What Severance Pay Rules Must Employers Follow in Bonaire?

Which Employees Qualify for Severance Pay?

• Employees dismissed without urgent cause and with the required dismissal permit or court approval generally qualify for severance.
• Employees with an open-ended (indefinite) contract usually have stronger claims to severance than those on very short fixed-term contracts.
• Long-serving employees and older workers are more likely to receive higher severance amounts under court-applied formulas.
• Employees who are terminated for business-economic reasons, reorganization, or redundancy commonly qualify for severance.
• Employees who are not at serious fault in the termination, such as misconduct or gross negligence, are more likely to be awarded severance.
• Employees whose contracts end by mutual agreement may receive a negotiated severance if you document it in a settlement agreement.

What Are the Legal Timelines for Paying Severance?

In Bonaire, severance is usually due when the employment relationship legally ends, either on the termination date set by the court or the agreed end date in a settlement. Courts or authorities may specify a payment deadline, and you should treat that as a hard cutoff. In practice, your company should aim to pay severance together with the final paycheck or within a few days of the last working day. This helps demonstrate good faith and reduces the risk of disputes or penalty interest. If payment is ordered by a court, late payment can trigger statutory interest and enforcement measures, so build internal processes to pay immediately once the decision is final.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Bonaire, you risk financial, legal, and reputational consequences. Employees can challenge the termination, claim additional compensation, and seek enforcement through the courts, which may add costs and interest. Non-compliance can also damage your standing with local authorities and make future workforce changes more difficult to manage.

• Courts can order you to pay the outstanding severance plus statutory interest.
• You may face additional compensation or damages if the dismissal is found to be manifestly unreasonable.
• Legal fees and court costs can increase the overall cost of a disputed termination.
• Enforcement actions, such as seizure of assets, may follow persistent non-payment.
• Reputational harm can impact hiring and relations with regulators and social partners.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (EOR) such as the service described at https://www.playroll.com/employer-of-record does not remove the need to follow Bonaire’s severance rules. In most EOR structures, the EOR is the legal employer on paper, but your company directs the work and drives termination decisions. Local law and the EOR contract will determine who pays severance, yet authorities will expect that the employee is not disadvantaged by the arrangement. You should assume that severance must be budgeted and funded by your company, even if the EOR administers the calculation and payment. Clear agreements with the EOR about cost allocation, documentation, and timelines are essential to avoid disputes and unexpected liabilities.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your company navigate Bonaire’s severance landscape by combining local legal insight with practical payroll execution. Your team gets structured guidance on when severance is likely owed, what formulas or benchmarks are typically used, and how to document the business reasons for termination. That means fewer surprises when you restructure, close roles, or end underperforming employment relationships.

Beyond advice, Playroll can operationalize compliant severance payments, from calculating amounts to coordinating final pay and statutory deductions. With centralized records and standardized workflows, you reduce the risk of missed deadlines, miscalculations, or inconsistent treatment across employees. This lets your HR and finance teams focus on strategy while knowing that severance compliance in Bonaire is handled with precision.