Major layoffs are continuing to take place in the tech sector. Shopify recently announced that it is cutting 10 per cent of its staff, approximately 1,000 employees, after misjudging the growth of e-commerce.
Shopify said it will provide those being let go with 16 weeks of severance pay, plus one week for every year an employee has spent working for the company. In some cases, however, workers could be owed more than this initial offer.
READ MORE: 5 vital facts about severance pay you might not be aware of
If you lost your job during a mass layoff, here’s what you need to know to ensure you receive the compensation you are owed.
You are entitled to full severance pay if you are laid off
Employees are owed full severance pay when they lose their jobs due to downsizing or corporate restructuring. Compensation can be as much as 24 months’ pay, depending on a number of factors, including your age, length of service, position and ability to find new work.
READ MORE: How to determine if your severance package is fair
My firm’s Severance Pay Calculator is a free online tool that can help you determine how much you are owed. If your company’s offer falls short of what is appropriate, you have been wrongfully dismissed and should file a claim for compensation.
Economic conditions will impact what you are owed
Even if your employer is struggling financially, they can’t reduce your severance entitlements. During tougher economic conditions, it’s going to be harder for you to find new employment, which means more compensation is owed.
READ MORE: Laid off in a bad economy? You might be owed more severance, not less
Severance packages are meant to help you bridge the gap between jobs. If the gap is expected to be longer than usual, your compensation must reflect this.
Your employment history will help determine severance
If you have been laid off, make sure you locate your employment contract as well as any documentation that supports your work history and experiences with your employer. Look for references to a promotion, pay increase, performance evaluation, bonus, benefits or stock options.
READ MORE: Tech industry layoffs: What to do if you lose your job
This information helps to provide a complete picture of your employment history with the company. It could make the difference between your severance package being a few weeks’ pay or many months’ pay.
If your current employer actively recruited you from another business, your time spent with the previous company could also be counted toward your years of service — and your overall compensation.
You might be owed additional severance even if your employer provides working notice
Most employers prefer to provide severance pay and end their relationship with an individual immediately. Some companies, however, choose to give working notice instead.
READ MORE: 6 things you need to know about working notice
While the length of the working notice is subtracted from what is paid out in severance, some employees could be owed additional compensation after this period has ended.
For example, if you worked at a company for 27 years and you are let go with three months’ notice, your employer could potentially owe you an additional 21 months’ pay in severance.
You don’t need to accept a severance offer immediately
While mass layoffs can feel overwhelming, your employer can’t force you to accept a severance offer before you leave a meeting or by a particular date. In some cases, companies take advantage of chaos or confusion to get an employee to agree to the bare minimum or far less compensation than they are legally entitled to.
We always recommend that you carefully review your employer’s offer before accepting. You have two years from the date of your layoff to pursue full severance pay.
Don’t sign until you speak to an employment lawyer
Severance offers sometimes include a termination clause that tries to limit the amount of compensation you can receive or non-compete clauses that prevent you from finding work elsewhere in your industry following a mass layoff.
Before accepting any offer, have an experienced employment lawyer, like the ones at Samfiru Tumarkin LLP, review the agreement to ensure you are receiving the severance you are owed.
Laid off due to downsizing or corporate restructuring? Not sure if you received the full amount of severance you are entitled to?
Contact the firm or call 1-855-821-5900 to secure assistance from an employment lawyer in Ontario, Alberta or British Columbia. Get the advice you need — and the compensation you deserve.
Lior Samfiru is an employment lawyer and co-founding partner at Samfiru Tumarkin LLP, Canada’s most positively reviewed law firm specializing in employment law and long-term disability claims. He provides free advice as the host of Canada’s only Employment Law Show on TV and radio.