To determine how much vacation pay and Lieu of Notice pay an employee in Ontario is owed after employment termination, we need to follow a step-by-step approach. Let's break down the problem and compute the required values.
### 1. Establishing the Payment History
Last Year:
- Semi-monthly payment: \[tex]$2,500
- Number of semi-monthly periods per year: 24
- Annual pay: \(\$[/tex]2,500 \times 24 = \[tex]$60,000\)
This Year:
- Semi-monthly payment: \$[/tex]2,750
- Employee worked for half of this year (roughly 12 semi-monthly periods): [tex]\(\$2,750 \times 12 = \$33,000\)[/tex]
### 2. Total Earnings Over the Last 52 Weeks
Since the employee is being terminated mid-year (July 15), we approximate the total earnings for the last 52 weeks (1 year) as:
- Total pay over the last half-year of last year: [tex]\(\frac{\$60,000}{12} \times 6 = \$30,000\)[/tex]
- Plus pay for this half-year: \[tex]$33,000
Total pay over the last 52 weeks: \(\$[/tex]30,000 + \[tex]$33,000 = \$[/tex]63,000\)
### 3. Calculating Vacation Pay
Vacation pay is calculated as a percentage of total earnings over the past year. In Ontario, the standard percentage is 4%.
[tex]\[ \text{Vacation Pay} = 0.04 \times \$63,000 = \$2,520 \][/tex]
### 4. Calculating Lieu of Notice Pay
In Ontario, the standard Lieu of Notice pay (termination pay in lieu of notice) is calculated as 1 week of pay per year of service. Thus, we need the weekly pay and then multiply that by the number of years of service.
[tex]\[ \text{Weekly pay} = \frac{\$63,000}{52} = \$1,211.54 \][/tex]
Since the employee has 4 years of service:
[tex]\[ \text{Lieu of Notice Pay} = 4 \times \$1,211.54 = \$4,846.15 \][/tex]
### Summary
- Vacation Pay Owed: \[tex]$2,520.00
- Lieu of Notice Pay Owed: \$[/tex]4,846.15
So, when considering the termination of a 4-year employee as per the given scenario, they are entitled to \[tex]$2,520.00 in vacation pay and \$[/tex]4,846.15 in Lieu of Notice pay.
