Seniority, defined broadly, means the length of service with an employer. Historically, those who had more experience with a task or in a job position managed those with less experience. Formal seniority policies grew out of this natural state of affairs. Based on an employee's seniority, preference can be accorded him or her in such areas as promotion, transfer, shift assignment, scheduling, vacation accrual, layoff, and recall after temporary layoff. Seniority is used as a means of gauging the relative status of one employee with respect to another based on length of service. As an employee's seniority grows, he or she accrues certain rights and privileges.
How exactly seniority is defined will differ from company to company. Some will track longevity without concern for the position worked while others will restart the clock every time an employee changes positions within the company. For some companies, seniority measurement is indifferent to whether an employee holds a part-time position or a full-time job. Other companies only measure seniority based on time worked in a full-time position. What all seniority calculations have in common is that they measure, in some fashion, an employee's longevity with a company. Collective bargaining agreements usually calculate seniority by total length of service, sometimes with consideration for length of service within a particular craft or department.
The rights that accrue to senior employees also differ from company to company. Seniority may be used in making determinations about the order in which to hire back from a layoff list. It is often used to allocate vacation time providing those with more seniority a greater number of vacation days. It may also be used to determine pay in organizations instead of or in addition to a merit-based pay system. If organizations do not pay employees on the basis of doing the same work and holding the same level or rank in the organization, they must determine a basis to make a pay distinction or differentiation. In a large organization, compensation specialists within the human resources area may make these determinations and may consider an employee's seniority in the pay decision.
SENIORITY'S DECLINING ROLE
As the economy has changed over the past 40 to 60 years—shifting from a manufacturing economy to an economy based on services, absorbing large numbers of women into the workforce, and becoming more globally interdependent—expectations of work have changed. In the past it was far more likely that a person would work much, if not all, of his or her career with a single employer. This in no longer the case. As mobility has increased in the workforce, the role of seniority has diminished. Declining union membership as a percentage of the workforce has also contributed to the reduced role of seniority as an important factor in employment decisions.
While seniority was valued in the past, for many people today, the longer you have been with a company, the more your job may be in jeopardy. Technology is cited as a primary reason for this change. Younger workers are perceived as more creative and innovative and may have more relevant educational experiences and training. Just as the product life cycle has shortened, so too has the career cycle of employees. Today job change and diversity of experiences is valued more than seniority. Companies are under great competitive pressure and have less tolerance for employees who are earning in excess of their output, a situation more common among the most senior members of an organization. Today an older employee can be replaced by someone younger earning less than half as much salary.
But will that always be the case? As the influential baby boom generation begins to depart the workforce, most observers see a shortage of skills and a potentially serious shortfall in the supply of labor looming in the very near future. The conclusion of a report on a human resource director's survey, conducted by IBM and reported on in the Economist, states the situation this way: "When the baby-boom generation retires, many companies will find out too late that a career's worth of experience has walked out the door, leaving insufficient talent to fill the void."
In anticipation of this demographic shift, efforts are being made by some foresighted firms to maintain those with seniority and experience. Employees who are reaching retirement age are being encouraged to consider a phased withdrawal from the labor force. The use of job-sharing arrangements and part-time work schedules are two ways that are becoming more common for senior personnel in the stage a phased retirement. These flexible work arrangements allow an employee to ease out of the work habit while providing the company with an opportunity to use the senior employee's skills to train newer employees before the departure of senior employees.
SENIORITY IN JAPAN
Japan has long been known for its cradle-to-grave employment relationship. But, even in Japan things are changing. In the past, the seniority system in organizations was a measure of job security in the employment relationship. Many companies are abandoning traditional employment relationships and no longer offering lifetime employment.
Employment practices in Japan—which were once characterized by seniority, company unions, and lifetime employment—have been undergoing a structural transformation as the nation struggles to cope with an ever more competitive economy. Since the collapse of the Japanese bubble economy early in the 1990s, Japanese companies, like their American counterparts, have been forced to restructure and have adopted a system of determining promotions and salaries based not on seniority but on merit. This has dramatically changed their once-treasured code of seniority, according to Focus Japan.
In addition, just as this happened in the United States, the percentage of workers belonging to labor unions has steadily dropped, eroding the influence of the once-powerful Japanese company unions. Today's younger workers and new entrants to the job market are becoming less interested in the prospect of lifetime employment. As a result, many are considering entrepreneurship and self-employment as a more viable career choice.
see also Age Discrimination; Flexible Work Arrangements; Retirement Planning
"The Growing Mobility of Labor." Focus Japan October 2000.
Munk, Nina. "Finished at Forty." Fortune. 1 February 1999.
"Turning Boomers into Boomerangs—The Ageing Workforce." The Economist. 18 February 2006.
Wyss, David. "The Gathering Pension Storm: Boomers Will Soon Find Their Retirement Kitty Has Been Underfunded. Making up the shortfall with buffet corporations—and the economy." The Economist. 18 February 2006.
Hillstrom, Northern Lights
updated by Magee, ECDI
Precedence or preference in position over others similarly situated. As used, for example, with reference to job seniority, the worker with the most years of service is first promoted within a range of jobs subject to seniority, and is the last laid off, proceeding so on down the line to the youngest in point of service. The term may also refer to the priority of a lien or encumbrance.
A person who holds a lien or has an encumbrance against the property of another, so that her claim must be satisfied before any others, has seniority or priority.
An employee has seniority if he is among those with the most years of service at the place of employment. Such seniority entitles the employee to compete for promotion to jobs for which junior (less senior) employees would be ineligible or would receive less consideration. Traditionally, it also gives him the status of being among the last to lose his job in case of lay-offs.
Scamming the Elderly
Senior citizens are often the victims of street crimes, such as robbery and assault. But they are more often the target of trained con artists who use a variety of techniques to trick senior citizens into giving them money for their fraudulent schemes. Whether it is a promise of a lucrative investment, a free vacation, or a great deal on home repair, senior citizens too often succumb to a variety of scams.
It is estimated that U.S. consumers lose up to $60 billion annually to consumer fraud. An estimated 50 percent of phone scam victims are over the age of sixty-five. Convicted con artists report that senior citizens are more trusting than younger persons. Some commentators attribute this to the fact that today's senior citizens grew up and matured in a society that was less threatening. Nevertheless, a study by the american association of retired persons indicates that the stereotypical victim—a lonely, forgetful, gullible senior—bears little resemblance to the persons who are scammed. Victims are relatively affluent, educated, well-informed, and connected with their communities. Most, however, are not aware that con artists use the telephone to accomplish their fraudulent schemes. They believe that the person on the other end of the phone line is honest and hardworking.
Legitimate telemarketing is big business, generating nearly $460 billion a year in sales. It is estimated that about $40 billion a year is lost to fraudulent telemarketers. The dishonest telemarketers are fly-by-night operators working out of leased space with banks of telephones staffed by trained con artists. Once they steal enough money in a location, they quickly pack up and move to another city, leaving their victims with little chance to reclaim their money.
A common scam involves bogus prize announcements. A senior will receive a phone call and be told that he has won the grand prize in a contest. The senior is told to either buy a product or pay shipping and taxes ranging from $200 to $24,000. When the prize arrives, it turns out to be cheap junk, worth a small fraction of the amount the senior has paid.
Con artists also use junk mail for their fraudulent contest solicitations. One of the scams that is most financially ruinous to a senior, whether it is done by phone or mail, is a "contest" set up in stages. The solicitations announce that the senior is in a select group eligible for a grand prize but that she must send in an entry fee to participate. Once the fee, ranging from $5 to $20, is paid, the process is repeated over and over, as the contest promoters make more solicitations to the senior. Each time the senior "advances" from one stage to another, she must pay a new entry fee. Some seniors have lost tens of thousands of dollars by spending $5 to $20 at a time.
Another phone scam is based on convincing the victim that an extremely profitable business opportunity is available, but only for a limited time. With the promise of becoming millionaires, some seniors have sent thousands of dollars to con artists who give little, if anything, in return.
Fewer than 10 percent of people cheated out of their money report the fraud to authorities. Some seniors are embarrassed or ashamed to report the crime, fearing that they will look foolish for their gullible behavior. Some con artists even keep con games going by threatening to expose seniors to their family and friends.
Another scam plays on the anger and shame of seniors who have been duped by fraudulent telemarketers. A caller offers to help the senior recover the money the senior had paid to other dishonest companies in hopes of receiving a prize. The caller asks the senior to pay a fee ranging from $200 to $800 for this service. The services typically turn out to be worthless.
The "bank examiner" scam has been perpetrated on senior citizens for generations. An elderly person, usually living alone, gets a call from a con artist posing as a bank examiner. The senior is told that the examiner is investigating a bank teller suspected of embezzling money by falsifying withdrawal receipts. The teller gives each customer the amount asked for and steals a small amount with each transaction. The con artist asks the senior to withdraw $5,000 from his savings account and give it to a detective waiting outside the bank. The money, the senior is told, will be used as evidence and returned with a reward. Once the senior hands over the money, he usually never hears from the con artist. Some scams, however, involve a second call and a plea for another $5,000 withdrawal.
Fraudulent home repair services are a bane to all consumers, but seniors are often the victims. A large organized crime group, known by law enforcement agencies as the Travelers, move from town to town. They go into a neighborhood and tell homeowners that they have finished a home repair job nearby and are willing to fix their houses with leftover materials at an extremely low price. These scam artists demand their money up front. Whether it is painting the exterior of a house, fixing a leaky roof, or sealing a drive-way, these con artists do little or no work and are quickly out of town before the homeowners realize they have been tricked.
Because of the growing population of senior citizens, law enforcement agencies have sought to educate seniors about telephone fraud and other common scams. Pamphlets distributed to senior citizens and community programs tell seniors to hang up the phone if they are pressured to part with their money and to toss the "you've won a prize" mailing in the wastebasket.
In the 1984 case of Firefighters Local Union No. 1784 v. Stotts, 467 U.S. 561, 104 S. Ct. 2576, 81 L. Ed. 2d 483, the Supreme Court upheld the validity of a seniority system that protected the jobs of white firefighters with seniority at the expense of recently hired black firefighters. The fire department in Memphis, Tennessee, implemented the traditional seniority principle of "last hired, first fired." In 1981 three white fire-fighters who otherwise would have kept their jobs under the system were laid off for a month while minority firefighters with less seniority continued working. This change in the seniority system resulted from an injunction to enforce consent decrees that resolved equal employment opportunity cases in Memphis. The lower court fashioned the decrees to remedy the past discriminatory practices of the fire department in its hiring and promotion of minorities. The district court concluded that the seniority system was not a bona fide one under section 706(g) of Title VII of the civil rights act of 1964 since lay-offs made pursuant to it would have a racially discriminatory effect. The court, therefore, directed the modification of the system to increase and maintain the percentage of black firefighters. The court of appeals affirmed the revision of the seniority system but disagreed with the holding that the system was not bona fide.
On certiorari, the Supreme Court decided that the district court exceeded its authority in issuing the injunction that ultimately led to the lay-off of the senior white firefighters. The injunction was not a proper remedy. There was no finding that any of the black employees protected by the revised system had been a direct victim of discrimination, a requirement imposed by the Court in International Brotherhood of Teamsters v. United States, 431 U.S. 324, 97 S. Ct. 1843, 52 L. Ed. 2d 396 (1977). The Court, however, did not decide whether the consent decree was valid or whether the Memphis Fire Department could, on its own, protect the jobs of black firefighters at the expense of their white colleagues who had more seniority.