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Do you know what termination values mean? If you don't, you're one step away from finding out! Keep reading!
When we are laid off from a job, doubts always arise about the amounts we are entitled to receive.
Therefore, in today's text you will discover what values mean for termination purposes and what the main ones are.
So be sure to check back to stay updated!
What does values mean for termination purposes?
When an employment contract comes to an end, whether by decision of the employer or the employee, it is necessary to calculate and establish the amounts to be paid as compensation for the rights acquired during the period of employment.
These values, known as “termination values”, encompass several aspects that need to be understood.
In the next topics, we will briefly explain the main elements that make up the termination values and understand their meanings.
1. Salary balance
The salary balance corresponds to the value proportional to the days worked in the month of termination.
It is calculated considering the employee's salary up to the last day actually worked.
For example, if a worker is fired in the middle of the month, he or she is entitled to receive payment proportional to the days worked up to the date of termination.
2. Proportional and accrued vacations
Proportional holidays are rights of workers who have not enjoyed the entire holiday period corresponding to their working time.
Unused vacations must be paid upon termination, as they entered into the values for termination purposes.
Furthermore, if the employee has overdue vacations, that is, accumulated from previous years, they must also be compensated at the time of termination.
3. Proportional 13th salary
The 13th salary is an annual bonus equivalent to an extra salary paid to the worker.
Upon termination, the 13th salary is calculated proportionally to the period worked in the current year.
For example, if a worker is dismissed in the middle of the year, he will be entitled to receive half of the value of the 13th salary corresponding to the period worked.
5. Prior notice
Notice period is a period in which one party, employer or employee, informs the other about the termination of the employment contract.
If the contract is terminated by the employer without just cause, it is necessary to pay the employee advance notice.
This payment can be made in two ways: compensated, where the amount is paid all at once, or fulfilled, that is, the worker continues working during the notice period, receiving payment normally.
6. What do values mean for termination purposes: FGTS fine
The Severance Pay Guarantee Fund (FGTS) is a mandatory benefit in Brazil.
In the case of unfair dismissal, the employer must pay a fine of 40% on the total amount deposited in the employee's account. FGTS of the worker.
This fine is an additional compensation intended to compensate the worker for the non-voluntary termination of the employment contract.
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7. Unemployment Insurance
Another benefit to be considered in the context of severance pay is unemployment insurance.
This benefit is financial support granted by the government to unemployed workers who meet certain requirements.
Unemployment insurance aims to provide temporary income to workers during the transition period between jobs.
However, it is worth noting that it is not a severance pay paid by the employer, but rather a government benefit.
In addition to the amounts mentioned above, there are other severance payments that may vary depending on current labor legislation.
These amounts may include, for example, payment of unpaid overtime, night shift pay, commissions, profit sharing and results (PLR) and compensation for moral or material damages.
It is essential that the worker seeks specialized guidance to ensure that all rights are being respected at the time of termination.
Other than that, it is essential that you know your rights and everything you should receive upon termination.
Now that you've discovered what does values mean for termination purposes, check out some important tips below to put into practice after receiving your termination.
What to do after receiving severance pay?
As we can see, many amounts are added to the severance pay, which allows the worker to be sent away with a good amount in hand.
In the midst of so many emotions about ending another cycle, and in the uncertainty of what the new one will be like, it is common to not know what to do with this money and how to use it in the best way.
In this case, it is essential that the worker adopts some financial measures to ensure the best use of resources and their financial security.
Below are some tips that can help you use your severance pay wisely.
✅Prioritize financial planning
The first step is to draw up a detailed financial plan.
Analyze your current situation, consider your monthly expenses, outstanding debts and financial goals.
Create a realistic budget to manage resources efficiently.
✅Create an emergency fund
One of the main recommendations is to allocate part of the severance pay to create an emergency reserve.
This reserve should be enough to cover three to six months of basic expenses, such as housing, food, health and transportation.
This measure is certainly a smart way to use money and will provide greater security in the event of unforeseen events, such as unemployment or unexpected expenses.
✅Pay off outstanding debts
If you have outstanding debts, prioritize paying them off. Start with debts with the highest interest rates, such as credit cards or loans.
Paying off debts will reduce financial pressure and prevent the accumulation of more burdens.
✅Invest smartly
If your finances are in order, consider investing a portion of your severance pay.
Consult an investment specialist to understand the options that best suit your profile and goals.
Investments such as fixed income, shares, real estate funds or even entrepreneurship can offer opportunities for long-term financial growth.
✅Update your knowledge and skills
Take advantage of the period after termination to invest in yourself.
Consider, for example, the possibility of taking courses, workshops or training that can improve your professional skills.
This will increase your chances of being re-employed in the job market and enhance your personal development.
✅Search for new professional opportunities
Don't waste time in starting the search for new professional opportunities.
Review and update your CV, keep an eye on available vacancies, both online and at employment agencies, and be prepared to participate in selection processes.
Additionally, a good tip is to use your network of contacts and social networks such as LinkedIn to publicize your availability and skills.
✅Preserve your mental health
Job loss and termination of employment can be stressful and emotionally challenging times.
Therefore, it is essential to take care of your mental health and well-being.
To do this, seek support from family, friends or qualified professionals, if necessary. Practice activities that promote relaxation, such as physical exercise, meditation or hobbies that bring you pleasure.
Conclusion
Today, you discovered what severance pay means, and you also found some important tips to put into practice when you are fired.
So, put each of them into practice and keep your financial life balanced even after losing your main source of income.
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