During the economic crisis, many enterprises lay off their employees to optimize operations. In this regard, for most people, both for the heads of organizations and for their employees, the question of what severance pay should be paid in the event of a layoff and how to calculate it is very relevant.
Reduction
According to the Labor Code of the Russian Federation, one of the reasons for the cancellation of an employment contract is a reduction in the staff or number of employees of the enterprise.
A workforce reduction is a reduction in the number of workers in one position. For example, the reduction of three accountants out of eight. And staff reduction is the disbandment of a department or the elimination of identical staff units (i.e., for example, all engineers or all controllers). In both cases, the employer must follow the law: provide sufficient grounds for carrying out these procedures, provide the employee with all the guarantees and compensations required upon termination of the employment contract (pay severance pay when the employee is laid off, ensure a preferential right to remain in office, etc.) .p).
The reduction procedure involves the following steps:
- issuance of an order;
- notifying employees and offering them other job vacancies;
- informing the Employment Center and the trade union;
- dismissal of workers (as well as the statutory payment of severance pay in case of layoffs).
Issuance of an order
As soon as the manager decides to make reductions at the enterprise, he must issue a corresponding order. The mandatory form of this order is not established by law, but the boss must take full responsibility for its preparation.
The order to carry out reduction measures at the enterprise must indicate the date of the upcoming procedure and the changes that are expected to be made to the staffing table.
Notification to employees
After the manager has issued a layoff order, he must notify each employee in writing of the upcoming dismissal. However, this must be done no later than 2 months before the workers are removed from work.
A separate notice is drawn up for each laid-off employee, which is handed to him personally against signature. This document indicates the date and reason for dismissal.
Along with the notice of layoff, the employer is obliged to provide the employee with a list of available jobs (if any). If the worker agrees to switch to new position, the boss formalizes his transfer. The manager is obliged to offer available vacancies as they become available until the day the employee is dismissed.
Informing the employment service and trade union
In addition to the fact that employees must be informed about the dismissal directly, the employer notifies this fact Employment center and trade union. The boss two months before the proposed dismissal (and in cases mass layoffs- three months in advance) is obliged to notify these organizations about the upcoming event.
At the same time, the trade union must be informed both about the reduction of employees included in it, and about all other dismissed workers.
Dismissal of an employee due to reduction
After two months from the date of notification to employees, their immediate termination is carried out. labor activity. To carry out this stage, the head of the organization issues dismissal orders, as a rule, in form No. T-8. In this order, in the “Grounds” column, reference is made to the reduction order, and, if available, to the document in which the employee expressed his consent to dismissal before the end of the warning period.
On the last working day, the worker must be paid severance pay upon reduction and must be handed over work book. As for the entry in it, a corresponding note is made with reference to Art. 81, part 1, clause 2, Labor Code of the Russian Federation.
Severance pay
Severance pay in case of reduction, this is a material payment to an employee of an enterprise upon his dismissal due to a decrease in the number of employees or staff of the organization. This type of compensation includes the average monthly salary, as well as the average monthly salary retained by the employee for the period of employment, but not more than 2 months from the date of dismissal (taking into account severance pay).
In some cases, such payments can amount to three average monthly salaries: in situations where the employee registered with the Employment Center within a period of up to two weeks from the date of his layoff and was not employed after 3 months.
Severance pay when personal income tax is reduced is not taxed according to Art. 217, clause 3 of the Labor Code of the Russian Federation. The exception is payments exceeding a three-month amount wages.
By collective agreement or labor agreement, the amount of compensation for redundancy may be set higher than that established by law.
Benefit calculation
Since the payments in question amount to several average monthly wages, the amount of severance pay in case of reduction is calculated in accordance with Art. 139 of the Labor Code of the Russian Federation and Decree of the Government of Russia No. 922 of December 24, 2007, regulating the calculation of wages.
The average salary of an employee under any working regime is calculated on the basis of funds actually accrued to the employee and data on the time practically worked by him for the 12 previous calendar months.
Calendar month in in this case- this is the period of time from the 1st to the 30th/31st day of the month inclusive, and in February - to the 28th/29th.
The calculation of wages includes all forms of payments permitted by the wage system, which are used by the employer in question, regardless of their sources. The average salary of an employee cannot be less than statutory living wage.
The amount of cash payments to employees does not depend on their age, length of service or skill level. For example, severance pay when a pensioner is laid off is calculated on a general basis.
Period and charges included in the calculation
In cases where an employee works at an enterprise for less than 12 months, the time during which the person was registered in the organization is taken to calculate the average monthly salary and, accordingly, severance pay. If the worker has not worked even a month before being laid off, then the tariff rate or salary established for him is used for calculation.
When calculating the average salary, the following are not taken into account:
- the time when the employee retained the average wage, except for breaks for feeding the child, which are provided labor legislation RF;
- days on which the employee was on sick leave or received maternity benefits;
- the period of failure by the employee to perform the required work for reasons beyond his control;
- the time of a strike in which the employee did not participate, but could not perform his direct duties in connection with it;
- additional paid days off to care for disabled children;
- other periods during which the worker was exempt from performing his duties job responsibilities with full or partial retention of wages or without it.
It should also be taken into account that when calculating salary, bonuses received by the employee during the reporting period are taken into account. If these remunerations were received by a person who did not work for 12 full months, the amounts of such receipts are taken into account in proportion to the time actually worked (with the exception of those bonuses that were accrued for the practically worked period, for example, monthly or quarterly).
Additional compensation
In addition to the fact that the employee must be paid the required severance pay upon layoff, at the time of dismissal the worker is also entitled to other payments.
So, for example, an employer can, with the written consent of an employee, dismiss him earlier than the deadline established by the redundancy order. In this case, the boss is obliged to pay the subordinate additional compensation, which is the average salary of the employee, calculated in proportion to the time remaining before the end of the notice period for dismissal. Such compensation does not imply that the basic severance pay will not be paid in the event of a layoff.
Along with the specified material compensation, the employee receives a salary for the period worked and compensation for unused vacation.
Severance pay for certain categories of citizens
Labor Code The Russian Federation and other legislative acts provide for a different size of severance pay upon layoffs for certain categories of employees that differs from the general amount.
So, for example, compensation for employees working at enterprises located in the Far North or territories equivalent to them is the average monthly earnings, as well as the average monthly salary for the period of employment, but not more than 3 months from the date of dismissal (taking into account the benefit). These employees may be paid compensation for subsequent months for up to six months by decision of the employment service if the employee applied to the specified body within a month from the date of dismissal and was not employed by them.
In situations where seasonal workers are laid off, the benefit in question is two weeks' average earnings.
Other guarantees for employees upon layoffs
Along with the fact that an employee is given severance pay in the event of a reduction in staff, the Labor Code of the Russian Federation also provides other guarantees for employees in the event of a reduction. These include, for example, the priority right of certain categories of workers to remain in their workplace.
Thus, a manager, when choosing from several candidates for dismissal, must take into account that:
2. Preference is given to those employees who have greater labor productivity and qualifications. In cases where these indicators are equal, the following is left at the workplace:
- employees if they have 2 or more dependents;
- workers in whose family there are no other people earning money;
- workers who received injuries or occupational diseases at work;
- disabled military personnel;
- employees who improve their qualifications at the direction of the employer without interrupting their work.
To summarize, we can note the following:
- in the Russian Federation, the reduction procedure is regulated at the legislative level;
- The Labor Code of the Russian Federation and other regulatory legal acts establish the rules by which staff reductions, severance pay and other compensation to dismissed employees are made;
- established by law minimum dimensions severance pay and additional payments, but other, larger amounts may be established by a collective or employment agreement.
Payments upon layoffstates are called upon to financially support a dismissed employee during the period of his employment. It is not very easy to independently figure out what exactly is owed to the employee in such a situation, what the amount of payments is, and also in what time frame they are provided. We will discuss these issues in more detail in this article.
What payments are provided upon dismissal due to staff reduction?
In today's unstable economic situation, there are often cases when employers are forced to reduce staff. This could be 1-2 employees or tens, hundreds of people (for example, during the liquidation of an organization). The procedure and procedure for calculating payments are the same, regardless of the number of employees who were laid off. The issues of providing guarantees and compensation to citizens who have been laid off at work are regulated by Art. 180 part 3 of the Labor Code of the Russian Federation of December 30, 2001 N 197-FZ.
First of all, it is necessary to note the payments that are due to workers upon dismissal in the general order; no one exempts the employer from these payments. These include:
- salary not yet received for the last month of work;
- compensation for vacation that the employee did not use for any reason.
IMPORTANT! About the upcoming reduction in the workforce of workers should employer (an order is issued in writing for the enterprise, and all employees are introduced to it against signature) at least 2 months before dismissal. It is assumed that during this period of time the employee who has been laid off will be able to find a new job.
There are also compensation payments (regulated by Article 178 Part 3 of the Labor Code of the Russian Federation), which should help a citizen laid off due to redundancy to provide for himself while he is looking for new job. This:
- severance pay (calculated by the worker’s average earnings);
- payment in the amount average salary for the period while the citizen is not employed, but no more than 2 months from the date of his dismissal.
Terms of payments when laying off an employee
Let's consider in order when payments are made during layoffs. On the day of actual termination of the contract with the employee, wages and compensation for vacation that is not used are calculated based on the total amount. The payment procedure here remains the same as in a regular calculation upon dismissal of an employee.
In addition, on the day of layoff, severance pay is paid, since this benefit is guaranteed and does not depend on whether the dismissed employee is employed by another employer or not.
After 1 month from the date of dismissal of the employee, no payments are made. After two months have passed from the date of dismissal of the worker, if he has not found a job, upon his written application, the employer makes a payment in the amount of the average salary of the dismissed person. When paying such compensation, compensation already paid (severance pay) is taken into account.
Payment of severance pay in case of staff reduction
As stated above, severance pay is calculated from the worker’s salary (the average value is taken). It cannot be less than the average monthly salary. Collective or, for example, ordinary employment contract with the employee they may provide for a different amount - in the direction of increasing severance pay. Then the laid-off employee will receive exactly this benefit.
Important: payment of severance pay does not relieve the employer from paying bonuses and other incentive payments due to the employee, if they were provided for in the contract.
You should keep in mind some special cases when redundancy payments are calculated differently or are not paid at all. So, when the payment is calculated when laying off a worker who worked in seasonal work, the average salary is taken for a period of 2 weeks, not 2 months (Article 296, Part 4 of the Labor Code of the Russian Federation). Workers who have entered into a fixed-term employment contract for no more than 2 months do not receive severance pay (Article 292, Part 4 of the Labor Code of the Russian Federation). Part-time employees who have been laid off due to staff reduction (Article 287, Part 4 of the Labor Code of the Russian Federation) have the right to receive severance pay on an equal basis with others, but are deprived of benefits in the amount of the average salary for the period of employment with another employer (while maintaining their main place of work ).
The employer and employee can agree on more early layoffs than 2 months. In this case, in addition to the main compensation payments, additional payments are made to the employee who has been laid off. Additional compensation is calculated in proportion to the time that the employee did not work before the generally assigned deadline, also based on the average salary. Other required benefits (severance and for the period of placement with another employer) are also paid.
Payment of average earnings for the period of employment with a new employer
Situations often arise when, 2 months after being laid off from a previous job, a worker has not found a new employer. In this case, as stated earlier, he is entitled to a benefit in the amount of the average salary for the period of job search (but not more than 2 months), this guarantee is provided by Art. 178 part 3 TKRF.
However, it happens that a new job was found in the middle of the month, how to calculate the payment? In this case, the redundancy payment is calculated in proportion to the time spent searching. That is, if an employee was employed by a new employer on the 7th, then the average payment will be calculated for the 6 days of the month during which he was still looking for work.
There is an exception, and the average monthly payment (by decision of the employment service) can be extended for another 1 month (i.e. to the 3rd) if the conditions are met:
- the redundant employee was registered with the employment authorities within 2 weeks from the date of dismissal;
- within 3 months the employment authorities did not find him a job.
So, we have looked at what payments are due when an employee is laid off, be it a reduction in the number of employees or staff, or the liquidation of an enterprise. The problem of layoffs at work will not be so acute for you if you receive all the required payments in full.
At the initiative of the employer, the dismissal of an employee may occur in the event of a reduction in staff or numbers, and prerequisite such dismissal must be competent documentation dismissals - notification of the employee within a certain period, offer of vacancies. In addition, severance pay must be paid upon dismissal due to staff reduction (clause 2, part 1, article 81 of the Labor Code of the Russian Federation, part 1, article 178 of the Labor Code of the Russian Federation).
Dismissal procedure due to staff reduction
Quite often, dismissal on this basis is contested by the employee due to non-compliance with procedural issues. What is necessary for fair dismissal?
First of all, there must be a real reduction in staff in the organization, that is, the position being reduced must be actually excluded from staffing table, and not renamed. This may be the case if some of the job responsibilities no longer need to be performed, and the rest is redistributed among other employees. In addition, it is necessary to inform the employee in advance, at least two months in advance, about the dismissal against signature, and offer vacant positions (Article 180 of the Labor Code of the Russian Federation). A mandatory element of the dismissal procedure is the payment of severance pay in case of layoffs and the preservation of average earnings for the period of the second, and in exceptional cases, the third month of employment (Article 178 of the Labor Code of the Russian Federation).
Amount of severance pay
The obligation to pay severance pay is determined by law. At the same time, the internal documents of the organization may provide for increased severance pay for certain situations or for individual categories workers, for example, benefits may be higher for workers who have worked for many years at the enterprise. In addition, the employment contract with the employee or an additional agreement may indicate the payment of severance pay that exceeds that established by law.
But regardless of the provisions of local acts or categories labor worker There is a mandatory procedure for calculating the amount of severance pay in the event of a layoff, and this procedure did not change in 2017.
Upon dismissal due to staff reduction, among other payments, the employee must be paid severance pay in the amount of average monthly earnings. In addition, if a former employee does not find a job, he will be able to receive benefits for another month, and in exceptional cases, for a third (Article 178 of the Labor Code of the Russian Federation).
But besides general rule, which determines the amount of severance pay, provides for specifics in relation to certain categories of employees:
- if there is a contract with the employee fixed-term contract for a period of up to two months, the benefit is not paid;
- if this is a seasonal worker, then severance pay is paid in the amount of two weeks’ earnings (Part 3 of Article 296 of the Labor Code of the Russian Federation);
- if the organization is in the Far North region, then payments can be made to the employee even if he was unable to find a job within six months (Article 318 of the Labor Code of the Russian Federation);
- if managers, their deputies, and chief accountants of state and municipal companies are laid off, then the amount of severance pay is limited to the maximum amount - three times the average monthly salary (Article 349.3 of the Labor Code of the Russian Federation).
Terms of payment of benefits upon dismissal due to staff reduction
Payment of benefits is made on the last day of work along with the due wages and compensation for unused vacation.
The basis for payment of benefits for the second month will be the work book of the laid-off employee, confirming that the employee is not employed. It is recommended to obtain an application from former employee with a copy of the work record attached. Payment for the third month is made only based on the decision of the employment service.
But as for the payment period, the legislation does not indicate when the payment must be made. Taking into account the fact that the employee applies for payment after the expiration of the period specified in the legislation, that is, at the end of the second and third months, the date of payment can be agreed upon additionally and indicated in the employee’s application.
What compensation is due upon dismissal due to staff reduction in 2018? Which article of the Labor Code of the Russian Federation regulates the procedure for calculating and paying compensation? Is such compensation due to part-time workers? We will answer the most common questions and give an example of calculation.
Dismissal due to reduction: the essence of the measures
An employee can be fired if his position or number of employees is reduced (clause 2, part 1, article 81 of the Labor Code of the Russian Federation). But what is the difference between job reduction and downsizing? Let's explain in the table.
Attention
Reduction in headcount and staff reduction are grounds on which an employee can be dismissed at the initiative of the employer (clause 2 of Article 81 of the Labor Code of the Russian Federation). The employer has the right to make a decision to reduce the number or staff at any time and is not obliged to justify it to employees (clause 10 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated March 17, 2004 No. 2).
What should be paid to employees upon redundancy?
In the event of a layoff, a dismissed employee is entitled to the following types of cash payments:
- wages for the time he worked in the month of dismissal;
- compensation for unused vacation (if any);
- severance pay - in general, in the amount of average monthly earnings (Article 178 of the Labor Code of the Russian Federation).
Also, the employer is additionally obliged to maintain the average salary for the period of employment, but not more than two months from the date of dismissal (including severance pay. Such payment is due provided that the employee is not a part-time worker, a seasonal worker or a person with whom an employment contract has been concluded for a period of within 2 months.
Keep in mind
In some situations, the employer is obliged to maintain the average monthly salary for dismissed employees during the third month from the date of dismissal. However, this requires a decision from the employment service. And only if the employee applied to the employment service within two weeks after dismissal and was not employed by him (Part 2 of Article 178 of the Labor Code of the Russian Federation).
It is worth noting that for those working in the Far North and equivalent areas, the paid period of employment after layoff is longer. It can reach up to six months after dismissal due to reduction (Article 318 of the Labor Code of the Russian Federation).
How compensation is calculated for redundancy
Severance pay: calculation
To calculate severance pay, you need to take into account the earnings of those being dismissed in the pay period. For severance pay upon dismissal, the calculation period is 12 calendar months before the month of dismissal (clause 4 of the Regulations, approved by Decree of the Government of the Russian Federation of December 24, 2007 No. 922). That is, if you dismiss an employee, for example, on February 20, 2018, for the calculation you will need to take the period from February 2017 to January 2018.
Features of determining the billing period
There are some features of determining the billing period:
- if the employee quits on the last day of the month. Then calculate the average earnings for the last 12 months, including the month of dismissal. So, if you are dismissed on October 31, the calculation period is from November 1 of last year to October 31 of the current year (Letter of Rostrud dated July 22, 2010 No. 2184-6-1);
- if the person did not work throughout the entire billing period - for example, he was sick or was on maternity leave. Then the billing period must be replaced by 12 calendar months preceding the last month when the person went to work (clause 6 of the Regulations on Average Earnings, Letter of the Ministry of Labor dated November 25, 2015 No. 14-1/B-972).
The final amount of severance pay is determined by the formula (clause 9 of the Regulations, approved by Decree of the Government of the Russian Federation of December 24, 2007 No. 922):
Severance pay = amount of earnings for the pay period / number of days worked in the pay period x number of working days in the paid month (after dismissal).
Let us give an example of calculating severance compensation upon dismissal due to reduction. Loginov A.S. dismissed on 02/03/2018. In the billing period - from 02/01/2017 to 01/31/2018 it was:
- from April 4 to April 12 – on sick leave;
- from June 20 to July 17 – on vacation.
Simonov worked the rest of the time. During the billing period he was accrued:
- salary – 300,000 rubles;
- vacation pay – 24,000 rubles;
- sick leave benefit – 7,000 rubles.
The number of days worked during the pay period is 222. The base for calculating severance pay is 300,000 rubles, since vacation pay and benefits are not included in it.
Average daily earnings – 1,351.35 rubles. (RUB 300,000 / 222 days). The number of working days in the first month after dismissal (from 02/04/2018 to 03/03/2018) is 18. Based on the calculation results, the severance pay will be 24,324.3 rubles. (RUB 1,351.35 x 18 days).
Are working days or calendar days used for calculating severance pay?
Some judges believe that for salaried employees, severance pay should be calculated taking into account non-working holidays. For example: an employee was fired on December 31, 2017. In January 2018, with a five-day working week 15 working days. To avoid disputes, it is safer to pay severance pay based on 23 working days, that is, taking into account holidays from January 1 to January 8, 2018. Similar conclusions follow, for example, from the appeal ruling of the St. Petersburg City Court dated September 24, 2015 No. 33-14501/2015.
Vacation compensation
Compensation for unused vacation upon dismissal is calculated according to general rules. That is, the fact that this compensation is payable in connection with staff reduction does not matter. Therefore, we will not describe the calculation procedure in detail in this article. Just apply this formula to the calculation (Article 127 of the Labor Code of the Russian Federation)
Compensation for unused vacation = number of unused vacation days X average daily earnings.
At the same time, we recommend that you pay attention to the features of calculating leave compensation upon dismissal for those who have worked less than a year, but more than five and a half months. When calculating compensation in such cases, determine the number of unused vacation days using the formula (Letter of Rostrud dated March 4, 2013 No. 164-6-1):
Number of unused vacation days = duration of annual leave – number of vacation days used
It turns out that if an employee worked for five and a half months or more and was not on vacation, then upon dismissal due to staff reduction in 2018, he is entitled to compensation for full vacation.
Heavy economic situation in the state is forcing many companies to reduce the number of employees. Many unscrupulous employers fire workers for far-fetched reasons, trying to ensure that they do not get laid off. After all, an employee dismissed due to staff reduction will have to be paid. Payments upon layoff of an employee 2017: an example of calculation and its terms will be indicated in this review. In order not to “fall for the bait” of an unscrupulous employer or not to accept inspection bodies in your company, after a complaint from an illegally dismissed employee, carefully read our recommendations.
What kind of payments are due?
A resigning employee is always entitled to two payments:
- salary for the current month worked;
- compensation for unused vacation (if it is available and actually not taken off).
When an employee is laid off, the Labor Code provides for additional payments:
- Severance pay equal to average monthly earnings. It is paid even to those who immediately found a new employer.
- Average monthly earnings for the entire period of searching for a new employer. This compensation payment is issued over two months. This payment also includes severance pay.
- Special situations require payment of average earnings for the third month for laid-off workers. This compensation is fair for those employees who, no later than two weeks after the layoff, registered with the employment exchange, but it was unable to provide them with work within three months. The decision on such payment is made by the employment center.
- Compensation payment for early dismissal. According to the Labor Code of the Russian Federation, the employer notifies the employee whose position will be reduced two calendar months in advance. But in the case when both parties agree to early dismissal, without waiting for the end of the two-month period, the employee can leave earlier. Then, from the date of departure until the end of the two months stated by management, compensation is calculated. The calculation is based on the average monthly salary of the employee.
A sample notice sent to a laid-off employee can be seen below.
Time limits for payments
Now we know about due payments and approximate amounts, but we do not know how long it will take to receive or pay them. Let us designate the terms allotted for payments when an employee is laid off in 2017:
- Severance pay, included in the average monthly salary, is paid to the redundant employee on the last working day. Along with it, compensation for vacation and the last salary are issued.
- Payment for early dismissal is also issued on the last day of work, but only if it is due.
- The average earnings for the second month after the layoff will be received only by those who have not found a job in the past period of time. This payment is provided after two months from the date of dismissal when contacting former employer. A document confirming the lack of employment is a work book, which does not contain a record of a new place of work.
An example of calculating payments to a redundant employee
All payments due to a redundant employee are usually calculated based on the average salary. It is determined by the formula:
Average payment = Sum of all payments for the 12 months preceding the date of layoff / Number of days worked in 12 months
Please note that sick leave and vacation pay are not included in the calculation.
Calculation of severance pay:
Severance pay = Total amount of working days in the first month after dismissal x average daily earnings
If you need to pay benefits for the second and third months, you can use the same formula, only recalculating the number of working days for the subsequent calendar period.
Compensation for early dismissal is easily calculated using the formula:
Compensation payment = Working days from the date of dismissal until the end of the two-month period x average monthly salary
Payments due to an employee who has been laid off are not subject to insurance contributions and personal income tax if their total amount does not exceed the average monthly earnings multiplied by three. For amounts exceeding this limit, all necessary deductions are made. Formula for non-taxable limit:
Non-taxable payments = Sum of working days for three months after layoff x Average monthly earnings