Is the Seniority Bonus Mandatory in the Company?

To move forward in your professional life, there is nothing better than to have modest and easily achievable daily goals in mind. There is surely a little something that you can do to reconnect with your deepest aspirations and boost your professional life.

You have been working for several years in the same company? Do you think you are entitled to a seniority bonus? This additional remuneration is not provided for by the Labor Code, but many companies reward the loyalty and professional investment of their employees with certain benefits or in monetary terms by granting them a seniority bonus.

This bonus may also result from the application of a collective agreement. Is the seniority bonus mandatory between companies? The point in our article.

What is the seniority bonus?

The seniority bonus is an exceptional bonus that certain employees who have been working for a long time within the same company benefit from. Most often, this salary benefit consists of a monthly additional remuneration, the amount of which increases over the years, in proportion to the employee’s seniority in the company.

As it is a salary supplement that the employee receives in addition to his basic salary, the seniority bonus must be mentioned on the payslip when it is paid. It is subject to social security contributions and income tax.

Is the seniority bonus mandatory?

The seniority bonus is not provided for the Labor Code. It is an optional bonus that companies are not legally required to provide for their employees.

However, the employer is obliged to pay a seniority bonus when this benefit has been introduced within the company. The obligation to pay a seniority bonus may result from :

• the employee’s employment contract ;
• another contractual agreement (company agreement, collective agreement)
• a company practice.

An employee who is entitled to a seniority bonus but does not receive it may appeal to the industrial tribunal to contest the employer’s refusal and receive what is due.

What are the conditions for obtaining the seniority bonus?

To find out if you are entitled to a seniority bonus, check that the conditions are met.

Important: any seniority bonus must be based on fixed and identical allocation and calculation criteria for all employees working under the same working conditions.

The employer may not arbitrarily give certain employees an advantage over others, at the risk of committing discrimination, which is formally prohibited for the Labor Code.

Work for a company that pays a seniority bonus to its employees or to a category of employees to which you belong.

Check that your company rewards the seniority of its employees by paying a bonus. The seniority bonus may result from your collective agreement or may have been granted by the decision of your employer (employment contract, company agreement, usage).

If you have to prove the existence of a custom to require your employer to pay a seniority bonus, you must establish that the payment of a seniority bonus in your company constitutes “a general, constant and fixed practice”.

According to case law, in order to become a custom, the seniority bonus must :

• be paid for at least 3 years (constant practice) ;
• concern all employees or certain precisely identifiable categories of employees (general practice);
• be calculated in the same way each year (fixed practice).

Important: since the seniority bonus may only concern a category of employees, check that you are concerned by your position and your contractual conditions.

Condition to obtain the seniority bonus: justify the required seniority

The seniority bonus is generally paid after several years of work in the same company. Consult your employment contract and/or the collective agreements applicable to your company to find out the minimum seniority required to qualify for a seniority bonus. Many collective agreements provide for minimum seniority of three or four years.

In principle, your seniority starts on the first day of your hiring but the calculation of the seniority can be :

• increased by a resumption of seniority (if you had previously worked for the same employer);
• reduced by a suspension of your employment contract (taking parental leave or sabbatical leave, sick leave, etc.).

How is a seniority bonus calculated?

The exceptional seniority bonus can be paid monthly or annually.

To find out how to calculate the amount of your seniority bonus, refer to the clause in your employment contract or the scale in the applicable collective agreement.

The seniority bonus can be paid as a lump sum that is the same for all employees with the same seniority. In other situations and in my majority of situations, the seniority bonus is calculated :

• on the basis of the employee’s net or gross salary, or on the basis of the minimum salary imposed by the collective agreement ;
• on the basis of the employee’s working time or attendance time.

The amount of the seniority bonus is generally capped after 15 years of service.

Good to know: the amount of the seniority bonus is taken into account for the calculation of the right to paid vacations and in case of salary maintenance. However, it is not included in the calculation of overtime pay.