Severance Pay Ontario Be Provided For Remote Workers

When it comes to terminating employees, understanding and adhering to severance pay ontario rules is vital for employers. Not only does severance pay act as a form of financial support for longer-serving employees as they move on to new opportunities, but failing to provide the correct amount of severance can result in legal repercussions.

Severance pay is a payment mandated under Ontario’s Employment Standards Act (ESA) that larger companies must provide to terminated employees in the event of layoffs or downsizing. The ESA stipulates that larger employers must offer a severance package equal to one week of regular wages for every year of service, up to a maximum of 26 weeks. This severance pay is on top of the minimum notice or pay-in-lieu that a company must provide an employee upon termination.

Generally, the terms of an employment contract may supersede the minimum severance pay required by the ESA. However, many employment contracts contain clauses that restrict an employer’s ability to provide a severance package or that limit the amount of severance pay that is applicable in the event of a job loss. These restrictions are commonly found in work-from-home arrangements, severance agreements, and termination clauses.

Can Severance Pay Ontario Be Provided For Remote Workers?

An employment lawyer in toronto can help you determine the minimum severance pay Ontario you should be entitled to receive. Typically, an employment lawyer will take into account all forms of compensation that make up your severance pay package including wages, benefits, bonuses, car allowances, commissions, etc. An experienced employment lawyer will also consider whether or not a severance package includes your entitlement to severance pay in lieu of notice.

Currently, ESA rules stipulate that mass layoffs require an employer to give employees eight, 12 or 16 weeks of statutory notice of termination or pay-in-lieu depending on the number of employees let go within a four-week period. The definition of an employer’s “establishment” is not currently extended to include remote workers, meaning that a company could avoid meeting the ESA requirements for mass layoffs by letting go both in-office and work-from-home employees.

The Government of Ontario is looking to amend the ESA to extend this protection to remote workers. The proposed changes would allow an employer to pay a group of remote employees the same amount of severance pay as they would for in-office workers when they are laid off as part of a mass layoff.

As an employment lawyer, Stacey Ball regularly helps clients resolve issues involving their termination and severance pay. If you have questions about your severance pay or need assistance interpreting your employment contract, contact the office of Stacey Ball today to book an appointment. Stacey is available to assist clients throughout the GTA. For a confidential consultation, please call (416) 298-2787 or complete our online booking form. Your privacy is important to us, and your information will never be shared with third parties without your consent. Click here to learn more about our firm. We look forward to hearing from you!

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