133% More. That’s the Potential Increase in What Severance Could Cost You
And What Employees Could Be Owed
Let that number sink in for a moment.
Under the 2026 Severance Amendment Bill, the financial stakes of redundancy are set to rise dramatically — and for monthly-rated employees with five or more years of service, the increase is nothing short of transformational.
Here’s the comparison:
For workers with 1 to 4 years of service, the entitlement increases to:
- 3 weeks’ pay per year for hourly, daily, or weekly-rated workers; and
- 1 month’s pay per year for monthly-rated employees.
For workers with 5 years or more of service, the structure becomes even more significant:
- Hourly, daily, or weekly-rated workers:
- 4 weeks’ pay per year for the first 4 years; and
- 6 weeks’ pay per year from the 5th year onward.
For Monthly-rated workers:
- 1¼ months’ pay per year for the first 4 years; and
- 1¾ months’ pay per year from the 5th year onward.
So, for instance for monthly-rated employees with five or more years of service, the increase is particularly significant. The proposed rate of one and three-quarter months’ pay per year represents approximately a 133% increase over the current provision of three weeks’ pay per year.
The Bill also introduces stronger protections in insolvency situations — severance benefits will now rank alongside wages as a priority claim, meaning workers are far less likely to be left behind when a company is wound up.
For employers, this is a balance sheet conversation. Organisations with large, long-serving workforces need to model these new figures and understand the full financial exposure they now carry. For employees, this is a meaningful step toward fair compensation in the event of job loss.
The time to act is before enactment — not after. The Retrenchment and Severance Benefits (Amendment) Bill 2026 represents one of the most significant updates to Trinidad and Tobago’s labour framework in a generation. One thing is certain—whether you are an employer or an employee, the landscape is changing, and staying informed will be key.
Moore TT provides financial modelling, severance liability assessments, and strategic advisory services to help organisations plan proactively, manage costs responsibly, and approach workforce decisions with clarity and confidence.
Know your numbers before the law changes them for you. Reach out to Moore TT today!
