Employment Affect Severance Pay
If you’re facing the possibility of losing your job, negotiating a severance package may help ease your transition and provide a financial cushion. However, a monetary arrangement isn’t the only issue to consider. A severance package can also include continued insurance benefits and help finding a new job, among other things. If your employer doesn’t comply with severance pay rules or doesn’t give you the amount you deserve, this could be a case of wrongful dismissal.
The duration of your employment at a company determines how much severance you’ll receive, as well as the size of your final paycheck. In general, most companies follow a formula that includes one week of salary for each year you’ve worked, with a standard agreement maxing out at around 26 weeks. This varies from company to company, though, and seniority and position can play a role in how much severance you’ll get.
In the United States, there is no federal law that requires employers to offer severance pay or how much they’ll pay when they terminate an employee. However, some circumstances will trigger legal requirements like the Worker Adjustment and Retraining Notification Act (WARN), which requires companies to provide workers with 60 days of notice before mass layoffs or plant closures.
How Does the Duration of Employment Affect Severance Pay?
Whether or not an employer must provide severance depends on whether or not they’ve made a commitment to do so in an employment contract, a collective bargaining agreement, or company policy. Additionally, some companies will need to comply with the WARN Act if they’re laying off 50 or more employees in six months.
severance pay Toronto isn’t the same as unemployment benefits, although some states allow you to collect unemployment while receiving severance. However, if you’re being laid off for good reason—including not performing to the company’s standards or refusing to relocate for a new job—you’ll likely be eligible to claim unemployment.
It’s also possible to negotiate a higher severance package if you have specific reasons why your job loss was unfair. For example, if you turned down another job offer at the same level or higher because of your loyalty to the company, this is a good argument for why they should pay you more. Lastly, if your company offered you a bonus but didn’t deliver on this promise, this is an issue to raise during severance negotiations. Bonuses typically make up a substantial part of an employee’s total compensation, so missing out on this amount can cause significant financial stress.
In the event your employer doesn’t give you the amount of severance you deserve, it’s important to contact an employment lawyer. We’ll review your situation and determine if you have a case for wrongful termination or constructive dismissal. We’ll also investigate how much your severance pay should be and determine what steps you can take to get the money you deserve. If you need immediate assistance, call our Toronto office today.