District of Columbia Termination and Severance Pay Policy

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This form provides extensive detail concerning a company's termination and severance pay policies.
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FAQ

You are qualified for separation pay should you be terminated due to one of these DOLE-stipulated authorized causes: Redundancy or installation of labor-saving devices. Retrenchment to prevent losses. Cessation of operation or closing of the establishment.

District of Columbia labor laws do not have any laws requiring an employer to pay severance pay to an employee. If an employer chooses to provide severance benefits, it must comply with the terms of its established policy or employment contract.

Generally, under D.C. Code § 32-1303, an employer must issue a final paycheck to a terminated employee no later than the next business day. However, an employee who quits his or her job is not entitled to a final paycheck until the next regularly scheduled pay date, or within seven (7) days, whichever is earlier.

Do Businesses Have to Offer Severance Pay? According to the U.S. Department of Labor, there is no law that requires employers to provide severance pay.

Just cause terminations: If the offense charged against the employee is proven, the employer is not required to grant separation pay. But if the employer fails to observe due process, he may be financially liable to the employee, even as the dismissal is upheld.

Severance: Under the Retrenchment and Severance Benefits Act, a retrenched employee is entitled to a minimum severance payment of (i) two weeks' basic pay for each of their first four years of service and (ii) three weeks' basic pay for each additional year of service after that.

Separation pay is granted only to employees who are dismissed. With regard to contractual employees, when the contract with their employer ends, what actually takes place is an expiration of term and not a dismissal in legal contemplation. In the absence of an actual dismissal, there can be no claim for separation pay.

Severance Pay In accordance with the Payment of Gratuity Act 1972, a worker is entitled to a gratuity payment upon termination of his service after five years of continuous employment. Amount of severance pay is equal to 15 days' wages for each completed year of service.

In D.C. and Maryland, the law requires employers to pay for unused PTO or vacation when the employee leaves. Failure to do so can result in enhanced damages. There is an exception to the law, however.

Severance pay a retrenched employee must at least be paid 1 week's pay for each completed year of ongoing service. However, the employer must pay the retrenched employee the amount specified in any policy or his/her employment contract, if that amount is larger.

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District of Columbia Termination and Severance Pay Policy