Question

Payroll. Ontario and Québec.
Aside from a termination pay that must be paid upon termination what are other empolyer related cost that may occur upon employment termination?

Answer 1

The employment termination is an end of an employee’s contract with a company. An employee can be terminated from employment of his/her own free will or following a decision made by the employer. However the involuntary employment termination takes time and cost money. Moreover it includes below discussed costs:

--Accrued paid time off: When an employee is terminated, employer must give them their final pay-check. If employer offer paid time off (i.e., sick or vacation pay), they have also to compensate the employee for unused hours.

--Continuation coverage: The health insurance coverage that employer provides to it’s employee after they are terminated is called COBRA (The Consolidated Omnibus Budget Reconciliation Act). It's coverage is applicable to private-sector group health plans and health plans given by state and local governments

--Severance pay: Severance pay refers to the money employees receive when they are fired from the company.

--Vacancy: When an employee is terminated, the employer need to cover their duties. The process may need those employees to pick up some of the slack. Depending on the circumstances, filling the vacant position could result to overtime.

--New hire: Each time an employer recruit, onboard, hire, and train a new employee, they spend huge amount.

--Miscellaneous: There are numerous other ways that employee termination can cost your business, like low workplace morale, lost productivity, and even lawsuits.