HEART, USERRA, and Differential Wage Payments

[Guest ebenefits]

I understand that for payroll purposes HEART now requires treatment of differential wage payments as 3401 wages subjecting them to certain payroll taxes. I also understand that for Code purposes (415, etc.) differential wage payments are treated as compensation. However, where it gets a bit sticky for me is when HEART states that employers don't need to count DWPs as compensation for benefit accrual purposes under a defined benefit plan.

If USERRA requires that, upon proper reemployment, an employer must credit the service member for benefit accrual purposes based on the compensation he/she "would have earned" but for the period of military service - what good does it do an employer to exclude these DWPs from it's Plan definition of compensation for benefit accrual purposes? It seems to me that if a person is out and is paid DWPs, then upon reemployment, those amounts would count toward (or offset) the USERRA-required compensation that needs to be counted in accruing the person's benefit over the military service period.

If the employer includes the DWPs in its Plan definition of Compensation and uses a W-2 (3401) definition of Compensation for "Code purposes" (415, etc.), what is the impact? Am I missing something? Will there ever be a situation where a person's DWPs are counted for benefit accrual purposes, but they are not properly reemployed under USERRA (thus invoking those rules)?

Any guidance, thoughts, etc. would be appreciated... thanks!