N.L. government freezing wages, ending severance for non-union workers

The Newfoundland and Labrador government will cut severance and freeze wages for its non-union employees.

The changes are similar to ones in recent collective agreements with the Newfoundland and Labrador Association of Public and Private Employees, come under the new Salary Restraint and Extinguishment of Severance Pay Act. They include:

• The elimination of severance. Currently, employees with at least one year of continuous service are paid anywhere from one week's to 20 weeks' wages, depending on service.
  
• A wage freeze, which will expire March 31, 2020, in line with collective agreements with NAPE.

The government is also going to amend its Other Post-Employment Benefits Eligibility Modification Act to put in new rules regarding benefits for employees hired after June 1, 2018, including:

• Changes to group insurance entitlements. Current employees qualify for retirement benefits like group health and life insurance after 10 years of pensionable employment, but new hires will need 15 years to qualify.
  
• A sliding scale to calculate premiums at retirement, similar to provisions in the NAPE agreements.

According to the provincial government's list of bills, the acts had first readings May 24.

A news release from the provincial government Monday morning was largely vague on how much money the changes would save, apart from cutting severance.

"The implementation of these changes to benefits across the public service will result in millions of dollars in savings in 2018, and by 2026, annualized savings will be in the tens of millions," reads the release, which estimates the elimination of severance specifically is expected to save $25 million a year.