01 Nov How do I know if my severance package is fair?
If you are reading this, you may have just been laid off and handed a severance package to help you in your transition from employment to finding another job. You have glazed over the amount of money and benefits that your employer has offered but you aren’t sure whether you should be satisfied. Well thankfully, KCY at LAW is here to help make sure you are getting treated fairly.
What is severance pay?
Severance pay is the compensation an employee receives when their employment obligations are terminated without cause. This severance pay is in place to make up for the losses an employee would suffer after being severed from a long-term work commitment and having to find alternate work.
Do I qualify for severance pay?
An employee can qualify for severance pay if they have worked for their employer for five or more years continuously and if their employer has a payroll of $2.5 million or more, or if the employer fired 50 or more employees in under six months because of a portion of a business being shut down.
How do I know my severance pay is adequate?
An employee should check the amount they should be receiving based on their pay and the number of years they have contributed to the company. To calculate the severance pay you should be receiving: multiply your regular wages for a normal work week by the number of completed years of employment.
Each employee receiving a severance package is entitled to the minimum statutory requirements in the Employment Standards Act (ESA). A minimum statutory requirement means that no severance package can be lower than this minimum, thus, each employee who receives a severance package is legally obligated to get at least this amount. Employees, under the ESA, have a right to file a wrongful dismissal claim if they feel like their termination pay or severance pay was mishandled. The difference between severance and termination pay is that severance pay is a benefit for long-term employees, whereas, termination pay is the payment given to an employee who had their employment severed without cause. An employee cannot file a wrongful dismissal claim for termination pay and for severance pay, the employee must choose between what claim they would want to file.
If you need help identifying whether your severance package is sufficient or need help with negotiating better severance pay, contact KCY at LAW by filling in an online consultation request or contact us by phone at 905-639-0999 to book your consultation today.