Dismissals for various reasons, including due to downsizing, can affect absolutely everyone. If this happens on the initiative of the employer, which, as a rule, happens unexpectedly, then the Labor Code provides for the payment of some remuneration.
In fulfillment of the rights of workers
Severance pay upon dismissal is paid on the day of termination of employment. Amounts are floating depending on a number of reasons and are also regulated by the Labor Code of the Russian Federation.
As a rule, such payments are classified as guaranteed. Meanwhile, they are understood as lump-sum or periodic payments. Their goal is to ensure fulfillment of obligations or to prevent loss of wages in the event of dismissal of an employee from his post, including due to circumstances beyond the control of the employee. Severance pay carry a slightly different semantic load. They are paid, as it were, in accounting for the future, which is outside the jurisdiction of the employment contract. It is also worth noting that the employee can get another job the day after leaving his job, but he will still be paid severance pay.
Such remuneration has nothing to do with salary, as it does not take into account the quality of labor and the amount of time spent on it. Compensation for these payments can not be called either, because it involves the costs incurred in connection with work, for example, to move to another city or country. And the allowance is not associated with any costs to the employee.
Thus, severance pay is more likely at the junction of labor law and social security. And the main goal in this case is to help a former employee who lost his job, and therefore his source of income, not through his own fault or initiative.
Another important element taken into account when calculating the severance pay upon dismissal is the status of the employer: legal entity or individual entrepreneur.
Grounds for payment
Russian labor law provides for a fairly wide range of grounds, as a result of which severance pay is paid upon dismissal. Such grounds include downsizing of the enterprise, liquidation or bankruptcy of the organization. Refusal of an employee to transfer to another job for medical reasons, a conclusion on the recognition of an employee as incapable of this labor activity, conscription to the army, refusal to move to work in another region - all these reasons provide severance pay upon dismissal.
In addition, if a previously dismissed employee recovered at his or her lost place of work by a court decision, the manager must pay him the appropriate allowance.
Additional sanctions to employers
Changes in labor agreements are also subject to sanctions, as a result of which the employee loses the opportunity to continue his professional activities. In addition, they apply if the organization violates the rules when hiring a job, which implies the inability of the employee to take up his position or move to another job.
Such violations include the conclusion of an employment agreement with those who are forbidden to engage in a certain type of activity, who cannot work in specific positions for medical reasons.This also applies to those who have been hired with specialized requirements without an appropriate diploma and who are prohibited from holding any positions for certain reasons.
The importance of an employment contract
There are reasons why the payment of benefits may not apply to an individual entrepreneur, unlike an organization. If occurs dismissal of reduction severance pay will depend on whether this item is spelled out in the employment contract. The amount of payment must also be indicated in the agreement. However, if this paragraph is not provided, then there will be no severance pay. The same is true in the case of the liquidation of an individual entrepreneur.
Payout amount
The calculation of the severance pay upon dismissal depends on the reasons why it became necessary to make payments. Reduction of staff, liquidation of the company, as well as violations by the employer when concluding the labor agreement provide for the payment of benefits in the amount of average monthly earnings. This rule does not apply to seasonal employees. For them, the size of the severance pay upon dismissal is the size of the average two-week earnings. This also applies to those who get a job for up to two months. They receive benefits only if it is prescribed in the labor documents, if not, it is not paid.
For all other reasons, the payment will be the size of the salary, calculated on average for two weeks. You can calculate the severance pay upon dismissal on your own, relying either on an employment contract or on the Labor Code of the Russian Federation.
Extra bonuses
Such dismissal clauses as staff reduction and liquidation of the enterprise provide, in addition to the severance pay, also additional payments. Within three months prior to employment, the dismissed employee has the right to pay monthly earnings. Citizens living and working in the Far North are legally entitled to such payments within six months from the date of dismissal. In order to receive money, it is necessary to provide evidence confirming the fact that the employee is still unemployed. This proof is a work book.
If after three months the former employee has not yet found a new position, the Employment Center may decide to extend the payment of benefits by the former employer for another three months.
Separately, the Labor Code sets out guarantees for laid-off workers who were elected to the trade union. Cash payments are also anticipated if the powers of an elected office are terminated early. The employee must receive either his previous position or equivalent if he agrees. If it is not possible to fulfill these conditions, then his average monthly earnings for the period prior to employment, but not more than six months, are retained. If the dismissed employee is an elected member of the union, is studying or is undergoing further training, the payment of average earnings can be kept for up to one year.
Relaxation for top management
According to labor law, the average three-month salary in the form of severance pay is paid to the director of the organization, his deputies and the chief accountant if the dismissal occurred due to a change of ownership. Also, the former top manager receives a similar remuneration if the owners or their authorized persons made a decision to terminate the employment contract without the presence of guilty actions on the part of the ex-manager.
Tax Disagreements
When is severance pay paid upon termination, are taxes taken into account somehow? This issue raises a number of contradictions. As experts in the field of tax law explain, these payments are not taxed.It is also worth noting that under the Tax Code, severance pay upon the dismissal of personal income tax is taxed in a number of cases. According to representatives of the Federal Tax Service, these are average monthly payments for the period of employment, payments to the head, his deputies and accountant.
It all depends on the wording
With regard to the collection of severance taxes and fees, there are different views. In question termination of the agreement by agreement of the parties, according to experts, everything will ultimately depend on the wording used in the labor agreement. So, if the document says precisely “severance pay upon dismissal,” you probably have to pay the treasury 13 percent of the amount of three times the salary.
On the other hand, when hiring, you can agree on the wording “compensation payment in connection with the dismissal”. And then in the event of dismissal, it will really be difficult to guess the decision of the tax authorities. On the one hand, the Tax Code does not provide for the collection of taxes on such grounds. On the other hand, it must be fixed by the applicable law. However, the RF Labor Code does not provide for payments of this kind.
Social contributions
When severance pay upon dismissal is paid, contributions may not be provided. Uncertainty is connected with the fact that even accountants themselves do not always know whether or not to make insurance contributions from compensation payments related to dismissal. Under federal law, they should not be subject to insurance premiums. Meanwhile, the uncertainty of accountants is due to the fact that the grounds for dismissal, as well as for payments, can be very different.
Currently, all types of such remuneration established by law are not subject to insurance premiums, with the exception of compensation for unused vacation.
international experience
To date, the world experience in regulating labor relations has a rather large accumulated base. And each state can find a lot of useful things for itself here. For example, Russia as a country aiming at a socially oriented market economy, as well as creating a civilized labor market, could reflect on expanding the list of grounds for severance pay, as well as revising methods for calculating payment volumes.
It also makes sense to pay attention to the fact that the payment of benefits can be considered not only as an opportunity to help a former employee in case of loss of work, but also as a way of remuneration for the efforts and motivation of employees. Among other things, it would be worthwhile to pay attention to the fact that in world practice the size of the severance pay directly depends on the experience gained.
