How to Calculate Severance Pay
Losing job can bring in a great deal of pressure! Especially when the termination is sudden, it can create a chaos in your life, messing up with all your plans. With so much to deal with, it becomes difficult to handle the emotional, financial and other issues cropping up. Whether you have been dismissed constructively or wrongly, you are entitles to financial compensation, also known as severance pay. If you are not being given the severance pay or feel that the pay has been quite low, its time you contacted an employment lawyer in Ottawa. A lawyer will inform you about your rights, steps you can take and other issues related to compensation when you part ways with the company.
What is Severance Pay?
The compensation that an employer provides to an employee who job has been eliminated or the employee has been laid off is called Severance Pay. Even if the employee leaves the organization for other reasons or there is a mutual understanding to quit, severance pay is applicable. It can be a simple monetary compensation or can include different factors like health insurance and more. The calculation of severance pay is influenced by policies and regulations of the organization. In fact, it has been seen that not all companies in Ottawa severance pay. Thus there is no standard or prescribed formula for calculation of severance pay. Calculation of severance pay is usually on a case-by-case basis. You need to have an understanding of various factors that influence calculation of severance pay in Ottawa.
Common factors that affect calculation of severance pay include –
- Duration of employment – The length of time an employee an employee has been associated with the employer is considered to be a vital factor. It is considered that higher the amount of time an employee has been employed with the company, higher is the severance pay. But, this is not a proved factor. There have been cases where employees working in a company for a short period have also received high severance pay.
- Employee’s Position – The position an employee has held in an organization also affects the severance package. If the person is employed on a senior position, their severance pay is high. Similarly, if an employee holds some specialist skills, he is entitled to a higher pay.
- Age – Though it is surprising, age of an employee also influences calculation of severance pay. An older employee is entitled to a higher severance package compared to a younger one.
To get the best advice on calculation of severance pay, you should contact an expert employment lawyer in Ottawa.