Losing your job is a challenging and stressful situation. Having the support of an experienced employment lawyer can make a significant difference, ensuring you receive the compensation you are legally entitled to. Whether you are an employee facing termination or an employer drafting severance terms, engaging an experienced employment lawyer can make a significant difference in mitigating potential legal challenges and ensuring fair outcomes.
Severance pay is a financial compensation package offered to employees upon severance of employment. It is designed to provide individuals with support during the transitional period between jobs and to ease the financial impact of the loss of a job.
The Ontario Employment Standards Act (ESA) dictates that to qualify for severance pay the following criteria has to be met:
Severance pay is not the same as termination pay. Termination pay is the financial compensation given to employees instead of giving the employee working notice. This form of payment is given if an employee is terminated without cause, as they are entitled to either a working notice period or payment that would reflect the amount of money they would have earned during their notice period.
If an employee meets the eligibility criteria listed above, their severance pay can be calculated by multiplying the employee’s wages for a standard work week by the sum of:
For example, for an employee that has been working for 7 years and 4 months and earns $25 an hour, their severance pay would be calculated as follows:
Understanding the complexities of severance pay is crucial for both employers and employees. At DSF, our team of skilled Toronto employment lawyers take the time to understand each client’s unique situation to tailor strategies to each client’s needs. For employees, we provide expert advice on severance matters to help you understand your rights and negotiate a fair compensation package. For employers, we help to develop compliant and comprehensive severance packages to minimize risks and create a positive relationship between employer and employee.
We offer multiple convenient locations in Toronto, Whitby, Barrie and more to better serve our clients. To begin your initial consultation and find the right employment lawyer, please contact us at (416) 449-1400.
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