Putting Your Time In

by Jessica Sullins

Employees place great importance on the amount of time they have worked for their employer. Likewise, many companies base vacation time and other benefits on the employee’s seniority.

Determining seniority is straightforward unless an employee either leaves and returns or is laid off and returns. When this happens, the employer must decide whether the employee’s previously worked time will count toward benefits accrued.

The survey says:
According to AAIM Employers’ Association’s 2017-2018 Policies and Benefits Survey of 95 St. Louis and Central Illinois businesses, 91% of companies count seniority toward vacation accrual and only 43% of companies count seniority toward holiday pay eligibility when an employee who previously quit has returned.

What to consider:
• Consistency. A company has flexibility in administering benefit accruals for an employee who leaves and then returns. What is important is that the company remain consistent with employees in similar situations. Once the policy is determined, it is important for the employer to put it in writing and communicate it to employees.
• Check with benefit plans. With benefit plans that are regulated, such as retirement plans, it is important to check with the plan administrator to see how the plan is written for employees in these situations. Every plan is unique and may have specific guidelines for these situations.

Jessica Sullins, PHR (solutions.team@aaimea.org) is on the Research and Solutions Team for AAIM Employers’ Association, which helps Missouri and Illinois companies manage their people and processes.