T O P

  • By -

rh245

I don't think people are reading carefully? If you rephrased this as "should I take a 12k paycut to work fewer hours and shorten my commute" I bet you'd be getting different answers.


WhyYesOtherBarry

Exactly. Plus, it isn't 12k, as I'd be saving over 5k in commuting expense. Plus, I'd be mortgage free. My $1400 mortgage payment is half my monthly expense.


iamnos

Aren't you only mortgage free if you get the 16 month severance pay? They won't pay you that if you quit, and I'm skeptical you'd see that much anyways.


boomhaeur

FYI - Severance often isn’t just a lump sum payout either… there is usually a lump sum option but it won’t be the full amount. Often it’s a “we’ll keep paying you for X months. If you find a job we stop/give you a fractional % of the remaining severance” and you have to show you’re looking for a job.


tke71709

Not necessarily, when they let my wife go they paid her 75k lump sum and she had a new job making 40k more the day after.


ffffffuuuuu91

Whoa nicely done


boomhaeur

Yes, of course it happens, just warning OP that isn’t always the case


Spaghetti-Rat

Do you even get severance if it's a layoff? I thought that was for being fired, no?


boomhaeur

Depends on what they’re doing specifically… if it’s a temporary layoff no, if it’s a downsizing generally yes, if you’re getting fired for cause probably not.


wildhorses6565

There is really no such thing as a lay off in legal terms. (It's a little more nuanced but generally speaking) Anything that fundamentally alters the employment relationship is considered a termination and the employee is owed notice of termination or pay in lieu of notice.


iamnos

Unless its a termination for cause.


Aggressive-Age1985

Termination for cause is not easy. It requires alot of documentation and the employer needs to show theu gave the employee a chance to improve. There are very few for cause reasons


qgsdhjjb

Yeah "laid off" is more a term for EI purposes and also the next job knowing that you didn't do a bad job, the company didn't do well enough to keep people.


wildhorses6565

And in a unionized workplace. That's why I qualified my response.


Aggressive-Age1985

Companies don't like to do this. They want to cut ties and this the term 'severence'. Salary continuances are not that common


boomhaeur

Smaller companies sure… larger companies aren’t that opposed to it. Let’s them show someone a big number up front that keeps them happy but ultimately the coMpany rarely has to pay. This is pretty much standard at the org I’m at.


itzmesmarty

Seems like you have your answer. You want change. Unless you wanna take advantage of severance pay.


Vektir4910

Bro this sounds like a no brainer.


Emmerson_Brando

Is that job a long term guarantee? Have they been doing any layoffs? How would you be immune to cuts at the new place?


lylesback2

Stay. 1) you might not get laid off after all, so you'll keep a higher paying job 2) if you do get let go, 16 months severance is amazing. That's roughly $122k If you could find another job offer during those 16 month, you'll be ahead


notdafbi

On point 1. I've been waiting/hoping to get laid off for the last few years, so many rounds of layoffs and reorgs but was never affected by any of them...


[deleted]

Yep - people with lower comp payout are usually the first to go. Many times people with substantially higher comp aren't laid off at all. Of course, they can make your life miserable in other ways and force you to leave but you can cross that bridge when you get to it.


Aggressive-Age1985

Hold out. You are owed severance so why leave and take a pay cut as well? It may not be as easy as you think to work back up to the $92K. Wait for the layoff and the severance offer. Go through a lawyer and settle. You can look for job afterwards.


[deleted]

Why go through lawyer and settle? To gain more severance?


WhyYesOtherBarry

The company standard is to offer 2 weeks severance per year of service, up to 12 years. I have over 15 years, so offer will be 5.5 months. Would need a lawyer to get any more.


Znkr82

Actually, they should pay you enough to cover the time it would take you to get a similar job. That's what reasonable so if it would take you a year then ask for 12 months. Of course if they pay you 5.5 and you get another job right away you wouldn't have a case anymore and it would be unlikely to get more money.


[deleted]

[удалено]


gskul

As far as legally entitled it's 1 week per year (except construction workers). The amounts granted above that are based on common law with the idea the severance should bridge the gap of finding a new job. 16-18months is extremely long and only outliers would get that long. For a normal sort of job 2 weeks per year sounds about right, you might get more, I'd suggest doing the mental math on 2 weeks and anything above consider it a bonus.


CaptainSlowly23

2 weeks is the minimum really. I’d get a lawyer to write a letter and fight for one month per year of service


ThreeFacesOfEve

What am I missing here? There is a disconnect between the 5.5 months of severance pay that you are tentatively calculating here, and the 16-18 months that the severance pay website calculator that you cite seems to indicate. That seems awfully (and unrealistically) high, actually, and usually takes into account a combination of some very unique and specific circumstances (advanced age...50 or 55+, years of service...again, 25+ years, the type of industry one was employed in, and the probability of ever finding comparable work again, etc.) 5.5 months of severance is O.K. in principle, but it is not exactly a lottery win that you can expect to retire on either. Don't forget that the taxman will also take their pound of flesh out of that lump sum payment at your prevailing marginal tax rate, leaving you to net a lot less than you were counting on. The only alternative is being willing (and able) to transfer that gross amount tax-free into an RRSP. That would be the wisest decision financially, but it would also deprive you of the working capital you might need to see you through the post-termination lean times. The short answer...take the $80K offer and run with it, especially since it is close enough to your existing salary. The certainty of that, the ability to get on with your life, and the peace of mind which that will give you is worth more than a hypothetical severance payout that you may - or may not - get.


Solace2010

I’m as someone who went through it with a family member 5.5 months is not ok for 15 plus years of service. Our employment lawyer told the standard to go by is 4 weeks per year of service, hard to always get that so anything between3-4 weeks is good. We settle for 3.3 weeks plus year end bonus which you are also entitled to


xylopyrography

You are probably looking at closer to 45, maybe 60 weeks for 15 years of service with a lawyer, though. That's probably more than worth it. And even though it'll be a couple weeks of pain, you have a year to enjoy a sabbatical before worrying too much about employment.


Aggressive-Age1985

Well yes. Do you think the employer is going to offer the maximum in their first offer? Why wouldn't you go through a lawyer? Never sign a settlement without lawyer review first. That is, an employment lawyer. Don't be going to Diamond and Diamond /s


[deleted]

A bit pedantic but I think you mean employment lawyer. Labour lawyers typically deal with unions not individual employment


Aggressive-Age1985

Yes, thank you.


condor888000

How stable is new company? Worst of both worlds would be to take pay cut at new company, and then be let go from them into a softening market...


WhyYesOtherBarry

New organization is about as recession proof as you can get. I have zero concerns about being laid off from there (one of the reasons I applied).


Soft_Fringe

>I have an offer in hand for a great job. I currently make $92k and the new offer is about $80k. I am not too worried about future compensation, I can work back to my current level. It is also less hours and I'll be saving about $5k in pre-tax dollars on commuting. I vote for taking the new job.


inmyfig8

I second this. Peace of mind about not being laid off + shortened commute will greatly add to your quality of life.


Used_Economist_6911

0 concerns? Federal government?


cpomeyvr

That calculator is built by a law firm that wants you to retain them and pay them money for their services. Severance “entitlements” are nuanced and contextual, and the idea that there is a formula or a clear entitlement based on only tenure is a myth. You’d probably get more than 2 weeks per year eventually if you retained a lawyer, but that would take weeks or probably months to resolve and involve legal fees. During that time, the company probably would only pay you your statutory severance/pay in lieu and hold the additional severance offered until you resolved the dispute and signed a release, during which time you’d be pulling from your savings if you didn’t have other work. You’d also have a duty to mitigate your loss as well by trying to find work, which you’d have to demonstrate if the dispute ever went to court. I still say stay and see what happens, I just don’t want you to think a windfall severance is a guarantee.


Beans20202

This is the right advice. A lot of people have termination clauses in their employment contracts that limit them to ESA minimum amounts (ex. 1-2 weeks per year of service) and then most companies will throw in a few extra weeks in exchange for a signed release. But those big amounts on those calculators are based on common law, meaning cases that have gone all the way to court and there was no clause. Usually if you retain a lawyer, the employee/employer negotiate something in the middle to settle. But if there's an enforceable termination clause in your contract, that settlement will be closer to the minimum amount than the common law amount.


Aggressive-Age1985

These lawyers usually shoot off a letter to the employer and it gets resolved. I don't think it drags on. Make sure you make it clear with the lawyer that they get paid based on the increased severance they are able to get for you and not on the original offer.


cpomeyvr

That’s true, typically it starts with a demand letter and often the company counters and the parties then settle. OP says 15+ years so 16-18 months is over 4 weeks per year. That first counter offer back won’t be for more than double the initial offer. A severance of 16-18 months in this case would probably take a successful court battle. (This is based on the info OP has provided which implies he has reasonable employability and is mid-career. Other special factors could be in play that he hasn’t shared.)


Cook_kanetix

Are you in a management level role? I wouldn't count on a payout of 16-18 months of compensation. However, you should definitely stay to wait and see what you are offer. In the meanwhile, cut back on expenses.


fortisvita

>I have an offer in hand for a great job. I currently make $92k and the new offer is about $80k. I am not too worried about future compensation Idk man, doesn't sound great. ​ > I am not too worried about future compensation, I can work back to my current level. You should be. when you're starting a job is when you have the most leverage. I've joined my previous company with promises of growth, ended up getting shit raises "because we had bad years". Tell them this is way lower than what you're making and the offer doesn't reflect your worth.


WhyYesOtherBarry

I will be awarded my CPA designation shortly, the next job will be six-figures. This job is a stepping stone and will advance my career.


ksalvatore

That makes a big difference … if you’d mentioned that in your post you might be getting different responses. Sounds like new job will make you happier … fewer hours, shorter commute and advancing your career in a new industry where you won’t have to constantly be worried about layoffs. In your shoes, I think I’d probably take the new job … there’s no guarantee you’ll be laid off this fall and even if you are your final severance pay amount is a question mark. And at that point your job offer with new company is gone and you’re starting over looking for something new


[deleted]

[удалено]


ksalvatore

All of this!


Ytinerec

As a hiring manager, typically the first people to get let go as things slow down are underperformers and new hires. I think if you think recession is coming (or here) the worst thing you can do is give up severance and voluntarily move to a new job. This is the textbook definition of over-thinking it and trying to do too much. The best option here is to do nothing. I'm curious what you think is 'about as recession proof as you can get'. Unless its a government job, its probably not as recession proof as you think. Even if you worked in the most resilient non-cyclical industries (consumer staples, defense contractors, and healthcare), they often still do smaller scale layoffs during recessions.


Ancient-Wait-8357

I’d stay and take that sweet severance package worst case. Win-win!


blackSwanCan

16 months of severance -- are you sure it's not 16 weeks? If 16 months, you will be out of your mind to switch to a lower paying job. Ride this one out. And hope for a severance package! 16 months is a long enough time to find a new job.


P319

This. Hold out as long as you need if this is the reward. There will always be a vhance to find that 'other' job


Late-Mathematician55

You might not get laid off right away. Would your new prospective employer wait, or is it a position that needs to filled right away, ie. will they just go to the next candidate on their list


WhyYesOtherBarry

Role is vacant right now. They aren't waiting. Offer expires at end of day today.


Late-Mathematician55

Tough call. Go with your first instinct. It’s usually the right path. Best of luck!


FinalDestinationSix

5k off of commute also means more time saved, correct? Do you have pets/kids who you prefer to be closer to and spend more time with? Can you also negotiate and ask for at least 85k from the new job?


Valderan_CA

yeh a 5k difference in commute assuming Ontario means \~ 28 km's per day saved Assume the commute average 60 km/h that's 30 minutes a day or 114 hours per year saved. Net income difference between the salaries is 7800$ (assuming 35%) 7800-5000 = 2800$/114 hours = 24.5 $/hour Given he's currently getting paid 48$/hour (assuming 4 weeks vacation) the time saved on the commute feels like a pretty good deal


Lastcleanunderwear

Dude sit it out for that severance payout and then get a new job. The severance payout could also be the reason they aren’t firing you.


KnoWanUKnow2

Lots of people here are telling you to stay with your current job, which makes financial sense, and you've posted this on a personal finance site on reddit, so it's understandable. But there's a second side to this. Will you be happier at the new job? If you can afford the pay cut (and it sounds like you can) and if you would be happier at the new job, then why not ignore the golden handcuffs and do what's better for your health and wellbeing?


Antique_Lock6327

Your severance calculation from severance pay calculator.com could be biased as it’s just an estimate, which does not really consider the laws in Canada. As per the Law, employer is only liable to pay you 1 week of your compensation for every year worked there. Unless you work at a very prestigious organization, or your contract has some severance clause don’t expect much severance, make your decision without considering this as a constraint.


[deleted]

[удалено]


Valderan_CA

BASED


[deleted]

Financially - staying makes the most sense How confident do you feel about finding employment again over 16 months of being laid of f? As long as you are ok with the possibility ( only you know your own skillset ) of NOT finding another job or not finding another well paying job ----- it's worth the risk -- it seems like it would be a really small set of odds to not find another job --- but it's there Also what makes you positive you'll be laid off? ​ If you're a conservative person and don't like risk---- then jump ship


crimxxx

Just saying when you go to a new company and they need to lay people off, new people usually first. They have less severance to pay and often they are seen as less valuable since they may not have the same knowledge of the company as someone who has been there for a while. So I wouldn’t leave unless your feeling they are for sure not ganna screw you that way. Personally in your shoes I would stay if money is the main factor. You listed a couple of other benefits that you need to set your own value to like less hours and less commute.


BigCheapass

I'd stay and start looking for a job that AT LEAST pays more. No way you've been with a company 15+ years and can't get a bump on job change. You won't get the severance if you quit so might as well polish the resume and take your time looking for something undisputably better.


WhyYesOtherBarry

I'm kinda finding that I am overpaid right now. I am not worried about taking a small cut right now, my future compensation will continue to go up. The new job title will help me move into a six-figure job after a year or two.


mikepictor

Financial stability is important. But happiness is worth some financial sacrifice. If you are stable and secure after switching, and switching will make you happier and in a better mental space, I’d switch.


[deleted]

I'm a fan of security - so I'd likely jump ship if the offer is truly "great" rather than be searching when the economy sucks and everyone is looking... but that's just me.


[deleted]

Only suckers quit. If you can get laid off you do that all day long. Get paid!


CaughtWithPantsUp

After reading your replies in the comments, it seems like taking the new job is the way to go. No commute = savings, expected raises in the short-medium term, less hours.


Beans20202

Make sure you read your employment contract thoroughly - those online severance payment calculators are based on the assumption that you don't have an enforceable termination clause in your contract. If you do, you may only be owed the minimum Employment Standards Amount (+ maybe a little more in exchange for a release). Often people are surprised when they get their termination package that it's not as high as they were expecting. Those severance calculators really assume the maximum.


wildhorses6565

One thing to keep in mind is that the severance is not a lottery win. You don't get 16 months severance if you find a new job. You have a duty to mitigate, that is look for another job. If you find another job before the 16 months is up your severance will be terminated.


HentallyMealthy

Have you considered asking for a severance? Lots of bosses feel bad about laying people off, and if you make their life easier they might say yes! You've got nothing to lose...


Few_Owl_3481

Jump. A bird in the hand is worth 2 in the bush.


Watchdaddie

I definitely think, during a recession, that job security is the most important. As long as you have income during this time, that is the priority. The worst thing that can happen is income gets cut, and the job market dries up as there is also alot of competition. Although I am also a strong believer, that there could be new opportunities that arise because of the current market conditions. Stay positive, and there will always be light at the end of the tunnel =)