According to the Labor Law of the People's Republic of China, when an employee terminates a labor contract with an employer, the employer shall pay severance to the employee in accordance with the law. The standard of severance shall be calculated according to the employee's years of service with the employer, the level of wages, the reason for terminating the labor contract, and other factors.
First of all, the standard of severance should be based on the wages agreed in the employment contract, not on the basis of the actual wages paid. If there is no agreed wage in the employment contract or the agreed wage is lower than the local minimum wage standard, the severance shall be calculated on the basis of the local minimum wage standard.
Secondly, the calculation period of severance shall be determined according to the employee's years of service with the employer. The length of service refers to the time from the employee's employment to the termination of the labor contract, excluding the probationary period. The employer shall pay the employee one month's salary as severance for each full yearif it is less than one year, it shall be counted as one year. If the employee has worked with the employer for more than 10 years, the employer shall pay the employee severance payment of 10 months' wages.
Third, the calculation method of severance shall be carried out in accordance with the following steps:
1.Calculate the average monthly wage of an employee: The average monthly wage refers to the average monthly wage of an employee in the 12 months prior to the termination of the labor contract, excluding overtime wages and benefits.
2.Determination of working years: It is determined according to the number of years of service of the employee in the employer.
3.Calculation of severance payment: The total amount of severance payment is obtained by multiplying the average monthly wage of the worker by the number of years of service.
Finally, if the employee discovers that the employer has committed illegal acts or breaches of contract after terminating the employment contract, he or she may recover economic compensation or compensation from the employer through labor dispute arbitration or litigation. At the same time, if the employer commits an illegal act or breach of contract, resulting in the termination of the labor contract, the employer shall also pay the employee severance or compensation in accordance with the law.