What Severance Pay Rules Must Employers Follow in Guadeloupe?

Which Employees Qualify for Severance Pay?

• Employees on open-ended (CDI) contracts dismissed for reasons other than serious or gross misconduct generally qualify for statutory severance.
• Employees must usually have at least 8 months of continuous service with your company to claim the legal dismissal indemnity.
• Part-time employees and employees on reduced working hours can qualify, with severance calculated pro rata to their contractual hours.
• Employees covered by a collective bargaining agreement may qualify for higher or earlier severance than the Labour Code minimums.
• Fixed-term (CDD) employees do not receive dismissal severance but may be entitled to an end-of-contract indemnity, unless an exception applies.
• Employees who resign, retire voluntarily, or are dismissed for gross misconduct typically do not qualify for statutory severance pay.

What Are the Legal Timelines for Paying Severance?

In Guadeloupe, you follow French rules, so severance is normally due at the end of the employment relationship, together with the final paycheck. In practice, you pay the dismissal indemnity on or before the employee’s last working day or the end of the notice period, even if it is worked or paid in lieu. The severance amount and all final sums must be clearly itemized on the final payslip and in the settlement documents. Any delay can be treated as late payment of wages, exposing your company to interest, penalties, and potential claims before the labour court. If there is a dispute about the amount, you should still pay the undisputed portion on time while you resolve the balance.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Guadeloupe, local courts apply French Labour Code sanctions, which can be costly. Employees can challenge the termination, claim unpaid severance, and seek additional damages, especially if the dismissal procedure was flawed. Labour inspectors and courts will look at whether you respected both the calculation rules and the payment deadlines, as well as any applicable collective agreement.

• Employees can claim back pay for any unpaid severance plus legal interest on late amounts.
• The labour court (prud’hommes) can award damages for unfair or irregular dismissal in addition to severance.
• Failure to provide accurate final documents can trigger fines and administrative penalties.
• Systematic non-compliance can increase the risk of audits and reputational damage for your company.
• Collective disputes or union actions may arise if severance rules in a workplace are repeatedly ignored.

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 French Labour Code rules in Guadeloupe, but it can shift who is the legal employer on paper. In an EOR model, the EOR is usually responsible for calculating and paying statutory severance, notice, and final pay in line with local law and any collective agreements. However, your company still drives business decisions, including whether to terminate and on what grounds, so you can be drawn into disputes if the dismissal is challenged. A well-structured EOR contract should clearly allocate responsibilities for severance funding, documentation, and handling of any claims. You should always review the EOR’s processes to ensure they match your risk appetite and internal policies.

Be 100 Percent Compliant in Offering Severance with Playroll

Working with Playroll helps your team navigate the French employment framework that applies in Guadeloupe without needing in-house legal specialists. We track statutory dismissal indemnity rules, collective bargaining agreements, and evolving case law so your severance calculations stay accurate. Our workflows standardize notice letters, final payslips, and payment timing, reducing the risk of technical errors that often lead to disputes. You stay focused on business decisions while we handle the operational compliance details.

Playroll also supports you in planning workforce changes well before terminations happen. We can model estimated severance costs, flag higher-risk scenarios, and coordinate with local counsel where needed. If you use our Employer of Record service, we take on the day-to-day employer obligations, including correct severance payments, documentation, and record-keeping. That way, your company can scale in Guadeloupe with confidence that offboarding is handled in a compliant and predictable way.