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When a company is acquired, how is seniority handled among employees?

Laurie Gray's Profile


Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

I was with a large bank from 1992 through 2006. I was involved in approximately six mergers, on both the acquired side and then on the acquirer side. In every case, years of service was counted from the start of your employment with your legacy company forward.

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

Concur with Regis. Some HRIS systems may have two hire dates 1-for the original employment date 2-the date of acquisition. For different benefit programs, other transactions, and reporting, organizations will need to have both dates.

Topic Expert
Dana Price
Title: Vice President, M&A
Company: McGraw Hill Education
(Vice President, M&A, McGraw Hill Education) |

Stock deal always the original hire date. Asset deal, years of service are included, but things like payroll (FICA) have to start over in the year of acquisition. It's usually spelled out in the purchase agreement and many Sellers include language that the benefits are required to be similar for a specific time period (as some purchasers look to change benefits or perhaps change vacation policies and the like).

Topic Expert
Linda Wright
Title: Consultant
Company: Wright Consulting
(Consultant, Wright Consulting) |

Agree with the three respondents thus far. However, I would note that the date of first employment will also usually apply to the determination of severance in the case of redundant staff. Often, there is more staff, post transaction, than are needed and the rules of release need to be transparent and fair.

Topic Expert
Barrett Peterson
Title: Senior Manager, Actg Stnds & Analysis
Company: TTX
(Senior Manager, Actg Stnds & Analysis, TTX) |

It depends in the topic. For benefit plans, the form of acquisition and provisions of the acquisition and an agreements will determine " old company" service. Payroll transfers to be operated by the new owner. Promotions and assignments will be difficult, but are determined, and usually dominated, by the acquring company.


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