Notice Pay #
What is Notice Pay? #
Notice Pay refers to the amount that an employee is eligible and may receive in lieu of providing services during a “Notice Period,” which will be as per the offer letter agreement between both the employer and the employee to serve the employee’s separation from service date. When an employee gets terminated, he/she is compensated by the employer either by a serving notice period or payment instead of notice.
If the employer decides that the employee’s last working day shall be prior to the end of his or her notice period, in such case the employee is eligible to receive in lieu of the notice for the difference between the notice period to his or her last working day. Notice Pay paid to an employee shall be in addition to, and shall not be offset against, any other termination benefits like the gratuity, leave salary, etc.,
When an employee is ineligible for notice pay? #
Employees who resign voluntarily or who have not completed at least three months of service are not eligible for termination pay or notice period. Also, the employee is not eligible for a notice period or pay in lieu when terminated for “just cause.” The burden of proving just cause rests with the employer. Just cause state is applied when there the employees breach the employment contract and are found guilty of a criminal act, unethical practices, incompetence, willful misconduct, or a significant breach of a workplace policy.