Small Business Term: What Is a Temporary Layoff?

By QuickBooks Canada Team

0 min read

When an employer halts or reduces an employee’s working hours without terminating his or her employment, the employee is considered to be on a temporary layoff. Just because an employer fails to specify a date of recall when laying off the employee does not necessarily indicate the employee has been terminated. It is important to review the employee’s contract to see if a temporary layoff is allowed. If not allowed under contract, then the layoff may lead to a constructive dismissal.

The Employment Standards Act defines a “week of layoff” as a week where the employee took home less than 50% of what he or she would normally average. Besides for a few special cases, a temporary layoff is not allowed to be more than 13 weeks within a period of 20 consecutive weeks. If the layoff is longer than this, the employee becomes entitled to termination pay.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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