Termination Pay in BC (2026): Compensation for Length of Service, Group Notice and Worked Examples

When a British Columbia employer lets someone go without just cause, the Employment Standards Act requires either written notice or a payment the Act calls compensation for length of service — what most people call termination pay or severance in B.C. The maximum is eight weeks for an individual, but the details decide whether an employer gets it right: how the 8-week average works, when notice doesn't count, which jobs are exempt, how long a layoff can last, and what happens when 50 or more people go at once. This guide is for B.C. employers, payroll and HR staff, and employees checking their entitlement in 2026, with worked examples in Canadian dollars.

Quick answer

Under section 63 of B.C.'s Employment Standards Act, an employee owed compensation for length of service gets 1 week's wages after 3 consecutive months, 2 weeks after 12 months, and 3 weeks after 3 years plus 1 week per extra year, up to 8 weeks' wages. A week's wages is the average of the last 8 normal weeks at the regular wage. The employer can give the same length of written notice, pay, or a mix — and must pay within 48 hours.

• No entitlement if the employee quits, retires or is dismissed for just cause

• Group terminations (50 or more employees at a single location within any 2-month period) add 8 weeks to 16 weeks of notice on top

• A layoff longer than 13 weeks in any 20 consecutive weeks becomes a termination from day one

• Vacation pay of 4% or 6% is owed on the payment

• Common-law reasonable notice can be far higher unless a valid contract clause limits it

The section 63 scale

The amount depends on the employee's consecutive length of employment. A break in employment can reset the count, while a fixed-term contract that keeps getting renewed usually doesn't.

The Act describes the payment as a liability that builds up as service grows. The employer discharges it in one of three ways: by giving written notice of the matching length, by paying the money equivalent, or by combining the two. For an employee owed six weeks, three weeks' working notice plus three weeks' pay satisfies the Act.

The liability also disappears if the employee quits, retires or is dismissed for just cause. "Just cause" is a high bar. It generally means serious misconduct, or a pattern of poor performance or misconduct that the employer has clearly warned about and given a real chance to correct. Employers who call a dismissal "for cause" to avoid paying, and then can't prove it, end up owing the compensation anyway — plus possibly a penalty after a Branch determination.

B.C. has no separate statutory severance

Unlike Ontario, B.C.'s Act doesn't have a second, long-service severance payment. Compensation for length of service is the only individual statutory amount. That's why the term "severance pay" in B.C. is usually used loosely to mean either this statutory payment or the much larger common-law amount discussed later. Compare our guide to termination pay in Ontario, where termination pay and severance pay are separate entitlements.

How to calculate compensation for length of service

Section 63(4) sets out the method. It is more specific than many online guides suggest, and getting it wrong is the most common reason the Employment Standards Branch orders a top-up.

Calculating B.C. termination pay

1. 1

   Count consecutive service

   Find the employee's start date and the termination date. If the employee was on a layoff longer than a temporary layoff, the termination date is the first day of the layoff.

2. 2

   Pick the last 8 normal weeks

   Take the last 8 weeks in which the employee worked their normal or average hours. Skip weeks of sick leave, unpaid leave or layoff.

3. 3

   Total the regular wages and divide by 8

   Add the weekly wages at the regular wage for those 8 weeks and divide by 8. That's one week's wages. Overtime premiums aren't part of the regular wage.

4. 4

   Multiply by the weeks owed

   Use the s.63 scale, then subtract any weeks of valid written notice already given.

5. 5

   Add vacation pay and pay on time

   Add 4% (or 6% after 5 consecutive years) and pay everything within 48 hours of termination.

The 8-week averaging rule matters most for employees whose hours vary. If someone's hours dropped sharply in the final month because business was slow, the employer can't simply use that last low week. It must reach back to the last eight weeks of normal or average hours.

Vacation pay is owed on top. The Act's definition of "wages" expressly includes the amount of any liability under section 63. Since vacation pay is a percentage of total wages, the compensation itself attracts vacation pay: 4% of it for most employees, or 6% once the employee has five consecutive years. Any unpaid vacation pay already earned also has to be paid out with the final wages.

Worked examples in C$

Fixed hours. Jordan works 37.5 hours a week at C$24 an hour at a Burnaby distributor and has 4 years and 3 months of service. One week's wages is C$900. He's owed 4 weeks: 4 × C$900 = C$3,600. Vacation pay at 4% adds C$144, for C$3,744, due within 48 hours.

Variable hours. Aisha works irregular shifts at a Kelowna café and has 2 years' service. In her last 8 weeks of normal hours she earned C$6,240 at the regular wage, so one week's wages is C$780. She's owed 2 weeks: C$1,560, plus 4% vacation pay of C$62.40 — C$1,622.40. Her two final weeks, when she was only given one shift each, are left out of the average.

Minimum-wage part-timer. Sam works 20 hours a week at the B.C. minimum wage of C$18.25 an hour and has 9 months' service. One week's wages is C$365. He's owed 1 week: C$365 plus 4% vacation pay, C$379.60.

Long-service salaried employee. Priya, an office manager in Vancouver, earns C$78,000 a year (C$1,500 a week) and has 12 years' service. She's owed the maximum 8 weeks: C$12,000, plus 6% vacation pay of C$720, for C$12,720. That is the statutory floor; her common-law entitlement could be many months.

Partial notice. A warehouse lead with 6 years' service is owed 6 weeks. The employer gives 4 weeks' written working notice, then decides to end the job right away. It owes 2 weeks' compensation for the shortfall, plus vacation pay on it.

Rules about written notice

Working notice is cheaper for an employer than pay in lieu, but section 67 sets limits that catch many businesses out.

Notice during time off doesn't count. Written notice has no effect if the notice period coincides with the employee's annual vacation, a leave, a temporary layoff, a strike or lockout, or a period when the employee can't work for medical reasons. An employer can't give someone four weeks' notice that runs through their three-week holiday.

Notice expires if employment continues. If the employee keeps working after the notice period ends, the notice is void. The employer would have to give fresh notice to rely on it.

No changes during notice. Once notice is given, the employer can't change the wage rate or any other condition of employment without the employee's written consent (or the union's). Cutting hours or removing a commission plan during notice undermines it.

Substantial changes can be a termination. Under section 66, if a condition of employment is substantially altered — a big pay cut, a major change in duties or location — the Director of Employment Standards may decide that the employment has been terminated. That triggers compensation for length of service even though the employer never said "you're fired".

When the employee resigns first. If an employee with at least three months' service gives notice of resignation and the employer ends the job during that notice period, the employer owes the lesser of the wages for the rest of the notice period or the compensation for length of service. An employee who gives two weeks' notice and is walked out the same day is usually owed two weeks' pay, if that is less than their s.63 entitlement.

B.C. termination rules at a glance (2026)

8 weeks' wages

Maximum individual compensation

8-week average

How a week's wages is set

Last 8 normal weeks ÷ 8

48 hours

Deadline to pay when employer terminates

13 weeks in any 20 consecutive weeks

Temporary layoff limit

Who isn't entitled

Sections 63 and 64 don't apply to employees who are:

• employed on an on-call arrangement where the employer may ask them to come in for temporary periods and the employee can accept or reject each one
• employed for a definite term, or for specific work to be completed within up to 12 months — unless they keep working at least 3 months past the end, in which case the employment is treated as ongoing from the start
• under a contract that became impossible to perform because of an unforeseeable event (receivership and insolvency proceedings don't count)
• employed at construction sites by an employer whose principal business is construction
• offered reasonable alternative employment by the employer and who refused it

Section 63 also doesn't apply to teachers employed by school boards or the francophone education authority, or to unionized seasonal employees who were told when hired that they might be laid off and recalled, when the layoff is part of a normal seasonal reduction.

Remember that quitting, retiring and just cause all discharge the liability too. An employee who resigns isn't owed compensation — unless the "resignation" was really a constructive dismissal, which is where section 66 and the common law come in.

Temporary layoffs

A layoff isn't a termination as long as it stays a temporary layoff. For employees without a recall right under a collective agreement, that means up to 13 weeks in any 20 consecutive weeks. A "week of layoff" is any week in which the employee earns less than 50% of their weekly wages at the regular wage, averaged over the previous 8 weeks — so cutting someone to a few hours a week counts.

When the layoff exceeds that limit, the Act treats the employment as terminated at the beginning of the layoff. Compensation for length of service then becomes payable, calculated as at that start date. For unionized employees, a layoff becomes a termination when it exceeds the recall period in the collective agreement.

Two practical cautions. First, the ESA doesn't itself give an employer the right to lay someone off; in a non-union workplace, a layoff without a contract term allowing it can be treated by the courts as a constructive dismissal, regardless of the ESA's 13-week rule. Second, employers and employees can jointly apply to the Director for a variance extending the temporary layoff period, but it must be approved — not just agreed between the parties.

Group terminations

When 50 or more employees at a single location within any 2-month period will be terminated, section 64 adds a separate notice requirement. The employer must give written notice of group termination to each affected employee, to any union representing them, and to the Minister of Labour. The notice must state the number of employees affected, the effective date or dates, and the reasons.

B.C. group termination notice

Employees affected	Notice before the first termination
50 to 100	8 weeks
101 to 300	12 weeks
301 or more	16 weeks

50 to 100

Notice before the first termination

8 weeks

101 to 300

Notice before the first termination

12 weeks

301 or more

Notice before the first termination

16 weeks

If an employee doesn't get the required group notice, the employer must give termination pay instead, or a mix of notice and pay. Crucially, the group requirement is in addition to each employee's individual entitlement under section 63 or their collective agreement. A 10-year employee in a 120-person closure could be owed 12 weeks of group notice or pay plus 8 weeks' compensation for length of service. Group termination pay is owed even if the employee finds another job during the notice period.

Two more points. The Minister can require the employer to set up an adjustment committee — equal employer and employee representatives — to look for ways to avoid the terminations or reduce their impact and help people find work. And the group rules don't apply to employees who refuse alternative work available through a seniority system, are laid off as part of a normal seasonal reduction, or don't return within a reasonable time after recall.

Worked example. A Surrey manufacturer closes a line and terminates 120 employees with immediate effect, giving no notice. Mei, a machinist with 5 years' service earning C$1,200 a week, is owed 12 weeks of group termination pay (C$14,400) plus her individual compensation for length of service of 5 weeks (C$6,000) — C$20,400 before vacation pay. Had the employer given 12 weeks' written notice, the group requirement would have been met with working time instead of cash.

ESA minimums vs common-law notice

The ESA amount is a floor. A non-union B.C. employee dismissed without cause is also entitled to reasonable notice at common law unless a valid written termination clause limits them to the Act. Courts decide reasonable notice using the Bardal factors — the character of the job, length of service, age, and the availability of similar work. In Okano v. Cathay Pacific Airways (2022 BCSC 881), the B.C. Supreme Court treated 24 months as the normal upper limit, absent exceptional circumstances. Common-law notice is damages, so an employee must try to find new work and earnings from a new job generally reduce it; the ESA amount isn't reduced that way.

B.C. courts have generally taken a more provision-by-provision view of termination clauses than Ontario's courts. In Forbes v. Glenmore Printing (2023 BCSC 25), a clause that gave notice based on section 63 was upheld even though it didn't mention the group termination rules. In Egan v. Harbour Air Seaplanes (2024 BCCA 222), the Court of Appeal upheld a short clause referring to federal minimums for a federally regulated employer, and the Supreme Court of Canada refused leave to appeal in March 2025. Because Egan involved the Canada Labour Code, lawyers caution against treating it as settled law for provincial ESA clauses. The practical message is the same everywhere: a clear clause that never promises less than the ESA is what makes the statutory minimum the ceiling.

An employee can file a complaint with the Employment Standards Branch within 6 months after the last day of employment, or sue for wrongful dismissal in court, but the two routes interact, and a Branch determination can affect a later claim. Legal advice is worth getting before choosing.

Final pay, tax and the ROE

When the employer ends the employment, all wages owing — final wages, overtime, statutory holiday pay, vacation pay and compensation for length of service — must be paid within 48 hours. If the employee quits, the deadline is 6 days. If a statutory holiday falls in the last weeks, check eligibility under our B.C. statutory holidays guide.

For tax, the Canada Revenue Agency treats wages in lieu of termination notice as employment income, so CPP, EI and income tax are deducted as for regular pay — see our payroll deductions guide. Damages for wrongful dismissal paid under a settlement are generally a retiring allowance, with income tax withheld but no CPP or EI. Because classification depends on what a payment compensates, describe each component clearly in any settlement. Then issue the Record of Employment on time, since amounts paid on separation affect when EI benefits start.

Federally regulated employers in B.C. — banks, airlines, interprovincial transport, telecoms — follow the Canada Labour Code instead: at least 2 weeks' notice, rising to 1 week per completed year up to 8 weeks, a separate severance payment for employees with 12 months' service, and 16 weeks' notice for group terminations of 50 or more.

Ending employment in B.C. — employer checklist

0/9

• Confirm consecutive service and any s.65 exception that genuinely applies
• Check whether 50+ terminations at one location in 2 months trigger group notice
• Calculate a week's wages from the last 8 normal weeks, not the final week
• Make sure written notice doesn't overlap vacation, leave, layoff or medical absence
• Keep wages and conditions unchanged during notice
• Add vacation pay on the compensation
• Pay everything within 48 hours of termination
• Issue the Record of Employment
• Have termination clauses reviewed before relying on them

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Common mistakes

Using the final week's pay. The Act averages the last 8 normal weeks. If hours were cut before the termination, using the last pay stub underpays.

Forgetting vacation pay on the compensation. It's wages under the Act, so 4% or 6% is added.

Giving notice that runs through a vacation. Section 67 makes it ineffective. Reschedule the vacation or pay in lieu.

Treating a long layoff as free. After 13 weeks in 20, the employee is terminated as of the first day of the layoff, and the compensation is overdue.

Counting group notice as the whole entitlement. Group notice is in addition to individual compensation for length of service.

Labelling performance problems as just cause. Without clear warnings and a chance to improve, just cause usually fails.

Official links

• B.C. Employment Standards Act (BC Laws)Sections 18, 58, 62–68 and 74
• B.C. — quitting, getting fired or laid offEmployment Standards Branch guidance
• CRA — retiring allowancesTax treatment of termination payments
• Federal — termination of employmentCanada Labour Code employers

What to do next

Before you terminate, pull the employee's last 8 normal weeks of payroll, confirm consecutive service, and check whether the termination is part of a larger reduction that could reach the group threshold. Then compare with Alberta's termination pay rules if you employ staff in both provinces, prepare the Record of Employment, and use our salary slip generator to show compensation for length of service, vacation pay and final wages as separate lines.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How much termination pay is required in BC?

Under section 63 of B.C.'s Employment Standards Act, an employer owes compensation for length of service of 1 week's wages after 3 consecutive months of employment, 2 weeks after 12 consecutive months, and 3 weeks after 3 consecutive years plus 1 week for each additional year, to a maximum of 8 weeks' wages. Written notice of the same length, or a mix of notice and pay, can replace it.

How is termination pay calculated in BC?

Add up the employee's weekly wages at the regular wage during the last 8 weeks in which they worked normal or average hours, divide by 8 to get a week's wages, then multiply by the number of weeks owed. Overtime pay isn't part of the regular wage. Vacation pay is then owed on the amount, because the Act treats compensation for length of service as wages.

Is there severance pay in BC?

B.C.'s Employment Standards Act has no separate severance payment like Ontario's. Its compensation for length of service is the only individual statutory payment, plus extra notice or termination pay in a group termination. Employees without a valid contract clause limiting them to the Act can also claim common-law reasonable notice, which courts often set far higher.

When does a temporary layoff become a termination in BC?

For employees without a right of recall under a collective agreement, a temporary layoff can last up to 13 weeks in any 20 consecutive weeks. A week of layoff is one in which the employee earns less than half their usual weekly wages. Once the layoff goes past that limit, employment is treated as terminated from the start of the layoff, and compensation for length of service is owed.

What is a group termination in BC?

It's the termination of 50 or more employees at a single location within any 2-month period. The employer must give written notice to each affected employee, any union and the Minister: 8 weeks for 50 to 100 employees, 12 weeks for 101 to 300, and 16 weeks for 301 or more. This is on top of each employee's individual entitlement under section 63.

When must final pay be paid in BC?

When the employer ends the employment, all wages owing — including compensation for length of service and vacation pay — must be paid within 48 hours. When the employee quits, the deadline is 6 days. A complaint to the Employment Standards Branch must be made within 6 months after the last day of employment.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 13 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Employment Standards Act, RSBC 1996, c. 113 (sections 1, 18, 58, 62–68, 74) — King's Printer for British Columbia · accessed 13 October 2026
2. 2.Retiring allowances — Canada Revenue Agency · accessed 13 October 2026
3. 3.Termination of employment (federally regulated employers) — Employment and Social Development Canada · accessed 13 October 2026
4. 4.British Columbia court finds termination clause enforceable because it complied with the ESA — Littler · accessed 13 October 2026
5. 5.Pay in lieu of notice in BC explained — Achkar Law · accessed 13 October 2026
6. 6.Termination pay in BC: a complete guide for employers — Employment Hero · accessed 13 October 2026