Severance Pay Ontario Be Provided For Contract
In Ontario, companies and employers can’t ignore their legal duty to pay a severance package when they let someone go. Whether you’re a unionized full-time or part-time employee, or even a contract worker, you deserve severance pay if you get fired or laid off. But there are many factors that determine how much you’re owed.
A severance package should cover your past and future earnings, as well as cover the costs of finding new employment. The minimum legislated severance pay is one week’s wages for each year you worked at your employer, but this might not be enough to cover all of your expenses after losing your job. The law also requires that you’re paid for the time you would have been working if you hadn’t lost your job.
Severance pay is separate from and in addition to the notice of termination or pay in lieu of notice that employers must provide employees when they terminate their employment. The minimum severance pay Ontario under the Employment Standards Act (ESA) is one week of an employee’s regular wage for each completed year of service, to a maximum of 26 weeks. However, this is a minimum and employers often offer severance packages that are far higher than the ESA mandated amounts. The amount of severance pay you’re owed will depend on a number of different factors, such as your position and years of service, and the circumstances surrounding your termination.
Can Severance Pay Ontario Be Provided For Contract Workers?
The ESA requires employers of a certain size to provide an eligible employee with severance pay when their employment is terminated. However, employers can use an employment contract to restrict their liability to the minimum amounts set by the ESA. But employers often fail to create legally acceptable termination clauses or don’t update them when the law changes. This can leave them vulnerable to claims from their former employees.
In cases where an employee’s employment is terminated without cause, meaning there was no fault on the part of the employee, the employer is typically required to provide both notice of termination and severance pay. The notice period or pay in lieu of notice is separate from severance pay and is calculated based on the employee’s length of service, with a minimum notice period prescribed by the ESA.
During the COVID-19 pandemic, the Ontario government passed a regulation that changed the rules on how employers can lay off and fire employees. This regulation also applies to companies and employers that are not covered by the ESA, including small businesses, federally regulated employers, and those headquartered outside of Ontario. The new temporary rules affect how severance pay, termination, and constructive dismissal rules are applied during the pandemic. They will expire on July 30, 2022.