What Severance Pay Rules Must Employers Follow in Antigua and Barbuda?

Which Employees Qualify for Severance Pay?

• Employees with at least one year of continuous service who are dismissed because their role is redundant.
• Employees whose employment ends due to the employer’s business closure or downsizing not related to misconduct.
• Employees who are laid off or kept on short-time for the statutory period and then treated as redundant under the Employment Act.
• Employees who are not dismissed for misconduct, poor performance, or other fair reasons that do not trigger redundancy severance.
• Fixed-term employees whose contracts are ended early for redundancy reasons before the agreed expiry date.
• Employees who have not signed a valid settlement agreement that clearly provides for alternative termination benefits in place of statutory severance.

What Are the Legal Timelines for Paying Severance?

You should aim to pay severance in Antigua and Barbuda on the employee’s final working day or as soon as reasonably practicable after the termination date. While the Employment Act 2006 focuses more on entitlement and calculation than on an exact payment deadline, late payment can be treated as an unlawful deduction of wages. In practice, many employers align severance payment with the final payroll cycle following termination. To stay safe, document the payment date in the termination letter and obtain written acknowledgment when the employee receives the funds. If there is any dispute about the amount, pay the undisputed portion promptly while you resolve the balance.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Antigua and Barbuda, you risk statutory claims, financial awards, and reputational damage. The Labour Commissioner and the Industrial Court can order you to pay outstanding severance, plus other sums, and non-compliance can escalate costs quickly.

• Employees can bring claims for unpaid severance and wrongful dismissal before the competent authorities.
• You may be ordered to pay the full severance owed, plus interest or additional compensation.
• Non-compliance can lead to enforcement action and legal costs that quickly exceed the original liability.
• Disputes over severance can trigger broader audits of your employment practices and records.
• Repeated breaches can damage your standing with regulators, unions, and current staff.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (EOR) such as https://www.playroll.com/employer-of-record does not remove the need to follow Antigua and Barbuda’s severance rules. In most EOR models, the EOR is the legal employer on paper and is responsible for calculating and paying statutory severance. However, your company usually bears the economic cost under the service agreement and may be contractually liable to reimburse any severance, penalties, or legal fees. If the EOR mishandles a termination, your company can still face brand, relationship, and potential joint-liability risks. You should therefore review the EOR contract carefully and ensure their policies mirror local law and your internal standards.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your company navigate Antigua and Barbuda’s severance rules by standardizing how you collect data on service, salary, and termination reasons. Our workflows guide your team through whether a dismissal is truly a redundancy, what notice and consultation steps are expected, and how to document the decision so it stands up to scrutiny. You stay in control of business decisions while we help translate them into compliant local actions.

When you use Playroll as your global employment infrastructure, we coordinate with local experts and, where relevant, Employer of Record partners to ensure severance is calculated and paid on time. Your finance and HR teams get clear cost breakdowns before you confirm a termination, reducing surprise liabilities. That way, you can restructure or close roles in Antigua and Barbuda with confidence that severance, documentation, and timelines are handled correctly.