843 Longevity Pay
Approved by President
Effective Date: June 5, 2017
Responsible Division: Business and Finance
Responsible Office: Human Resource Services
Responsible Officer: Assistant Vice President, Human Resource Services
This policy establishes the process regarding longevity pay for employees of Middle Tennessee State University (MTSU or University) in accordance with T.C.A. § 8-23-206.
The 89th General Assembly of the State of Tennessee adopted a longevity pay plan to reward State employees for extended service to the State. Its continuation each year is subject to positive action by the State Legislature.
Upon completion of thirty-six (36) months of service, all regular full-time faculty, clerical and support staff, administrative/professional employees, and modified fiscal year (MODFY) employees are eligible for longevity payments.
A. In addition, all regular part-time employees who are scheduled to work one thousand six hundred (1,600) or more hours (82.1% time) in a fiscal year and have thirty-six (36) months of service, are also eligible for longevity payments. Refer to Section V. B. of this policy for additional information regarding credit for part-time service.
B. The thirty-six (36) months of qualifying service must be in an eligible status as defined in Section V.B. of this policy.
C. For purposes of creditable service for longevity payments, the service base of employees in faculty, MODFY, or eligible regular part-time appointments shall be considered to be a full twelve (12) months.
A. Eligible employees shall receive longevity pay at an established rate for each year of creditable service up to the maximum provided by law.
1. The rate per year of service is established annually by the Legislature.
2. For employees who completed fifteen (15) years of creditable service prior to July 1, 1984, September 1 shall be their longevity anniversary date.
3. All other employees who have three (3) years or more of creditable service shall receive their longevity payments in conjunction with their longevity anniversary date and in accordance with MTSU payroll procedures.
B. Calculation of longevity pay is based on an employee's total years of eligible full-time service and eligible part-time service and the rate of pay in effect for the fiscal year in which the payment is made. The rate of pay per year of service is one hundred dollars ($100.00), with a maximum payment of three thousand dollars ($3,000.00).
C. The following describes longevity provisions for non-exempt employees under the FLSA.
1. The method of paying overtime on longevity became effective with the coverage of non-exempt state employees by the Fair Labor Standards Act (work week of April 15, 1986) and applies only to that portion of the employee's longevity work year after that date.
2. The value of longevity pay is not included in the week-to-week calculation of regular hourly rate for overtime payment purposes.
3. But, when longevity pay is given, one-half (½) the hourly equivalent rate of the longevity payment is due for all premium overtime hours earned during the prior year of service for which the longevity payment is made.
a. For example, a non-exempt employee worked 2,150 hours during the year, including 100 hours of premium overtime, and received a $750.00 longevity payment.
b. The overtime due on the payment would be $750.00 divided by 2,150 hours = $.348 hourly equivalent time, ½ = $.174 per hour times 100 premium hours = $17.40 additional overtime longevity payment.
D. Longevity pay is subject to Federal Withholding Tax and Social Security taxes.
1. MTSU uses Option B- IRS Circular E - Supplemental Wages to determine the Federal Withholding Tax.
2. The Social Security Tax is assessed at the prevailing rate.
E. The gross dollar value of the longevity payment is considered as covered salary for purposes of calculating retirement benefits.
V. Longevity Service Credit
A. Adjusted Longevity Anniversary Date
1. The adjusted longevity anniversary date shall be that date on which thirty-six (36) months of creditable regular state service is completed.
2. A longevity anniversary date is established for all employees who are eligible or potentially eligible to participate in the program.
3. At the time of initial employment, the employee's longevity anniversary date is established, utilizing all periods of prior eligible service with the State or one of its agencies or a state institution of higher education.
4. It is the employee’s responsibility at the time of employment to advise Human Resource Services of any prior service that may be eligible for longevity service credit. If the employee does not indicate prior service, the longevity anniversary date is the same as the initial employment date.
B. Eligible Service
1. The following types of service are considered eligible service when establishing an individual's adjusted longevity anniversary date:
a. All regular full-time service with a state institution of higher education or Tennessee Government to include agencies, offices, departments, or other subdivisions of the Executive, Judicial, or Legislative branches.
b. All regular full-time service of thirty-six (36) months and prior regular part-time service that is the equivalent of five (5) years of regular full-time service with any of the organizations listed above. Credit for such prior part-time service is prospective only.
2. All regular part-time service in which the employee was scheduled to work one thousand six hundre (1,600) or more hours in a fiscal year with any of the organizations listed above.
3. Periods in which regular part-time employees work additional hours, resulting in a fiscal year work schedule of one thousand six hundred (1,600) or more hours. (See Section V.B.11.)
4. Eligible temporary service with any of the organizations listed in Item 1 above, which immediately precedes the regular full-time service.
a. Eligible temporary service includes all part-time temporary service that is the equivalent of five (5) years of full-time service which immediately precedes regular full-time service.
b. Credit for eligible part-time service will be given when thirty-six (36) months of regular full-time service has been rendered and will be prospective only. It is the employee’s responsibility to request review of part-time service to determine eligibility for longevity credit.
5. Periods during which the employee is in an approved paid leave status.
6. Periods during which a normally eligible employee is working a temporarily reduced work schedule of not less than fifty percent (50%) of full-time and for a period not to exceed six (6) months.
7. Periods during which the employee is on leave of absence without pay and is receiving compensation from the State Board of Claims for an on-the-job injury or illness.
8. Any employee otherwise eligible who is on military leave.
9. Periods during which an employee is on an approved grant-in-aid.
10. Periods during terminal leave status.
11. Employees currently eligible for longevity pay who have prior part-time service consisting of at least one thousand six hundred (1,600) hours annual schedule shall receive longevity credit for each month of such part-time service in which the employee was scheduled to work a full month and actually worked one-tenth of one (1) hour more than half the schedule.
12. Regular employees may receive longevity credit for adjunct faculty service if the following conditions apply:
a. The employee's work schedule for the fiscal year consisted of the equivalent of one thousand six hundred (1,600) or more hours. Effective July 1, 1999, equivalent hours shall be calculated for each semester/quarter and then added together to obtain the total equivalent hours for the fiscal year. The following formula will be used to determine the equivalent hours: semester/quarter hours taught x 2.5 x number of weeks in semester/quarter = clock hours.
b. The adjunct faculty service immediately preceded eligible regular service.
c. Eligible employees included in Section V.B.3, V.B.4, and V.B.5 shall receive their longevity payment as normally scheduled.
d. Eligible employees in Section V.B.6 and V.B.7 shall receive their longevity payment upon returning to an active payroll status with MTSU.
C. Ineligible Service
1. The following types of service are not considered as eligible service when establishing an individual's longevity anniversary date:
a. Part-time service (except as specified in Sections I, II, and V. B.9.) or service as a student employee.
b. Temporary service unless such service is full-time and immediately precedes regular full-time service.
c. Service with elementary or secondary (K-12) public schools.
d. Periods during which the employee is on FMLA or non-FMLA leave of absence without pay except when the employee is on approved leave of absence without pay due to an on-the-job injury or illness and where the employee is receiving benefit payments from the State (as in Section V.B.5. above).
e. Services rendered in addition to the employee's regular duties, including the services of faculty for teaching summer school do not qualify as eligible service.
2. Although such periods of service may immediately precede regular full-time service, they cannot be counted as eligible service in establishing the employee's adjusted longevity anniversary date.
3. Exception: Such service is included only if it is combined with other regular or adjunct service in the same fiscal year to determine the employee's eligibility for an adjustment under Section V.B.3. or V.B.12.
D. Rehiring Previous Employees
1. When employing individuals with prior State service, the employee's adjusted longevity date will be established utilizing all eligible prior service.
2. The adjusted longevity date will be used to initiate payments for current and subsequent fiscal years.
3. It is the employee's responsibility at the time of re-employment to advise Human Resource Services of prior eligible service for longevity credit.
E. Transfers. Employees who transfer from one State agency to another, without a break in service, are eligible for longevity compensation in accordance with their adjusted anniversary month.
VI. Changes in Employment Status
A. Employees who change from regular part-time service of less than one thousand six hundred (1,600) hours in a fiscal year, temporary or student status to regular full-time status, or eligible regular part-time status, become eligible to participate in the longevity pay plan.
B. Employees who change from regular full-time or eligible part-time positions to regular part-time service of less than one thousand six hundred (1,600) hours in a fiscal year and are in the regular part-time status of less than one thousand six hundred (1,600) hours at the time of their longevity anniversary date will not be eligible for longevity payments.
C. Eligible employees on an academic year pay base changing to a fiscal year pay base shall be eligible to continue receiving longevity payments and shall receive no change in service credit as a result of the transfer.
D. Eligible employees on a fiscal year pay base changing to an academic year pay base shall be eligible to continue receiving longevity payments and shall receive no change in service credit as a result of the transfer.
A. Eligible faculty, other than those in Section III., whose anniversary date is the beginning of the academic year shall receive their longevity payment in the last monthly payroll for the contract period.
B. Eligible faculty members, other than those addressed in Section III., whose anniversary date is other than the beginning of the academic year shall receive their longevity payment when the anniversary date occurs in the regular scheduled payroll cycle for that date.
VIII. Leave of Absence
All employees who are on FMLA or non-FMLA leave of absence without pay are entitled to longevity payment on their adjusted longevity anniversary date upon return from said unpaid leave.
IX. Termination of Employment
The following longevity pay regulations apply to persons who terminate their employment for any reason other than retirement:
A. If a terminating employee has completed an additional year of creditable service for longevity payment purposes the longevity payment shall be made. However, no pro-rata payment will be made for a partial year's service.
B. Terminating faculty whose anniversary date is the beginning of the academic year and who are otherwise eligible, shall receive their longevity payment in the final month's payroll for the year’s service provided that the entire academic year was served.
A. Eligible retiring employees may receive their longevity pay if the longevity anniversary date occurs during their terminal leave period.
B. All retiring employees are eligible for longevity pay following the completion of one year of creditable service.
C. Faculty who retire after completing their responsibilities for the academic year are eligible for longevity pay in their final payroll for the academic year.
D. A twelve (12)-month employee with his/her longevity anniversary date as July 1, who plans to retire prior to June 30, must be in active pay status on June 30 in order to be eligible for longevity pay.
Exceptions to the provisions of these regulations may be approved by the President or designee.
References: T.C.A. § 8-23-206.