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Ensuring compliance with severance calculations
Staff who are laid off are entitled to severance. The Employment Contracts Law(ECL) has increased the complexityin calculating severance compensation. Generally, an employee should receive severance based on the number of consecutive years worked with the employer at the rate of one month's average monthly wage for each year of service. The employee's "average monthly wage" is based on the employee's total wages for the twelve months immediately preceding the employee's termination, including all cash payments such as commissions, allowances, bonuses, subsidies, etc. In addition, employers must round up and partial period of employment of six months or more to one year, thereby entitling the employee to a month of wages. Any period of less than six months entitles the employee to one-half of his/her monthly wage.