Any experience of a locked-in pay deal?

[YBR]

I am told my work is offering me (and some others) a substantial pay rise, on the proviso that it ALL has to be paid back if I leave within 2 years.
The company's situation is that a direct competitor is opening up a new office in the same town, and we are all aware that my company's pay rates are not competitive. They cannot afford to loose half their staff because of ongoing contracts.

I haven't seen the details yet, but I'm not familiar with this kind of lock-in - can anyone tell me are these used often and what is normal?

I'm concerned that I'll probably only take home 60% of the increase so even if I save the whole lot I couldn't pay the company back. I'm not planning to leave, and would accept the 2 years sentence, but life is not predictable: if I had to leave work (e.g. DH becomes incapacitated) I'd incur a big debt right when I could afford it least.

How might it affect flexible working requests, especially if I were to use the payrise to shorten my week and still balance the budget (not immediately but perhaps in 12-18 months time). Obviously I'd need to tackle this with my company but it would be useful to know about other's experiences.

Are they offering two year guaranteed contract as well. It seems they want to lock you in to them but make no commitment to you but to pay you month-to-month.

I would negotiate. If they want you that much they should commit to you for two years with a guaranteed contract that pays out even if they make you redundant. Seems they want to stop you leaving for a competitor but make no long term commitment to you.

Ask them these questions - they depend on the circumstances, so no standard T&C

Have you got legal insurance on your house insurance - could you also ask them for advice?

I've done this in the past and found them useful.

It might also be worth turning it around on them and saying that if they are worried about you leaving to go to the competitors then have the lock in if you leave to go to work for the competitor but if you need to leave for other reasons (ill health, husband gets a job in a different part of the country and you move with him, need to become a carer, go on maternity leave, bullying in the workplace if something changes at your current job, etc etc etc) then you get to keep your pay rise.

With the best will in the world, much as you plan on staying in a position for the indefinite future, you can't control everything going on around you. Nobody plans on becoming really ill or becoming a carer for their dh etc as you say and you really don't want to be penalised for this.

Otherwise they might as well be offering you bonus at the end of your staying for 2 years, as you'd just have to bank it (I assume they wouldn't want the tax etc back - could all be very complicated!)

Also check what happens after 2 years - if you leave in 2 years and a week, or in 3 years or 5 years time - what then? Will there be a rolling 'pay back the last 2 years of your pay rise' clause so that if you were to leave in 3 years then would you pay back 2 years worth of the increase and keep one - and what about any actual increments that you would have expected to get?

Also - what happens if you go on maternity leave - will you go and stay on the higher pay?

And what happens if the competitor decides to shut down in a years time - can they take the pay rise away from you?

zipzap Actually I assume they will want the tax back.
DH is a SAHD so there'll be no job move there, but hence my concern if he's unable to look after our DDs and/or needs care himself.
MoreBeta good point. I'm on a standard-ish permanent contract but it is worth checking that out.

I am not an employment expert but I am not even sure this is legal the idea of clawing back salary.

Loyalty bonuses where they pay you a lump sum at the end of two years are common in The City where I and DW used to work but not a clawing back of actual salary already paid.

I mentioned guaranteed 2 year fixed contracts also because they are common in The City. Poaching of staff there is common so locking in staff with guaranteed minimum 2 year contracts that pay out even if an employee is made redundant plus guaranteed loyalty bonus is very common.

Your firm need to show they are loyal to you for two years if they want two years of loyalty the other way from you.

Your other alternative of course is to go and work for the competitor on the higher rate of pay, without the lock in...