Can You Get Severance If You Find a New Job?

Yes. You can still receive severance pay even if you’ve already found a new job. Starting another position doesn’t automatically cancel your severance rights or mean your former employer owes you nothing.

However, your new income can affect how much additional compensation you receive. The outcome depends on your employment contract, whether you’ve accepted a severance package and how that package is being paid.

Samfiru Tumarkin LLP helps non-unionized employees in Ontario, Alberta and British Columbia understand their severance rights after losing a job, including situations where they’ve already found new employment.

On This Page:

• 1. Working While Receiving Severance
• 2. Does Severance Stop?
• 3. A Lower-Paying New Job
• 4. Lump-Sum Severance
• 5. Salary Continuance
• 6. Looking for Another Job
• 7. Telling Your Former Employer
• 8. Negotiating Severance
• 9. Common Questions

Can You Collect Severance and Work at the Same Time?

Yes. You can receive severance pay from a former employer while earning income at a new job.

Whether your new earnings affect your severance depends on the type of compensation involved:

• Minimum employment standards entitlements: Starting a new job doesn’t reduce minimum termination pay or statutory severance pay already owed under applicable employment standards legislation.
• Common-law severance: Income from a new job can reduce the additional compensation you recover from your former employer.
• Lump-sum severance: If you’ve accepted a final settlement, finding another job doesn’t ordinarily require you to return the money.
• Salary continuance: If your former employer continues paying you over time, those payments could be reduced or stopped when you start a new job, depending on your agreement.

Does Severance Pay Stop When You Get a New Job?

Not necessarily. If you’re seeking additional severance through a wrongful dismissal claim, income from a new job can reduce the amount your former employer owes you.

This is called mitigation.

For example, suppose you’re entitled to six months of common-law compensation after losing your job:

• You find a new job after three months.
• Your new job pays the same salary as your previous position.
• Your new earnings could reduce the additional compensation owed for the remaining three months.

However, this doesn’t mean you lose minimum termination or statutory severance pay required by employment standards legislation. It also doesn’t mean an agreed lump-sum settlement is automatically cancelled.

What If Your New Job Pays Less?

You could still be owed additional severance compensation.

If your new job pays less than your previous position, your former employer may remain responsible for the difference during your reasonable notice period.

Example: You lose a job paying $7,000 per month and find another position paying $5,000 per month.

If you’re still within your reasonable notice period, your former employer could owe you the $2,000 monthly difference as part of your wrongful dismissal compensation.

Your entitlement depends on your circumstances, employment contract and any severance agreement.

Can You Keep a Lump-Sum Severance Package If You Find Another Job?

Yes, in most cases. If you’ve accepted a final lump-sum severance settlement, you can usually keep the payment even if you start another job immediately afterward.

A lump-sum settlement is different from receiving ongoing salary continuance.

However, your settlement agreement matters. Some agreements contain conditions affecting payments or require you to disclose new employment.

If you haven’t accepted your employer’s offer, finding another job doesn’t mean you should sign the first severance package presented to you.

Your employer’s initial offer could be much less than your full entitlement.

Read our Severance Package Review guide before accepting an offer.

What Happens to Salary Continuance When You Start a New Job?

Salary continuance means your former employer keeps paying your salary for a period after your employment ends, rather than providing one lump-sum payment.

Starting a new job can affect those payments.

Some salary continuance agreements allow the employer to reduce or end payments when you find new employment.

Other agreements provide a partial payout of the remaining balance when you start another job.

The terms of your agreement determine what happens to your payments.

For more information, see our guide to severance pay, taxes, EI and salary continuance.

Do You Have to Look for Another Job While Receiving Severance?

Yes, if you’re seeking additional common-law compensation after losing your job. You’re expected to make reasonable efforts to find comparable employment.

This is called your duty to mitigate.

You aren’t required to accept just any job. You should make reasonable efforts to find work suited to your experience, skills, responsibilities and previous compensation.

Keep records of your:

• Job applications
• Interviews
• Recruiter communications
• Job offers

If your former employer claims you didn’t make reasonable efforts to find work, that could affect the additional compensation you recover.

Your duty to mitigate doesn’t reduce minimum statutory termination or severance pay.

Should You Tell Your Former Employer That You’ve Found Another Job?

That depends on your severance agreement and whether you’re pursuing a wrongful dismissal claim.

If you’re receiving salary continuance, your agreement might require you to report new employment.

If you’re negotiating additional compensation, your new income could affect the value of your claim. You may also have obligations to disclose relevant earnings during a legal proceeding.

However, your former employer doesn’t automatically have the right to stop payments simply because you’ve accepted another position.

Have your severance agreement reviewed before agreeing to any reduction in compensation.

Can You Still Negotiate Severance After Finding a New Job?

Yes. Finding another job doesn’t automatically prevent you from negotiating a severance package.

However, your new income may affect the value of a common-law claim, particularly if the new position pays the same or more than your previous job.

Your circumstances still matter, including:

• Your age
• Your length of employment
• Your position and responsibilities
• Your employment contract
• The severance already offered
• The timing and compensation of your new job

Depending on your circumstances, severance entitlements can reach up to 24 months’ pay.

Use our Severance Pay Calculator to estimate your potential entitlement.

Severance and a New Job: FAQs

Do I still get severance if I find another job before my termination date?

You can. However, the timing of your new employment and whether you leave before your termination date can affect your rights. Don’t resign early or change your departure date without understanding the consequences.

Can I work while receiving severance pay?

Yes. You can earn money from another job while receiving severance. Your new earnings may affect common-law compensation or salary continuance, but they don’t automatically eliminate statutory entitlements.

Do I have to pay back severance if I get a new job?

Usually not if you’ve received an unconditional lump-sum settlement. However, any repayment provisions or conditions in your agreement must be considered.

Do I lose severance if my new job pays more?

Not necessarily. Higher earnings can reduce or eliminate additional common-law income-loss damages for the overlapping period, but don’t automatically cancel statutory entitlements or an agreed settlement.

Does severance stop if I find a job during salary continuance?

It can. Some salary continuance agreements reduce or stop payments when you start another job. Others provide a partial payment of the remaining balance. The wording of your agreement determines what happens.

Can I receive severance and start a new job immediately?

Yes. But if you’re pursuing common-law damages, earnings from the new position may reduce your claim. Minimum statutory entitlements and an unconditional lump-sum settlement are different.

Does finding a new job affect severance in Ontario, Alberta or BC?

It can in all three provinces. New earnings may affect common-law compensation. The result depends on your employment contract, the applicable employment standards legislation and any settlement agreement.

What if you’re unionized?

Your collective agreement may contain specific rules governing termination, severance and new employment. Contact your union. Samfiru Tumarkin LLP’s employment law team does not assist with unionized workplace disputes.

Found Another Job? Find Out What Severance You’re Still Owed.

Finding another job doesn’t automatically mean your former employer has paid everything you’re owed.

If you’ve been dismissed and found new employment, have your severance package reviewed before assuming you’re entitled to nothing more.

The employment lawyers at Samfiru Tumarkin LLP help non-unionized employees in Ontario, Alberta and British Columbia understand their severance and termination rights.

Before you sign, always check first.

➡️ Have Your Severance Reviewed or call 1-855-821-5900.