What Severance Pay Rules Must Employers Follow in Lebanon?

Which Employees Qualify for Severance Pay?

• Employees working under an indefinite-term employment contract who are dismissed by the employer without a valid serious cause generally qualify for severance.
• Employees terminated for economic or technical reasons, or as part of a restructuring, may qualify for enhanced indemnities set by the Labor Arbitration Council.
• Employees with at least three months of continuous service typically qualify for notice and related indemnities if dismissed without serious fault.
• Employees on fixed-term contracts may qualify for compensation if the employer ends the contract early without lawful justification.
• Employees forced to resign due to the employer’s serious breach of contract can be treated as unfairly dismissed and may qualify for indemnity.
• Domestic workers and certain categories excluded from the Labor Law may not qualify under statutory severance rules and instead rely on contract terms.

What Are the Legal Timelines for Paying Severance?

In practice, your company should pay severance and all end-of-service entitlements as soon as employment ends, ideally on or before the employee’s final working day. Lebanese Labor Law does not set a very detailed day-by-day schedule, but delays can be treated as non-payment of wages or breach of termination obligations. Courts expect employers to settle dues without unjustified delay, especially where termination is unilateral. To reduce disputes, document the calculation, obtain a signed receipt, and transfer funds promptly via traceable methods. For complex economic dismissals, align payment timing with any Labor Arbitration Council decisions or approved settlement agreements.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Lebanon, you risk financial, administrative, and reputational consequences. Labor inspectors and courts can intervene, and employees can bring claims for unpaid indemnities, notice, and damages. Non-compliance can also complicate future collective redundancies and expose your company to interest on late payments and legal costs.

• Courts can order payment of outstanding severance, notice, and other dues with legal interest.
• You may be liable for additional damages if the dismissal is found abusive or arbitrary.
• Labor authorities can impose fines for breaches of Labor Law obligations.
• Disputes can lead to legal fees, management time, and potential negative publicity.
• Repeated non-compliance can damage your standing with regulators and employees.

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 Lebanese severance rules. In Lebanon, the entity considered the legal employer on paper is generally responsible for complying with Labor Law, including end-of-service indemnities. However, your company may still bear contractual or commercial liability under your EOR agreement if severance is miscalculated or unpaid. You should clearly allocate responsibility for termination decisions, calculations, and funding in the EOR contract. Always ensure the EOR’s local practices match Lebanese legal requirements and market expectations.

Be 100 Percent Compliant in Offering Severance with Playroll

Lebanese severance rules can feel complex, especially when you are dealing with economic dismissals, performance terminations, or mixed workforces. Playroll helps your team translate the Lebanese Labor Law into clear, practical steps, from checking who qualifies to applying the right formula and documenting the decision. You stay in control of business strategy while Playroll focuses on the compliance details that keep you out of court.

With Playroll, your company can standardize severance workflows across countries while still respecting Lebanon’s specific rules and customs. Our Employer of Record and global payroll tools help you track tenure, notice, and indemnity amounts, and ensure payments are made on time and in the correct currency. That means fewer disputes with departing employees and a cleaner risk profile for your leadership and investors.