Longevity Pay Law and Legal Definition
Longevity pay The amount of annual longevity pay is usually a percentage of the employee's annual rate of pay on the employee's anniversary date. The annual rate of pay may not include bonuses, or pay for extra duties. The percentage is determined by the length of total service.
It is a wage adjustment based on length of service or seniority. It is frequently made at specified intervals, particularly where the adjustment is in a wage rate range, that is, where a minimum and maximum exist and where the longevity pay is adjusted periodically until the maximum rate for the job is reached. Contracts frequently spell out the procedures for automatic progression and will contain the criteria or consideration for their movements.