of the 7,500-member Associated Industries of Massachusetts, two-thirds of the group's members are small companies and many are unable to do much more than hold their reservists' positions. Mayer said AIM has received calls from employers who are trying to maintain business after losing a key employee.

Aware that some are struggling, the Small Business Administration is offering disaster loans to companies that have been adversely impacted by the departure of an employee or business owner called to serve. Information is available at www.sba.gov/reservists/ or 1-800-U-ASKSBA.

Employees who are activated by the reserves are protected from home mortgage foreclosure and some credit problems by the federal Soldiers and Sailors Civil Relief Act of 1940. Under the law, reservists are eligible for a reduction of credit card debt to 6 percent and the interest on their mortgages can be reduced to 6 percent while they are away.

Diane E. Lewis can be reached at dlewis@globe.com.

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