What Severance Pay Rules Must Employers Follow in Liberia?

Which Employees Qualify for Severance Pay?

• Employees engaged under a contract of service who have completed at least three months of continuous employment with your company.
• Workers whose employment is terminated by the employer for reasons other than serious misconduct, such as redundancy or operational restructuring.
• Employees dismissed for reasons found to be unfair or unjustified under the Decent Work Act 2015 after due process or dispute resolution.
• Fixed-term employees whose contracts are ended early by the employer without a valid lawful reason or agreed early-termination terms.
• Employees affected by collective redundancies or business closures where positions are permanently eliminated.
• Employees who have not already received a contractual or ex gratia payment that clearly and lawfully substitutes for statutory severance entitlements.

What Are the Legal Timelines for Paying Severance?

Liberian law expects severance and other terminal benefits to be paid without undue delay once employment ends, typically at the same time as the final paycheck. In practice, many employers target payment on or before the employee’s last working day or within a short administrative window. To stay safe, your company should aim to complete all calculations and approvals before issuing the termination letter. Document the payment date in the termination notice and obtain written acknowledgment from the employee. Where a dispute arises, be prepared to show that you acted promptly and in good faith in line with the Decent Work Act 2015.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Liberia, you risk statutory penalties, orders from the Ministry of Labour, and potential court awards. Non-compliance can also trigger back payments, interest, and reputational damage with regulators and employees.

• The Ministry of Labour may order you to pay outstanding severance and other terminal benefits in full.
• Labour inspectors can recommend administrative fines and corrective measures for breaches of the Decent Work Act 2015.
• Courts or labour tribunals may award additional compensation, interest, and costs where employees successfully challenge terminations.
• Persistent or willful non-compliance can escalate to criminal liability for responsible officers under certain circumstances.
• Disputes over unpaid severance can lead to strikes, collective grievances, and damage to your employer brand in the local market.

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 Liberia’s Decent Work Act 2015, but it can shift day-to-day compliance tasks. In a typical EOR model, the EOR is the legal employer in Liberia and is responsible for calculating and paying severance according to local law. However, your company usually bears the commercial and contractual cost of those payments under your service agreement. If you direct an unlawful termination or ignore EOR guidance, you may still face indirect liability, disputes, or indemnity claims. Clear contracts and close coordination with the EOR are essential to ensure severance decisions are lawful and properly documented.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your company navigate Liberia’s severance rules by embedding the Decent Work Act 2015 into every employment setup. Our team tracks statutory notice, redundancy, and unfair dismissal standards so your managers understand the cost and risk of each termination scenario before acting. We standardize contracts, policies, and workflows so that severance calculations are consistent, documented, and easy to audit.

When you hire through Playroll’s global platform or EOR service, we handle local payroll, statutory benefits, and end-of-service payments on your behalf. Your team gets clear cost estimates, compliant termination checklists, and support in handling negotiations or settlements. That means fewer surprises, faster resolutions, and a much lower risk of penalties or disputes with Liberian authorities and employees.