As a Saskatchewan Employer, you must comply with the Employment Standards Act when it comes to termination pay. Below is an outline of how to correctly handle termination pay in the event of a termination or resignation.
How Does Termination Pay Work?
If an employee is terminated, you must give them either termination notice or pay in lieu of notice. Employers who do not want the employee to work throughout the notice period will provide pay in lieu of notice, which equals the amount the employee would have earned had they worked through the required notice period.
How to Calculate Termination Pay
At a minimum, termination pay must equal the wages the employee would have earned had they worked regular hours for the termination period.
If an employee’s wages vary from one pay period to another, termination pay equals the weekly average of the employee’s wages for the 13 weeks in which the employee worked prior to the date of termination.
When Is Termination Pay Due?
When adequate notice is given (either by the employee in the case of a resignation or by the employer in the case of termination) the employee’s earnings must be paid within 14 days of their last day of work. If a payday falls within those 14 days, the employee must be paid for the pay period on their regular payday.
The termination pay must include:
- Regular wages and any banked overtime.
- Public holiday pay.
- Pay instead of notice.
- Vacation pay.
There are also a few extra things to keep in mind when giving termination notice. These are:
- Banked overtime cannot replace a notice period.
- Vacation days cannot replace a notice period.
- Employee’s normal hours or wages cannot be reduced during the notice period.
If you are found to have not provided the right notice, or termination pay, you could face fines or worse. Get expert support today to protect your business from Employer Line.
Have Questions About Termination Pay in Your Workplace?
If you are unsure whether you are handling termination pay correctly, our team of HR experts can help. We’re here 24/7 to guide you through the process.
Call our free employer advice line today at 1 (306) 986-3558.