Benefits based on seniority in the company

Published on 13/03/2024

Benefits based on seniority in the company

Published on 13/03/2024
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Benefits based on seniority in the company

The seniority of an employee in a company is a right for each of them and is not vulnerable. This means that all workers have a determined period of time calculated based on the duration of the employment contracts they have signed in their working life.

The duration of these contracts is not only important from an economic perspective, as it can have different benefits in other labor aspects. In this post, you will discover all the benefits of seniority in companies and everything you need to address the topic.

Types of benefits based on seniority in the company

A company can employ different strategies to motivate and incentivize its employees by offering various benefits. Incentives can be economic or non-economic:

Economic

– Commissions: Given when employees meet expected objectives or productivity levels.

– Bonuses: Usually periodic, for holidays, Christmas, incorporation, or seniority.

– Salary increases: Based on each worker’s achievements.

– Job incentives: Payment for different courses or activities for employee career development.

Non-economic

– Flexibility

– Health insurance

– Training

– Leisure

– Travel and/or experiences

– Team-building activities

What is company seniority?

Company seniority is the period of time that an employee has been with a company since the start of the employment relationship.

This period begins to be computed from the moment the first employment contract is signed, regardless of its type or duration. It usually coincides with the actual working time, but there may be some exceptions that we will see later.

Calculate the seniority of your employees

Calculating the duration of the employment relationship with a company is usually an easy task if the established contract is firm and we do not change companies frequently.

To know the period of time a worker has been with the company, you can refer to the payroll, which will show their seniority. If you don’t have the payroll, you can check the current employment contract and see the employee’s joining date.

In the case of signing different employment contracts, changing jobs frequently, and other labor situations, it is normal to have doubts about whether seniority changes or not and how to know when it adds up.

Employment contracts

All employment contracts signed by a worker will be used to calculate seniority, regardless of whether they are temporary, internship, or training contracts.

On the contrary, work done through internship contracts or as interns, through a university degree or master’s agreement, will not be considered for seniority.

Leaves, permissions, and leaves of absence

Regarding leave or permit periods, as long as they are not voluntary, they count towards an employee’s seniority. The same applies to absences due to incapacity, maternity, or paternity.

Change of company name and substitutions

If a company changes its name, shareholders, or if there is a change of department within the same company, the seniority of the workers remains unaffected by these events.

Benefits based on seniority in the company

As we’ve seen before, seniority in the workplace can provide not only economic benefits to employees but also social advantages.

While these benefits may not be applicable to all companies, we believe they can significantly influence an employee’s situation and contribute to their overall job satisfaction.

Enhanced compensation, retirement, or sick leave

When concluding the employment relationship, factors like seniority are considered in determining the compensation for severance, sick leave, or retirement. Longer work history often leads to more favorable conditions in these scenarios.

Seniority bonus

A monetary percentage added to an employee’s base salary based on their time with the company. This bonus, not covered by the Labor Statute, is typically regulated by the applicable collective bargaining agreement for each employee.

Increased chances of career advancement

While not the sole determinant for job promotions, seniority can be a factor considered by some employers and group leaders. Extensive work experience may be seen as an asset, making an employee more qualified for higher-level positions.

Job retention

In times of downsizing or staff reduction, employers often prioritize retaining experienced workers. Seniority can play a crucial role in job preservation, although achievements and performance during the employment period are also significant.

Preference in choosing vacation days

Many companies offer longer-tenured employees the opportunity to select vacation days before those with less seniority. This non-monetary benefit serves as a recognition and personal reward for the employee.

Stock ownership

Some companies allow their longstanding employees to become shareholders by purchasing company stocks, providing them with a stake in the organization.

Leaves and sabbaticals

While this varies among companies, in certain cases, the likelihood of obtaining a leave or sabbatical may be influenced by an employee’s seniority. Greater experience often establishes a stronger bond with the employee, leading to occasional exceptions for extended leaves.

Can seniority be lost in a company?

Seniority in a company is not lost; it stops being counted as work history when the employment relationship is terminated, either through dismissal or the expiration of the established employment contract.

Typically, if the gap between contracts is less than a month, it may not be considered a break in the employment relationship. However, for longer intervals, seniority may not be retained, and it could restart from zero. Current legislation doesn’t establish a specific minimum or maximum timeframe; instead, these cases are determined through corresponding judicial resolutions.

Nevertheless, the durations considered to reset seniority are becoming increasingly extended in contemporary legal interpretations.

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