As an Alberta Employer, you must comply with the Employment Standards Code‘s rules pertaining to termination pay. The following information outlines 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 provide them with 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 a termination), the employee’s earnings must be paid within three days of their final day of employment.

If the employee does not give adequate notice, then the payment is due within 10 days after the date on which the notice would have expired.

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 guide you through the process. Call our free employer advice line today at: 1 (888) 219-8767.