How Does Severance Pay Ontario Vary Across Different Industries?

Severance Pay Ontario Vary Across Different Industries

There are many important details to consider when it comes to selling a business in Canada, including how much you may be required to pay your employees if the sale results in them being terminated. Severance pay is an important form of compensation that enables your employees to move on to new employment opportunities while still being paid for their time at the company. If you are considering selling your business, it is essential to understand how severance pay ontario varies across different industries, and the minimum requirements that must be met.

In Ontario, the severance pay that your employer is legally required to provide you with depends on how long you’ve worked for them. If you’ve worked for less than three years, you’re only owed one week of termination pay, while if you’ve worked for eight years or more, you can receive up to 34 weeks of pay in total (termination and severance). There are a number of other factors that can impact your eligibility for everance pay Ontario, and an experienced employment lawyer can help determine whether or not you’re entitled to this compensation upon being terminated.

If you’re an employee in this situation, you will need to provide your employer with a written notice of your intention to leave. Generally, your employer will then offer you a severance package that is at least the minimum required under the Employment Standards Act. This is typically based on your average weekly wage and the number of weeks you’ve worked for the company.

How Does Severance Pay Ontario Vary Across Different Industries?

The law states that you must receive severance pay within seven days following the end of your employment or on what would have been your next regular payday, whichever occurs later. If you work for a unionized company, the rules for severance pay are slightly different as the terms of your union contract may dictate the specifics.

You can also expect your employer to deduct a portion of your severance pay from your last paycheck for income tax purposes. This includes both federal and provincial taxes, as well as FSCO contributions. You can choose to deposit some or all of your severance pay into an RRSP or RPP. In this case, you’ll have to be aware that any future withdrawals from the RRSP or RPP will be subject to taxation as well.

Many employers go above and beyond the minimum legal severance pay ontario requirements when it comes to terminating employees, especially in larger organizations with a global payroll of $2.5 million Canadian or more. Those who do so often find that their former employees are able to sue for the additional amount that they’ve been offered, which can be tens of thousands of dollars or more in some cases.

It is imperative that you understand the nuances of severance pay in Ontario and that you consult with an experienced employment lawyer before you accept a severance pay package from a potential employer. The team of employment lawyers at Samfiru Tumarkin LLP can use various laws and factors to determine how much you’re owed, and then negotiate with your employer on your behalf in order to ensure that you receive the compensation you deserve.