Dismissal, severance or termination pay are payments by an employer to an employee for involuntary separation of the employee from the service of the employer.

These payments are wages because the pay is usually based on past service and constitutes additional compensation flowing from the employment relationship.

Determine the true nature of the dismissal, severance or termination payment. A determination is not made on the basis of the label attached to the payment.

If the payment is remuneration for employment, it is wages unless there is a wage exclusion under section 209 of the Act (see RS 01402.000 ff.).