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The $2.5M Payroll Threshold Includes Payrolls Outside Ontario, According To The Ontario Superior Court

Severance: The Basics
There are two types of statutorily mandated pay that an employer may be required to provide an employee upon termination:(1) termination pay and (2) severance pay. Both termination and severance pay are minimum employment entitlements, they cannot be contracted out of, and they must be paid and calculated separately pursuant to the mechanisms provided by theEmployment Standards Act, 20001 (the "ESA").

The ESA defines what constitutes severance and who is entitled to severance.2 In the case of individual termination, an employer must provide severance pay to an employee who has been employed for at least five years, and the employer has a payroll of $2.5 million or more.3

The payroll threshold is met if either (a) the product of 13 multiplied by the total wages of all employees during the preceding four-week period ending on the last day of the last pay period prior to the severance or (b) the total wages of all employees in the penultimate or last fiscal year pr...

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