By Dessie Barton
Termination pay remains one of the highest-risk areas of compliance for BC employers. In practice, many Employment Standards Act (ESA) complaints in 2026 are triggered not by underpayment but by timing, documentation, and calculation errors.
This article outlines how termination pay works in BC today, when it’s required, how it’s calculated, and where employers most often get tripped up.
What Is Termination Pay?
Under the BC Employment Standards Act, termination pay is the minimum compensation an employer must provide when ending an employee’s employment without sufficient working notice.
Termination pay is intended to support employees during the transition out of employment. It is a statutory minimum, not a cap on what an employee may be entitled to under contract or common law.
When Is Termination Pay Required?
Termination pay is generally required when:
- The employer ends the employment relationship (without cause),
- The employee has been employed for at least three consecutive months, and
- The employer does not provide adequate working notice.
Termination pay is not required in certain circumstances, including:
- Voluntary resignation
- Termination for just cause (a very high legal threshold)
- The natural expiry of a fixed-term contract
- Certain temporary layoffs that meet ESA requirements
How Much Notice or Termination Pay Is Owed?
Under the ESA, termination notice or pay is based on length of service, increasing gradually with tenure to a maximum of eight weeks.
Rather than memorizing a full chart, the key takeaway for employers is this:
- Employees with 3 months to under 1 year are entitled to at least one week
- Entitlement increases incrementally with each year of service
- The ESA maximum is 8 weeks, regardless of length beyond that
Employers may provide:
- Working notice
- Pay in lieu of notice
- A combination of both
How Termination Pay Is Calculated
Termination pay must be based on the employee’s regular wages.
This typically includes:
- Base salary or hourly wages
- Regularly scheduled hours
- Non-discretionary commissions or earnings that form part of normal pay
It generally does not include:
- Overtime premiums
- Discretionary bonuses
- Expense reimbursements
For employees with variable hours, termination pay should be calculated using an average weekly wage, based on recent earnings.
Final Pay Deadlines (Where Employers Often Slip)
BC has strict timelines for issuing final pay, and this is one of the most common areas of non-compliance.
- Employer-initiated termination: final wages must be paid within 48 hours
- Employee resignation: final wages must be paid within 6 days
Final pay must include:
- Outstanding wages
- Termination pay (if applicable)
- Accrued and unused vacation pay
Termination Pay vs. Severance (Important Distinction)
In BC legislation, the ESA refers to termination pay, not severance. This distinction often causes confusion for employers, especially during terminations involving long service or senior roles.
- Termination pay = ESA minimum entitlement
- Severance / common-law notice = additional compensation that may apply unless validly limited by an enforceable employment agreement
An employer can only limit common-law exposure through properly drafted and legally compliant contracts.
Group Terminations
Special rules apply if an employer terminates 50 or more employees at a single location within a two-month period. Additional notice obligations apply, and the Employment Standards Branch must be notified in advance.
Common Termination Pay Mistakes in 2026
We continue to see employers run into trouble by:
- Miscalculating the length of service
- Relying too quickly on “cause” without meeting the legal threshold
- Issuing final pay late
- Excluding vacation pay from final wages
- Using outdated or unenforceable termination clauses
- Inconsistently applying termination practices across employees
Many of these issues surface only after a complaint is filed.
Best Practices for BC Employers
From our work with 300+ BC employers, the following practices consistently reduce termination-related disputes and complaints:
- Review termination clauses in employment agreements
- Prepare final pay calculations before termination meetings
- Confirm the length of service carefully
- Avoid cause-based terminations without legal advice
- Use a consistent termination checklist
- Train managers on ESA termination obligations
Why This Matters
Termination errors are costly, not just financially, but reputationally. Employees remember how their employment ended, and mistakes can quickly escalate into complaints, audits, or litigation.
Handled properly, terminations can be compliant, respectful, and defensible.
Need Support with Terminations in BC?
At Pivot HR Services, we support employers across British Columbia with termination planning, pay calculations, employment agreement reviews, and compliance audits, helping you navigate difficult decisions with clarity and confidence.
Contact us today to book a consultation or termination compliance review.