Pay rise attached to commitment to stay with company?

[ridds]

Is this leagl?

Happening to a friend of mine, they are willing to give them a pay rise providing they commit to say at the company of X many months / years.

If so how is it enfoceable?

[APontus]

Why wouldn't it be?

Sounds like a good deal. Company gets certainty of commitment and the employee gets more money for giving it.

[ridds]

We're talking about a service role here that pays minimum wage.

[APontus]

Why do you think it's a bad thing?

[InitialDave]

ridds said:

We're talking about a service role here that pays minimum wage.

They're not trying to be cheeky and get the commitment out of him for a mandatory minimum wage rise, are they?

[ridds]

Because the person doesn't want to be tied into staying, simple as that.

I've drawn a blank on a pay increase being provided upon agreement to stay. Training etc yes. but a pay rise no.

If it's the done thing then why do not all companies do it, "here's your pay rise, you need to stay for 5 years or we'll claw it back"

[ridds]

InitialDave said:

ridds said:

We're talking about a service role here that pays minimum wage.

They're not trying to be cheeky and get the commitment out of him for a mandatory minimum wage rise, are they?

Worse than that, I think it's sub minimum wage as accommodation is also provided (but also has to be paid for on top).

[BobsPigeon]

I don't imagine anyone is getting sued over leaving a minimum wage job. There probably numerous ways to get sacked when it's time to leave though so I wouldn't worry about it and just sign the contract.

[StevieBee]

It's perfectly acceptable. The benefits to the company are that it can provide surety of consistency for specific projects, minimise recruitment costs and also discourages employees from using a salary increase to leverage higher offers from potential new employers.

The baseline salary is of no relevance. It's enforced through the requirement to pay the company back, pro-rata if your friend leaves of their own choice before the end of the agreed time period. The details need to be set out in an addendum to the employment contract.

What the company cannot do is enforce this upon your friend so the choice of whether to accept or not rests entirely with him.

[Pothole]

ridds said:

Is this leagl?

Happening to a friend of mine, they are willing to give them a pay rise providing they commit to say at the company of X many months / years.

If so how is it enfoceable?

In order to give reasoned opinions, surely we need the actual period in question. The actual job, current salary and proposed increase would also be useful.

[APontus]

It's just a question of bargain. The employer gives something (higher wages) in return for the employee giving something (longer notice period/increased fixed term).

If you won't commit to longer, don't take the deal and accept current wages.

The business may be using the process to flush out those likely to leave in the near future. That's fair game.

[ridds]

It's not a fixed term contract or a notice period change.

It's stipulating a date to stay until in exchange for a pay rise which doesn't ring true to me.

Details about job are already above, service industry, below minimum wage, working 60+ hrs per week currently.

[APontus]

I still don't understand what the problem is?

If you don't want to commit, don't accept the offer. If you want the higher pay, accept the offer and respect the commitment.

What would be your preferred solution?

[randlemarcus]

I'd be tempted to refuse the offer, even if I was thinking of staying on, though not if I wanted promotion/progression. A few quid a week is worth it for the worry that decision will make further up the chain

[popegregory]

APontus said:

What would be your preferred solution?

Presumably to have the pay rise without the knowledge that if something comes along in future you may need to decline it.

[ridds]

Another view then.

If said person were to accept the terms but then leave before the agreed date, what mechanism would the employer use to claw back salary from the employee and how is it handled through HMRC for tax etc?

[Cotty]

ridds said:

If it's the done thing then why do not all companies do it, "here's your pay rise, you need to stay for 5 years or we'll claw it back"

Mine kind of did someting like that. My contract agreed a bonus if I was still at the company after one year. It then stated that if I left the company within the following year I would be required to pay back the loan in proportion to how soon I left after receiving it.

I had previous companies claw pack payments for exams if you left within a certain amount of years. If you left within two years you would have to pay 50% of the cost back to the company. They have also done a similar thing with bonus.

[ridds]

The reply said more than likely.

Keen to hear if anyone knows someone who this has happened to. I've just never heard of it before.

[ridds]

Cotty said:

Mine kind of did someting like that. My contract agreed a bonus if I was still at the company after one year. It then stated that if I left the company within the following year I would be required to pay back the loan in proportion to how soon I left after receiving it.

I had previous companies claw pack payments for exams if you left within a certain amount of years. If you left within two years you would have to pay 50% of the cost back to the company. They have also done a similar thing with bonus.

That's bonus and training. I'm talking about renumeration.

[CDP]

ridds said:

It's not a fixed term contract or a notice period change.

It's stipulating a date to stay until in exchange for a pay rise which doesn't ring true to me.

Details about job are already above, service industry, below minimum wage, working 60+ hrs per week currently.

If it's under minimum wage he should be looking for another job with higher pay and contacting HMRC about the backpay owed.

Frankly would you want such an employer to have any sort of hold over you?