What is longevity pay?

Sometimes it is also used to reward an employee's loyalty to a company and to help ensure an employee's satisfaction.

Longevity pay is normally restricted to full-time employees. Again, often to praise, encourage, and support a company's top performers. Most longevity pay programs cap out at around 40 years.

The amount of longevity pay can be determined by a number of factors, including industry and job title. Typically, employees have to work at a company for several years before possibly getting longevity pay.

It also can differ from employee to employee. For instance, an employee that has been with a company for 5 years may get one amount, while an employee that has been at the same company for 10 years may receive double the former's amount.

Another option in determining longevity pay is basing it on a percentage of the employees salary. This may be based exclusively on the employee's annual salary or include bonuses and other forms of compensation. Certain cases of longevity pay can also have wage caps on specific job titles.