Bank and Insurance Workers Shortchanged $1.2B in Vacation Pay, Lawsuits Say

At least five class action lawsuits have been filed by employees of Canadian banks and insurance companies after they were allegedly shortchanged billions of dollars in vacation pay.

Defendants in the class action lawsuits, which employees began filing in 2019, include Royal Bank of Canada (RBC), Bank of Montreal, UBS Securities, and Allstate Insurance. Employees, including insurance agents and investment advisors, say that the companies failed to include commissions and bonuses when calculating their vacation pay. The miscalculation resulted in millions in profits for the companies, but violated provincial and territorial labor laws, the plaintiffs say.

Experts told CBC News that, if these vacation pay class action lawsuits are successful, major companies could see lawsuits from salespeople and other commissioned employees claiming back pay for decades of work.

“Many companies have caught up and changed the way that they pay people to be compliant, but many, many haven’t,” a Toronto employment lawyer told CBC News.

“If you look across the country, there’s at least hundreds of millions of dollars of liability, if not more, because there are just so many entities that have not caught up,” he continued.

According to one class action, RBC Insurance systematically failed to include bonuses and commissions in its vacation pay for sales staff. The lead plaintiff, Ontario resident Maureen B. who says she worked for the company for nearly a decade, alleges her vacation pay was calculated using her base salary of $37,500. Commissions and bonuses made up a large part of her compensation, she told CBC News reporters, but RBC failed to include that money in her vacation pay.

“I need my money, plain and simple,” Maureen told CBC News. “There’s no bells and whistles around it, you owe me my money. I’ve worked for it.”

Indeed, the plaintiff says that in her new position with a smaller company, her vacation pay is properly calculated.

“We need to make sure that this is rectified for those who are taken advantage of,” Maureen commented to reporters of her time at RBC. “That’s how I feel. When this happened, when I found out that this took place, I felt as if I was taken advantage of.”

“RBC takes pride in ensuring that everyone who works at any RBC company is fairly compensated,” RBC Insurance communications director Greg Skinner told CBC News in an email.

Another plaintiff in a class action lawsuit against RBC, Winnipeg resident Leigh C., points out that the bank has reported record profits, all the while shortchanging their workers, she alleges.

“It’s just wrong,” Leigh told reporters of the class action lawsuit, which was only recently made public. “We are helping as employees to create that profit.”

In response to similar class action lawsuits, Allstate told CBC News that it will defend itself from the allegations, while BMO refused to comment.

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