‘You’re kind of dangling a carrot for them to stay until the end of that contract’: DPO on retention bonuses

“Stay-or-pay” clauses are a growing practice in the U.S., and while it is unlikely that such contracts will be upheld in Canada, there are still some lessons employers can learn from their neighbours south of the border, experts say.

The practice, which involves penalizing employees who break the tenure of their employment contract with sometimes very large amounts, purportedly to repay training, education, relocation or other costs, has made headlines in the States recently as employees begin to fight back against what they say is unfair treatment. Stay-or-pay clauses used to be mostly used with executives or highly specialized roles such as airline pilots or engineers, but due to economic factors employers have begun using the strategy with mid-and low-income workers.

HRD spoke with several experts about stay or pay clauses to find out how employers in Canada are managing similar issues of labour shortages and inflation.


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