Chapman Riebeek’s Severance Calculator: Your Guide to Severance Pay in Alberta
If you are or have been an employee in Alberta, you’d be hard-pressed not to be familiar with the basics of severance pay, since provincial employment standards govern your job. These are the laws that protect your rights in the workplace and outline what you can expect from your employer. The Alberta Employment Standards Code is a complex document with many rules, but one of the most important is your right to severance pay.
Severance pay is a financial benefit that an employer must provide to you if they terminate your employment without cause. The amount of severance pay you are entitled to depends on the length of your employment and the reason why you are being terminated. Calculating the severance pay depends on many factors discussed in this article and how you can use a severance calculator to understand your legal entitlements:
- How does severance pay work, and what is a severance package?
- How much tax is taken off severance pay in Alberta?
- How is severance pay calculated in Alberta?
- What can an Employment Lawyer do?
A Look At Common Law Severance Pay: What Happens When Your Employer Cuts Back
You might be wondering how common law severance pay works in the first place. First, let’s look at what happens once you understand that your employer is about to let you go. In essence, common law severance pay in Alberta is determined by law once an employer terminates or fires a non-unionized employee without cause.
Termination without cause can be anything from cutting down expenses, the employer’s company being poor, or any other reason that does not constitute endangering workers’ rights. If your employer fires you without cause, the employer is legally obligated to provide you with common law severance pay as compensation for the time it takes you to find another job and support yourself financially.
Your employer has to give you severance pay seven days after your contract ends, or on the date that would have been your regular payday. It would help if you looked at your employment agreement, which outlines how much severance an employee is entitled to in any given circumstance. The standard law court system assesses the situation and determines how much common law severance or notice an employee is entitled to by establishing the following:
- Employees age
Courts consider your age since the older you get, it makes it difficult is for you to find another job and compete against younger workers.
- Years of service
By default, long years of service give an employee entitlement to a more extended notice period. In addition, some courts may argue that the length of your employment may influence a new employer to see you as unadaptable to a change.
- Type of job
Different types of jobs require distinct notice periods. For example, a manager or specialist position requires more extended notice, which entails higher severance pay.
Based on the circumstances of each employee, Courts usually determine fair compensation. For example, in Alberta, according to the Employment Standards Code (the ESC), the minimum severance pay is one week’s pay for 90 days spent with an employer, and it can be up to 24 months’ worth of severance pay under common law.
However, each situation is individual, and some employers resort to giving the minimum severance pay under the ESC. The employee may be entitled to more than that, depending on the employment agreement. Another common situation is employers providing a fictional deadline for employees to sign a severance offer. This way, they are urging the employee to accept the offer. Again, the employee might be entitled to more than that, and employees can ask for an extension of that deadline to consult an employment lawyer.
Severance Tax in Alberta – A Simple Explanation
Employees who receive severance pay are obligated to pay taxes on that sum. Therefore, your employer is obliged to include that amount on your Record of Employment and T4 form. However, your taxes will be between 5% and 30%, depending on your province of residence, the severance amount received, and the manner in which your severance amount is paid out. For example, if you receive severance in whole, you will be taxed on the entire sum. However, the taxes can be spread out if you receive them as a deferred salary.
Severance Calculator – How is Severance Pay Calculated in Alberta?
The ESC guarantees the minimum amount of severance pay you will receive when you lose your job. The amount depends on your length of service as an employee.
- Between 90 days and two years of service = 1 week’s notice
- 2 years to 4 years of service = 2 weeks’ notice
- After 4 to 6 years of service = 4 weeks’ notice
- After 6 to 8 years of service = 5 weeks’ notice
- After 8 to 10 years of service = 6 weeks’ notice
- After 10 years or more = 8 weeks of notice
However, the amount of common law severance you receive depends on your length of employment, the age of the employee at the time of termination, the type of position held, including salary, responsibilities, and if you signed an employment contract and availability of similar employment. Generally, the longer you’ve been working at a company, the more common law severance you’ll be entitled to.
How Chapman Riebeek’s Severance Calculator Works
If you have been fired or laid off, it can be stressful and confusing. You are likely wondering how much common law severance pay you are entitled to and whether or not your employer will give it to you.
Chapman Riebeek’s employment severance calculator relies on a proprietary algorithm we developed. As we already mentioned, the common law and Courts consider your position, age, and the number of years and months you have been employed in the company.
The algorithm uses the same variables and the amount of severance pay the company offered you. The Severance calculator uses this information to give you precisely what you are entitled to by the information you enter. The results will be sent to you by email for privacy purposes.
We are pleased to offer this tool to help you better understand your rights. Please visit our website at Severance Pay Calculator. We hope that this answers any questions you may have about how we calculate severance pay.
This severance calculator is not the same as legal advice. Every case is individual, and the results do not ensure your full entitlements. Please seek legal guidance from an employment lawyer about your specific situation before making any decisions.
Why Contact Chapman Riebeek Employment Lawyer
Chapman Riebeek lawyers believe it’s always better to negotiate and reach an agreement before making rash decisions or taking things to Court. With decades of experience, we can resolve any dispute. A severance calculator can only help you get a glimpse of what you might be entitled to based on your preliminary information.
However, many people have other individual circumstances that can help them surpass the minimal severance pay we mentioned. The main reason why contacting Chapman Riebeek employment lawyers would be a better solution is that they can provide counsel and advise you properly according to your case. In addition, personalized service and decisions can give you an advantage when dealing with these challenging circumstances.
Additionally, if your employer is trying to avoid your total compensation, being able to provide a written legal opinion can change their view. Finally, the fact that you have consulted an employment lawyer gives you an image of someone who has made an informed decision and knows their rights by heart.
Don’t settle for less; contact us if you have any doubts about what severance pay you might be entitled to.
Many factors determine how much severance pay you get, but one thing is for sure: if you’ve been terminated from your employment and were not given proper notice or severance, there are laws that protect you.
The ESC states that an employer must give at least one week of severance pay for each year of employment. Severance calculators such as ours are free resources you can use as a comparison. It explains how severance pay works, but if you need clarification on the numbers or your circumstances, it’s best to contact an employment lawyer and seek advice.