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etiquette for bonus and raise preceding resignation

  • Last Updated:
  • Dec 7th, 2017 1:37 pm
[OP]
Sr. Member
Aug 16, 2008
757 posts
133 upvotes
Markham

etiquette for bonus and raise preceding resignation

I just received a raise from my company for good performance, and bonus season is just around the corner. Unfortunately, I don't foresee myself staying with the company much longer. Obviously, I want the bonus but am concerned of possible legal action they can take, or if they can even ask for the bonus and the raise back from me. Also, I do not care for their reference as I have significantly better references and better work experience from recent past.
15 replies
Deal Addict
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Jan 31, 2006
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What kind of bonus are you referring here? X'mas bonus? annual bonus? profit sharing? I don't see they can take it back since you help them year long and you deserve it. But don't submit your resignation letter until the bonus is given to you. They also can not claw back the pay raised since they determine that based on your performance.

But the reference is important whether you say you have solid reference from your past employer/co-worker. Unless you already have a new job in hand, most employer are looking at a reference from your last job.
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Mar 15, 2005
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unowned wrote:
Dec 6th, 2017 12:53 am
I just received a raise from my company for good performance, and bonus season is just around the corner. Unfortunately, I don't foresee myself staying with the company much longer. Obviously, I want the bonus but am concerned of possible legal action they can take, or if they can even ask for the bonus and the raise back from me. Also, I do not care for their reference as I have significantly better references and better work experience from recent past.
They have little to no recourse unless it is some sort of retention bonus, but even in that scenario the payout probably represents the vesting of time served.

I work at a bank, it is very common for people to time their resignation to be the days or weeks after bonus payout.
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Dec 28, 2010
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Isn't a bonus based on performance? Let's say you would pass away, they wouldn't go after the bonus then, so why would they if you leave? Put it in a TFSA and if they take it back shrug your shoulders... and let us know which company it was.
Actions speak louder than words
Deal Addict
Sep 4, 2007
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Edmonton
Bonus is for great performance in the last year. You earned it.
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Mar 23, 2008
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Check with your employment agreement, but in general, once the money is paid to you, they have no recourse for "taking it back". Occasionally, an employment contract might have clauses in there for moving or education expenses that the company reimburses you for. Bonuses, I'd say that's not going to be covered, which means you're good to go. Same as raises.

C
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Apr 21, 2014
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unowned wrote:
Dec 6th, 2017 12:53 am
I just received a raise from my company for good performance, and bonus season is just around the corner. Unfortunately, I don't foresee myself staying with the company much longer. Obviously, I want the bonus but am concerned of possible legal action they can take, or if they can even ask for the bonus and the raise back from me. Also, I do not care for their reference as I have significantly better references and better work experience from recent past.
They definitely can not ask you for bonus and raise back. What I would do is ask about your company's bonus policy. A company that I used to work for quite a few years ago would pay out their bonus in February for work performed the previous calendar year but their policy was that you had to be employed with them at the time of the bonus payment to receive it. So nobody ever left in January and February.

However, my previous company paid out their bonus the same was as well (a couple of months after year-end), but as long as you worked during the previous calendar year you were still entitled to the bonus. I actually had a great opportunity that I left for, and I still got my bonus. Word of caution though, there are 2 parts of a bonus from a Company standpoint. The first is to reward employees for work performed, and the 2nd is retention. So my bonus would have been a bit higher if I was still employed, as they just put me in the middle for every category of individual performance metric. To maximize your payment, I would not give in any resignation until AFTER the bonus letter comes out as well as your salary increase. I'm assuming your salary increase will be backdated to the beginning of the period.
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Dec 27, 2009
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Unlike others experience on this thread, I would tell you not to count on getting any bonus if you quit before it is announced/in your hands. If you think you have a decent bonus coming, I would wait. No way would anybody in the companies I've worked for that did bonuses have given them to previous employees whether they had worked there last year or not.
[OP]
Sr. Member
Aug 16, 2008
757 posts
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Markham
Chickinvic wrote:
Dec 6th, 2017 9:42 pm
Unlike others experience on this thread, I would tell you not to count on getting any bonus if you quit before it is announced/in your hands. If you think you have a decent bonus coming, I would wait. No way would anybody in the companies I've worked for that did bonuses have given them to previous employees whether they had worked there last year or not.
ya i meant i would stay until at least the bonus is in my hands...just wanted to know how feasible it is for a company to take back the bonus after giving it.
[OP]
Sr. Member
Aug 16, 2008
757 posts
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Markham
VESTEGAARD wrote:
Dec 6th, 2017 11:24 am
Isn't a bonus based on performance? Let's say you would pass away, they wouldn't go after the bonus then, so why would they if you leave? Put it in a TFSA and if they take it back shrug your shoulders... and let us know which company it was.
in practical thinking yes, but a bonus also signifies that the company wants to retain you, regardless of whether the bonus was designated as a retention bonus.
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Oct 14, 2001
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There's usually a cut-off date where you have to be employed to get the bonus. For example, where I work, you'll get the bonus if you're still employed on March 31 and the bonus will be paid early-May regardless of whether you're still working there or not. So when people resign around that time, they will try to ensure their last day of work is on, or right after, March 31.
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unowned wrote:
Dec 6th, 2017 11:43 pm
in practical thinking yes, but a bonus also signifies that the company wants to retain you, regardless of whether the bonus was designated as a retention bonus.
A performance bonus is pay for past performance.

A retention bonus is usually accompanied by a contract that stipulates conditions that must be met in order to receive the bonus. The retention bonus is paid when the conditions of the contract are fulfilled.

If it is a performance bonus, you are good to go when it is in your bank account.
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Nov 22, 2009
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batcave wrote:
Dec 7th, 2017 12:38 am
A performance bonus is pay for past performance.

A retention bonus is usually accompanied by a contract that stipulates conditions that must be met in order to receive the bonus. The retention bonus is paid when the conditions of the contract are fulfilled.

If it is a performance bonus, you are good to go when it is in your bank account.
I've never heard of retention bonuses, are they common?
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blitzforce wrote:
Dec 7th, 2017 9:23 am
I've never heard of retention bonuses, are they common?
They are less common than performance bonuses, but are always around. They usually exist when a company goes through some organizational change like a merger, acquisition, restructuring, etc. They are usually kept confidential because only some employees receive them. Retention bonuses are almost always guaranteed to pay because the contract usually only requires the employee to stay to a certain date to fulfill the contract. It's free money. A RFDer's dream! Face With Tears Of JoyFace With Stuck-out Tongue And Tightly-closed Eyes
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Apr 21, 2014
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Chickinvic wrote:
Dec 6th, 2017 9:42 pm
Unlike others experience on this thread, I would tell you not to count on getting any bonus if you quit before it is announced/in your hands. If you think you have a decent bonus coming, I would wait. No way would anybody in the companies I've worked for that did bonuses have given them to previous employees whether they had worked there last year or not.
It all depends on the bonus policy. Best thing to do is read it. Every company is different.

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