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Paying back bonuses after leaving!

 
forum comment
#0 Paying back bonuses after leaving!
 
OnlyMe
25.07.11 00:00
 
Has anyone here been asked to repay their bonuses after resigning a company?I have been receiving a ‘Hot Skill Bonus” for a year or so, these are paid on a quarterly basis – and assuming you met the various performance criteria, and always paid at the end of the three month period. I have now left the firm, however, been asked to pay back the bounus from the last quarter.The company in question did make me sign a agreement in which there was a clause suggesting that I would need to pay the money back, however, as the payments were always based on contributions already made (i.e. July payment covers the period April, May and June) – I was wondering if it was fair to ask for the whole payment back even though I left in mid July? Any advice?
 
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forum comment
#0 RE: Paying back bonuses after leaving!
 
Tony Restell (Top-Consultant.com)
25.07.11 00:00
 
We've seen this used as a retention mechanism over the last 12-18 months, as employers can assume most staff will not put these bonuses into a "rainy day" pot but will actually go and spend them. The effect of this - as you state from your contract - is that employees are then put in the position of needing to pay back a bonus that's been received, which they may or may not be in a position to do; and certainly the mere fact that you're going to lose out on money you've earnt is a disincentive to leaving for many people. Pretty sure I've heard of cases where staff would have to pay back up to 12 months of past bonus...From the employer perspective I think the argument will be that they are paying this bonus to retain those with "hot skills" and so it's a bonus for the fact that you've chosen to stay with the firm as much as it is for past performance. Hence once you choose to leave you're no longer entitled to what is essentially a retention bonus.I'll leave commenting on the rights and wrongs of this to other people, but I will say I would be surprised if this clause wasn't enforced as it would then set the precedent that others could leave and get to keep some or all of their bonus too - which would totally undermine its function as a retention tool...Sorry to be the bearer of bad news.Tony RestellTop-Consultant.com
 
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forum comment
#0 RE: Paying back bonuses after leaving!
 
OnlyMe
26.07.11 00:00
 
Thanks Tony, useful to know.
 
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