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Key Employee

Definition A Key Employee, in the context of VA benefits, refers to an individual who holds a critical position and possesses specialized knowledge or skills within a veteran-owned small business. This person is considered crucial to the operation, success, and continuity of the business. In some cases, a key employee may also be a veteran […]


A Key Employee, in the context of VA benefits, refers to an individual who holds a critical position and possesses specialized knowledge or skills within a veteran-owned small business. This person is considered crucial to the operation, success, and continuity of the business. In some cases, a key employee may also be a veteran with a significant service-connected disability or the surviving spouse of a veteran.

Key Takeaways

  1. A Key Employee is an essential worker in a business, whose expertise and skills are crucial to the success and stability of the organization. In the context of VA benefits, these individuals may be eligible for various financial incentives and support programs.
  2. VA-backed loans for small businesses with Key Employees may have a lower interest rate, as well as reduced closing costs and fees. This is because the Small Business Administration (SBA) considers the presence of Key Employees as a valuable asset, increasing the likelihood of loan approval and favorable terms.
  3. Key Employees with military service, either as a veteran or as a current member of the National Guard or Reserves, may also be eligible for additional VA benefits. These can include education and training assistance, disability compensation, and health care services, among others.


The term “Key Employee” is important in the context of VA benefits because it refers to a crucial staff member in a company who possesses specialized skills, knowledge, or abilities that are vital to the organization’s operations and success.

In case of a service-disabled veteran-owned small business (SDVOSB) or a veteran-owned small business (VOSB), a key employee may be a veteran whose expertise and active involvement is essential for meeting the qualifications for government contracts and other special programs designed to support veteran entrepreneurs.

Their presence in the business contributes significantly to maintaining the organizational structure, decision-making process, and overall control, ensuring the business can continue receiving VA benefits and maintain its status as a preferred business entity in the eyes of government agencies.


The concept of a Key Employee in the context of VA benefits plays a significant role in ensuring the smooth functioning and stability of a veteran-owned small business. The principal purpose of recognizing Key Employees is to maintain continuity in business operations and to provide assurance that a business continues to meet the VA’s eligibility requirements particularly in relation to the ownership and control criteria.

By identifying and supporting these critical personnel, the VA aims to facilitate the growth and success of veteran-owned businesses, ultimately benefitting the veterans themselves and contributing to their economic well-being after serving the nation. Key Employees are generally individuals who possess specialized skills, knowledge, or expertise that is integral to a company’s operations and overall success.

They might be responsible for critical decision-making tied to the company’s financial health, daily management, or strategic direction. The VA considers the contributions of these employees to be invaluable to the success of the business, and thus, supports their retention and growth through various programs and resources.

By focusing on the retention and development of Key Employees, the VA seeks to ensure veteran-owned businesses remain competitive and prosper in their respective markets, paving the way for increased employment opportunities for veterans and a strengthened economy overall.

Examples of Key Employee

The term “Key Employee” in the context of VA Benefits typically relates to the Vocational Rehabilitation and Employment (VR&E) program, which supports disabled veterans seeking education, training, and job opportunities. A Key Employee is an individual who plays a vital role in the organization, possessing specialized skills, knowledge, or expertise. These employees contribute significantly to the success and financial stability of the business.Here are three real-world examples of Key Employees in different industries:

Health Care Industry: A Key Employee in a hospital setting could be a doctor or surgeon with specialized medical knowledge and skills. For example, a neurosurgeon who has an extraordinary success rate and attracts new patients to the hospital through their exceptional reputation. Losing this employee could impair the hospital’s ability to provide specialized care to patients and impact the organization’s financial stability.

Technology Industry: A Key Employee in a tech company may be a lead software engineer who has been instrumental in the development of a profitable software product, having unique programming knowledge and expertise. This individual might manage and train a team of junior engineers, ensuring they adhere to the company’s high standards. If this lead engineer were to leave the company, it could significantly disrupt the development process of future software products, thus affecting the organization’s financial position.

Retail Industry: A Key Employee within a retail company might be a regional manager responsible for overseeing the success of multiple store locations in a given area. Their understanding of the local demographics, managerial experience, and ability to formulate effective marketing strategies contribute to the company’s growth and profitability. Losing this regional manager could lead to decreased sales, poor decision-making within the region, and a weakened financial position for the company.

FAQ: Key Employee VA Benefits

1. What are the key employee VA benefits?

Key employee VA benefits consist of a range of financial compensation, education and training programs, health care, and other services specifically designed to support eligible veterans employed in key positions within an organization. These benefits may include tuition assistance, vocational rehabilitation, and extended healthcare coverage, among others.

2. Who is considered a key employee?

A key employee is an individual who holds a critical position within a company or organization, making significant contributions to its success. Key employees are often those with specialized skills, technical expertise, or high-level decision-making responsibilities.

3. How do I determine if I qualify for key employee VA benefits?

To determine if you qualify for key employee VA benefits, you must first confirm your eligibility as a veteran who has served in the U.S. Armed Forces. You must also demonstrate that your employment position meets the criteria for a key employee role within your organization. For detailed eligibility information, consult your organization’s human resources department, or contact the U.S Department of Veterans Affairs (VA).

4. Where can I find more information on key employee VA benefits?

You can find more information on key employee VA benefits by visiting the U.S Department of Veterans Affairs website, contacting your organization’s human resources department, or reaching out to veterans service organizations that offer resources and guidance on VA benefits for key employees.

5. Are there any specific programs or services available for key employees?

There are several programs and services offered by the VA and other organizations specifically tailored to key employees. For example, the VA may provide tuition assistance for continuing education and vocational rehabilitation services aimed at enhancing workplace skills. Employers partnering with the VA may also offer incentives and support programs to help key employees succeed in the workplace. For more information on these programs, consult your organization’s human resources department and speak with a VA representative.

Related VA Benefit Terms

  • Disability Compensation
  • Vocational Rehabilitation
  • 3.

  • Educational Benefits
  • 4.

  • Service-Connected Life Insurance
  • 5.

  • Pension Benefits

Sources for More Information

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