Helping Out America's Civilian-Soldiers

Reservists who are called up usually face a sizable income drop. Now, though, many employers are going all-out to make them whole

The idea of standing in harm's way is no doubt the biggest fear of the 50,000 military reservists who may be called to active duty in the wake of the September 11 terrorist attacks on the World Trade Center and the Pentagon. But many civilian-soldiers have another source of anxiety: an abrupt cut in income as they go on the military's payroll.

Whether motivated by patriotism in the atrocity's aftermath or by an unwillingness to appear callous, a number of private employers are apparently deciding to shoulder the burden of making up the difference between what their employees normally earn and what they get on active duty, at least for the time being.

A late September survey of 51 employers found that about two-thirds intend to offer those bound for the military at least a temporary pay differential -- and in a few cases, full salary. The survey, by human resources consulting firm Watson Wyatt Worldwide, looked at employers with a combined full-time workforce of about 500,000.


  Another study of 178 companies, conducted by the WorldatWork human resources professional organization, found similar results. About 56% of respondents offered partial or full salary -- generally for at least the first nine weeks of the reservist's active duty. Some 47% of the Watson Wyatt respondents also said they plan to continue company-sponsored health coverage for reservist employees and their dependents, even though both groups would be eligible for medical care through the military.

Many of the employers surveyed by WorldatWork are putting into effect existing policies, says Kay Sandvik Schmitke, manager of surveys and research for the group. But the generosity of others apparently has been stimulated by the terrorist attacks, says Keith Lebling, a spokesman for the Reserve Officers Assn. in Washington. He says since the terrorist bombings, his organization has been inundated with phone calls from employers wanting to know, "How can we do the right thing?"

It's difficult to say just how big a drop in pay private-sector employees face when they're called up, Lebling notes, because compensation packages vary according to occupation and other factors, as do military wages, which are tied to rank and other considerations. In some cases, he notes, civilian-soldiers in a relatively low-paying private job may actually get a raise on entering the military. Typically, though, he says, the reservist faces a drop in income when called up.


  Among the employers that have opted for a more expansive policy is General Dynamics, a defense contractor. During the 1991 Persian Gulf war, the company made up the difference between its employees' military and civilian pay for the first 90 days of active duty. After the terrorist attack, GD decided to lengthen that term to one year, says spokesman Robert Doolittle. "We are very concerned that our employees who enter active duty are not harmed financially," he says. Of GD's 52,000 employees, about 700 are in the reserves or the National Guard.

Other companies that have expanded their largesse include Bank One, Bank of America, and American Standard, the plumbing products company. American Standard makes up the difference between its employees' regular and military pay for six months, during which it maintains their benefits. It has also set up a service to help family members on the home-front manage financial matters that are normally handled by the employee, says spokeswoman Lisa Glover.

Bank One plans to make up the pay difference for its reservists' entire tour of duty, says spokesman Thomas Kelly. Bank officials do not yet know how many of their 78,000 employees are reservists, but they believe most of those called up would face a pay cut. Under a policy adopted Sept. 17, Bank of America, which previously had continued full salary for two weeks to reservists on military duty, extended the term to 90 days, according to a spokeswoman.


  Shortly after the attack, President Bush authorized the call-up of 50,000 members of the Army and Air Force National Guard, plus reservists from the Army, Navy, Air Force, Marine Corps, and Coast Guard. So far, about 26,000 men and women from 44 states, the District of Columbia, and Puerto Rico have received marching orders, according to the National Committee for Employer Support of the Guard & Reserve (, an agency run by the Defense Dept. Under the Uniformed Services Employment & Reemployment Rights Act of 1994 ( those called from private civilian jobs to active duty are, in general, guaranteed their former jobs back. But employers aren't required to make up the difference between their normal and military pay while they're away.

Just how long companies will extend the enhanced compensation policies, especially in light of the weak economy, is a big question. Jane Lassner, a senior consultant in the Stamford (Conn.) offices of Watson Wyatt says much will hinge on how long the war against terrorism lasts.

"Employers don't want to look like bad guys now," she says. "They want to look generous and patriotic." But, she adds, she senses that they're also being cautious, "because this could be huge, and they don't want to be completely exposed." The potential combatants no doubt feel the same way.

By Pamela Mendels in New York

Before it's here, it's on the Bloomberg Terminal.