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Nicole Dugas

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Termination Pay:

The labor laws are very pro worker. Nowhere is this more evident than in the draconian termination law. When an employee is terminated, he is entitled to termination pay; unless:

1. The employment was for a specified period of time, such as while building a house, or for house sitting for the winter while the owner is away, etc. It is best to have the time stipulation in writing.

2. For just cause. This is a very complicated issue, and you may need the help of a labor lawyer if the employee appeals to the labor review board. Just cause is spelled out in detail in the law.

The termination pay shall include 3-months salary plus 20 days for each year worked plus prorated vacation and Christmas pay.

20 days means 20 times the daily rate which is 1/7 of the weekly rate.

Example: A maid worked 2 days per week for $50 pesos per day for 4 years. That is $100 per week. There are 13 weeks in 3 months. Her daily rate is not $50. It is 100/7 = $14.29. So her termination pay will be (13 x 100) + (20 x 14.29 x 4) = 1300 + 1143.20 = $2443.20 plus any Christmas and vacation pay that may be due.

If this termination package cannot be paid at the time of termination, regular salary shall continue until the termination is paid in full.

If the employee quits voluntarily, termination pay is not required. A common tactic to avoid termination pay is to induce the employee to quit. One must take care with this because the law cited above spells out what an employer cannot do to harass a worker and his family.

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