Service Credit and Adjusted Date of Hire Policy

vmenghaney08

 

We use an adjusted date of hire policy for sick and vacation purposes and have a put a cap on some one who has gone for more than 3 years as not eligible for this benefit. But our policy does not say anything relating to Service credit. Is it normal for companies/organization to put up a policy on how to calculate service credit and also maintain a cap? Are service credit policies industry?

Let me know your thoughts.

Thanks!

IT HR

Here is what I have done in the past.  If someone was rehired within 5 years then we readjusted their original hire date to reflect the time that they were not with the company.  Here is an example - X was hired on 6/1/05 and terminated on 1/1/08.  X was rehired on 4/1/08. The new adjusted hire date is 9/1/05 because the person was not employed with the company for 3 months.  We would apply this new adjusted hire date (9/1/05) for non-ERISA related benefits (sick, vacation, personal time, and service awards).  The second rehire date of 4/1/08 would be used for eligibility for ERISA related benefits (medical, dental, vision, etc.). 

 

TXHRGuy

Where allowed by law, we only consider current term of service.

HRforME

For retirement (401k and pension) plans, you need to look at the "break in service"/rehire rules in the plan documents for each plan. They can be different than those for other benefits (vacation, medical/dental eligibility, etc)