RBC to hike pay 3% for lower paid employees to keep talent

Royal Bank of Canada announced that it is increasing the base salary of some employees by three per cent. The country’s largest bank said they are doing so to assist staff with the sudden spike in living costs, though the move does come at a time when the financial sector is in a hiring spree and talent is difficult to find.

• Employees in grades nine through 12 will be given a pay increase in July 2022, according to CEO Dave McKay.
• Family benefits for fertility, surrogacy and adoption services in Canada will be enhanced.
• Employee pension plan contributions are being increased over two years from 2023.

RBC said the combined changes and enhancements total as much as $200 million in investments.

Can RBC increase pay for some employees and not others?

RBC, like all companies across Canada, can bump up pay for some workers and not others. There is no law that requires an employer to apply a pay raise equally across all staff. RBC can’t base a wage increase on discriminatory factors (age, gender, ethnicity); salary increase should be based on merit (performance or seniority).

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Can RBC cut an employee’s pay?

While RBC can choose to increase someone’s pay, the bank can’t slash an employee’s pay or compensation. When a company makes a significant change to compensation, the courts consider it grounds to trigger a claim for constructive dismissal. The reduction can be construed as the employer breaching a fundamental term of the employment contract, bringing the work relationship to an end – much like a termination. The employee can then pursue a proper severance package, which can be as much as 24 months’ pay.

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