What is Severance Pay?
With the introduction of a part-time workweek as per the latest government’s instructions, Severance Pay has taken the world of employment by storm. What is severance pay? It is simply an amount given to you by your company that you accrue throughout a specified period of time based on your performance as an employee. The concept of this program was originally introduced in Canada in the year 2021. Since its inception, it has gone through a few changes and amendments to suit the needs of both the employer and employee.
The basic difference between what you are legitimately owed and what your company offers you may be as little as 24 hours’ pay. Employment Lawyer Lior Samfiru, partner at Samfiru Tumarkin Ltd., explains how severance pay lawyer functions on the Employment Law Show. “The concept behind the program is not to compel an employee to return to work but rather to motivate that employee to pursue some form of wage replacement which may mean an increase in hourly rates, additional training time or even cash incentives,” says Mr. Samfiru. “As an employer, you may find it beneficial to implement the program to your employees especially if they have suffered a recent loss such as an accident.”
As per HR Executive for Toronto’s labour unions, the introduction of the program has helped thousands of laid off workers in Toronto’s industry find new jobs. However, while this may be the case, the impact of the program to an employee is yet to be determined. As the employer, you must take into consideration the fact that you will have to make room in your payroll for the number of new members you have been able to hire. The HR Executive of the Toronto labour unions goes on to state, “It doesn’t necessarily mean that when you give an employee a Severance Pay check that there is some kind of monetary benefit to them…they are also gaining a sense of job security.
What is Severance Pay? – Hiring An Experienced Severance Pay Law Firm
There are several questions that you need to ask the experts at your law firm. For example, will you be required to pay taxes on the Severance Pay? What about social security contributions? What about medical benefits? While the experts from a Severance Pay law firm can go over every issue, you still need to get your doubts clarified.
You will also need to know what happens to the employee’s pension. Will it continue to be offered? How will it be invested? And lastly, will an employee continue receiving life insurance coverage during his/her unemployment? These are only a few of the issues that you will need answered before you decide to hire an HR Executive for Toronto.
If you don’t feel comfortable answering these questions, then perhaps it is best to hire an independent financial advisor to help you out. Remember, your legal advisor and HR executive are only there to guide you. Do not place their personal opinions above yours when making decisions. They are only there to keep you informed. After all, your well being and happiness is what they want to focus on!