What are seniority payments?
They are a supplement to the monthly salary with the purpose of valuing the employee's permanence in the company or in a certain professional category without the possibility of promotion. Seniority payments are based on seniority, according to article 262 of the Labor Code .
Who is entitled to seniority benefits?
Workers are only entitled to seniority benefits if this is stipulated line database the individual or collective employment contract (CCT) or established by the Collective Employment Regulation Instrument (IRCT). To receive seniority benefits, they must remain in the same professional category or profession for a certain period of time, usually 3 years. If the worker earns more than the salary table for their category, they are not entitled to seniority benefits. And when do they receive seniority benefits? The worker receives the amount to which they are entitled together with their monthly salary.
Seniority benefits may be withdrawn in the following circumstances :
If the worker changes profession or professional category;
If the worker has a salary higher than that stipulated in the professional category tables.
Note : the minimum salary table can be found in Ordinance No. 210/2012 of 12 July.
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How to Calculate Seniority Allowances?
To calculate seniority benefits, it is necessary to consult what is established in the individual employment contract or Collective Labor Regulation Instruments, with a certain value being assigned for each specific period of years , with a maximum ceiling on seniority benefits. For example:
after 3 years of work in a certain professional category, the worker receives X more value;
after 5 years of work in a certain professional category, the worker receives more X+Y;
after 10 years of work in a certain professional category, the worker receives more X+Y+Z.
Seniority payments and other amounts set based on seniority are part of gross remuneration. They are therefore subject to Social Security contribution rates. They are also taken into consideration as a basis for calculating supplementary benefits (e.g. Christmas bonus) and in situations of compensation for termination of employment contracts.
