Bridging of service: Overview, definition, and example
What is bridging of service?
Bridging of service refers to the practice of combining previous periods of employment with a current period of employment to calculate benefits, such as pension eligibility, vacation accrual, or retirement plans. This allows an employee to count their prior service with an employer or a related employer as if it were continuous, even if there was a break in employment. Bridging of service is often applied in situations where employees return to work after a period of absence, such as a leave of absence or a job change within the same company or group.
For example, an employee who leaves a company for a few years but later returns may have their years of service bridged, meaning their prior years of work are counted toward their current benefits or seniority.
Why is bridging of service important?
Bridging of service is important because it ensures that employees are not penalized for breaks in employment when it comes to benefits that depend on length of service, such as pensions or retirement contributions. This practice helps maintain fairness and continuity for employees who may have taken a break for personal reasons, health issues, or career changes. Bridging service periods also encourages employee retention by making it easier for workers to return to a previous employer or re-enter the workforce without losing valuable benefits accrued in prior employment.
For employers, offering bridging of service can help attract experienced workers who might otherwise be hesitant to rejoin a company after a break, knowing they will not lose out on important benefits.
Understanding bridging of service through an example
Imagine an employee, John, worked at a company for 10 years, then took a two-year break. After the break, John is rehired by the same company. The company may offer a bridging of service benefit, meaning John’s 10 years of prior service will be combined with his new employment, allowing him to continue accumulating benefits as if there was no interruption in his employment.
In another example, an employee who worked for one company, then moved to a subsidiary within the same corporate group, may have their service with the original company counted toward benefits at the subsidiary, such as pension eligibility or seniority.
An example of a bridging of service clause
Here’s how a bridging of service clause might appear in a contract or employee benefits policy:
“In the event that an Employee returns to employment with the Company after a period of absence, their prior service with the Company or any affiliated entity shall be bridged for the purpose of calculating eligibility for benefits, including but not limited to pension plans, vacation accrual, and seniority.”
Conclusion
Bridging of service is a beneficial practice that allows employees to combine past periods of employment with their current service to continue receiving benefits and recognition for their previous work. It ensures fairness and continuity for employees who re-enter the workforce after a break, helping them maintain access to valuable benefits such as pensions or retirement plans. For employers, offering bridging of service can enhance employee retention and attract skilled workers who might otherwise be deterred by a gap in service.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.