If performance review is late, does annual pay increase have to be retroactive?
Question: In our (non-union) company, we review each employee’s job performance and rate of pay annually. An employee's review was two months late and he received a pay increase. Can we implement the increase effective on the employee’s actual review date, or do we need to make it retroactive to the date when his review should have occurred?
Answer: Whether an employer is obliged to administer an employment benefit in a certain manner will depend on the employment contract between the parties. The benefit must be grounded in a contractual provision or employer policy in order to function as a “right” which the employee can enforce. As a result, the answer to this question will depend on whether the applicable employment contract or policy clearly specifies that wage increases must take effect on a certain date.
Colin G.M. Gibson is a partner with Harris & Company in Vancouver. He can be reached at [email protected] or (604) 891-2212.
Answer: Whether an employer is obliged to administer an employment benefit in a certain manner will depend on the employment contract between the parties. The benefit must be grounded in a contractual provision or employer policy in order to function as a “right” which the employee can enforce. As a result, the answer to this question will depend on whether the applicable employment contract or policy clearly specifies that wage increases must take effect on a certain date.
Colin G.M. Gibson is a partner with Harris & Company in Vancouver. He can be reached at [email protected] or (604) 891-2212.
