Longevity Pay

Title

Longevity Pay

Introduction

Purpose

The longevity pay plan recognizes and expresses the University's appreciation for the long-term service of permanent employees, both full-time and part-time (regularly scheduled to work 20 hours or more each work week) who have completed at least 10 years of Total State Service.

Scope of Applicability

Who and or what the Policy applies to: Lists groups who must know and adhere to the Policy

Policy

Policy Statement

Service Requirements

Longevity pay (full or pro-rata) is based on Total State Service and is computed as a percentage of the employee's base annual salary at the date of eligibility.

A break in service as a result of leave without pay delays the payment for longevity by the months represented by the non- pay status. (Workers' compensation leave and military leave do not represent breaks in service.)

Service toward longevity is credited for each month in which an employee is in pay status for one-half or more of the regularly scheduled work days and paid holidays in the month. Credit also is given for:

  • other governmental units which are State agencies;
  • authorized military leave and subsequent reinstatement according to policy; and
  • employment with the Agricultural Extension Service, Community College system, a public school system for the entire school year, local divisions of the Department of Human Resources, and the General Assembly (except legislators, pages, and interns).

Full Longevity Payment

Longevity is paid annually. The amount is computed by multiplying the eligible employee's base annual salary by the appropriate percentage (see table below) and is rounded to the nearest dollar:

Years of Total State Service Longevity Pay Percent
Years of Total State Service Longevity Pay Percent
  • 10 but less than 15 years
1.50
  • 15 but less than 20 years
2.25
  • 20 but less than 25 years
3.25
  • 25 or more years
4.50

Longevity pay is made in a lump sum and is subject to statutory deductions. It is not considered a part of base annual pay for classification, other pay or records purposes.

Full longevity pay is paid by separate check to an eligible employee on the payday for the pay period in which his/her eligibility date occurs and annually in succeeding years.

Transfers, Reinstatement & Terminations

An employee who transfers to another State agency or University is paid by the receiving agency on the eligibility date.

An employee who separates and receives a prorated longevity payment and is reinstated must complete additional service to total 12 months before receiving the balance of longevity; the balance is based on the employee's current salary.

If an employee separates before the date of the annual longevity payment, longevity pay is awarded on a pro rata basis.

Pro-Rata Longevity Payment

Pro rata longevity is calculated by taking 1/12 of the annual percentage amount for each month since his/her last annual longevity payment through the date of the status change. The employee must have been in pay status for one-half or more of the regularly scheduled work days and paid holidays in the month for the month to count toward this amount. No longevity pay is awarded for any period covered by terminal leave pay.

Pro rata longevity is computed as full longevity pay, except if an employee has a fraction of a year toward the next higher percentage rate, the pro rata payment is based on the next higher rate. It is paid to the nearest cent.

If an eligible employee goes on extended military leave without pay, a longevity payment computed on a pro rata basis shall be paid the same as if the employee is separating. The balance will be paid when the employee returns and completes a full year.

If an employee goes on leave without pay, longevity shall not be paid until the employee returns and completes the full year. If, however, the employee should resign while on leave without pay, the pro rata amount for which the employee is eligible is paid.

Exceptions are as follows:

  • An employee going on leave without pay due to short-term disability may be paid the pro rata amount for which the employee is eligible.
  • An employee going on extended military leave without pay shall be paid the pro rata amount for which eligible. An employee on workers' compensation leave shall be paid longevity as if working.

Salary increases effective on the longevity eligibility date are incorporated in base pay before longevity is computed.

Calculation of Pro-Rata Longevity

To calculate pro-rata longevity, refer to the following formula:

(Annual salary at time of separation) x (longevity %) x (# of months now eligible / 12)

Example 1
Employee's TSSD is 2/1/93 and annual salary is $28,362. Last longevity payment received was in February 2003. Employee is terminating university/state employment on November 30, 2003. Calculation is as follows:
$28,362 x 1.5% x 10/12 = $354.53

Example 2
Employee's TSSD is 2/1/93 and annual salary is $28,362. Last longevity payment received was in February 2003. Employee is terminating university/state employment on November 10, 2003. Calculation is as follows:
$28,362 x 1.5% x 9/12 = $319.07

Notes:

  • Pro-rata longevity is rounded to the nearest cent. It is not rounded to the nearest dollar like full longevity.
  • When calculating pro-rata longevity, do not round until the end of the calculation. At that time, you can round to the nearest cent.
  • Because full longevity is rounded to the nearest dollar and pro-rata longevity is not, you cannot use the full longevity amount in the pro-rata longevity calculation.
  • If an employee was in pay status half or more of the working days and holidays in that month, then they earn credit for that month (see example 1).
  • If an employee was not in pay status for half or more of the working days and holidays in the month, they do not get credit for that month (see example 2).
  • Be sure to include the month in which the employee received his or her last full longevity check when calculating the number of months towards the pro-rata payout.
  • Comments section should include the calculation method used by the department.
  • It may be useful to pause the termination workflow until the pro-rata longevity payout is approved by the HR Records and Information unit. If you complete the termination workflow and your pro-rata longevity payout is not approved, you will have to submit a hard copy PD-105 to complete the pro-rata longevity payout.

Implementation

Full longevity payments are initiated and processed by Payroll Services as part of the payroll process. Pro rata longevity payments are initiated by the operating department.

Resources

Contact Information

Policy Contact

Policy Contact Information Table
Address Phone Number Email

Office of Human Resources

104 Airport Drive, CB #1045

Chapel Hill, NC 27599

(919)843-2300 hr@unc.edu
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Details

Article ID: 131776
Created
Thu 4/8/21 9:16 PM
Modified
Thu 5/5/22 8:21 PM
Effective Date
If the date on which this document became/becomes enforceable differs from the Origination or Last Revision, this attribute reflects the date on which it is/was enforcable.
04/06/2017 12:00 AM
Issuing Officer
Name of the document Issuing Officer. This is the individual whose organizational authority covers the policy scope and who is primarily responsible for the policy.
Issuing Officer Title
Title of the person who is primarily responsible for issuing this policy.
Associate Vice Chancellor, Human Resources
Last Review
Date on which the most recent document review was completed.
04/06/2017 12:00 AM
Last Revised
Date on which the most recent changes to this document were approved.
04/06/2017 12:00 AM
Origination
Date on which the original version of this document was first made official.
01/01/1961 12:00 AM
Responsible Unit
School, Department, or other organizational unit issuing this document.
Office of Human Resources