NYPD Settles Pension Class Action in Favor of Active Military Service Employees

By Ossai Miazad

The NYPD has entered into a class-wide settlement of claims by officers who performed active military service during their employment with the NYPD. The officers alleged that the NYPD’s method of calculating pension contributions for the period in which they were on military leave short-changed them in violation of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).

USERRA is a federal law that prohibits employers from penalizing employees for taking military leave during their regular employment in order to serve in the military. Virtually all employers, regardless of size, are required to comply with USERRA. Under USERRA, employees’ pension benefits during military leave are based on the compensation that the employees would have earned had they not been on active military duty.

The U.S. Department of Justice filed the lawsuit against NYPD alleging violations of USERRA’s requirements by failing to include the amount of the officers’ overtime and night shift pay in its calculation of their pension benefits during military leave. According to the plaintiffs’ complaint, officers at the NYPD had the opportunity to work and did in fact work overtime hours. The NYPD, however, relied solely on the officers’ average base rate of pay to calculate their pension benefits. By disregarding the compensable overtime and night shift hours that officers would have worked had they not been on military leave, the NYPD underestimated the amount of compensation that employees would have earned.

If the court approves the parties’ proposed settlement, the NYPD will proceed to reimburse retired officers for the past pension benefits that were unlawfully withheld. In addition, all active officers can request to have their past pension benefits recalculated to include overtime and night shift compensation. The proposed settlement also requires New York City to update the calculation method in all of the City’s retirement systems to comply with USERRA. As a result of this policy change, NYPD officers and all other municipal workers who have performed active military service since September 11, 2001 should receive the full amount of their pension benefits in the future.

As this proposed settlement illustrates, USERRA provides powerful employment safeguards aimed at protecting the rights and benefits of civilian employees who serve with the military.