$80 Million Severance Pay Package for Mirage Hotel Workers: But What Is Severance Pay?

As the iconic Mirage Hotel and Casino plans to close its doors for the last time, its workers can expect to receive a portion of the staggering $80 million in severance pay.

We dive into what has been happening at the Mirage Hotel as well as answer frequently asked questions like “What is severance pay?” and “Who is entitled to statutory redundancy pay in the UK?”

Facing redundancy? Please don’t hesitate to contact Redmans Solicitors now. We have years of experience in the employment law sector, which enables us to provide specialist advice concerning your issue. Following a quick consultation, we can advise you on your possible next steps.

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The Mirage Hotel to Close for Renovation Following Acquisition By Hard Rock International

The Mirage Hotel and Casino opened in 1989 and has been a thriving icon of the Las Vegas Strip for over 30 years, boasting a famous volcano fountain and more than 3,000 rooms. However, in 2022, The Mirage was acquired by Hard Rock International for more than $1 billion and the company certainly has big plans for the venue going forward.

On 17 July, the legendary hotel will be closing for three years while it undergoes major renovations and rebranding. It plans to reopen as the Hard Rock Las Vegas in 2027, featuring a 700-foot tall, guitar-shaped tower sure to impress the masses.

Mirage Hotel Workers Get Big Payouts and Priority for Jobs After Reopening

The Culinary Workers Union, which represents more than 50% of Mirage staff, has stated that workers will receive $2,000 for every employment year, plus six months’ worth of pension and health benefits as part of severance pay. Additionally, workers in the Union will also be given priority for jobs at Hard Rock Las Vegas when it reopens and will be entitled to free training to help them gain skills for alternative roles.

The Union has described the types of assistance it intends to offer Mirage staff, in particular “host multiple Rapid Response events… at the Culinary Academy of Las Vegas to connect workers to unemployment, job fairs, union benefits, and other resources.”

Thanking staff for their work over the past years, The Mirage’s president, Joe Lupo, said, “Connecting the thousands of talented Mirage team members who provide outstanding service with new employment opportunities is a top priority.”

Is Severance Pay the Same as Redundancy Pay?

Severance pay is a type of financial compensation paid by employers to employees if their employment ends early, through no fault of their own. It is easy to confuse severance pay with redundancy pay as the two are quite similar; however, there are some important distinctions.

Whilst statutory redundancy pay is a sum which an employer must pay to an employee upon making them redundant, severance pay can comprise additional benefits, such as pension payments, bonuses, and discretionary sums, as well as payment in lieu of notice and payment for any outstanding holiday entitlements. Moreover, whereas the amount of statutory redundancy pay is prescribed by law, severance pay is negotiable.

Employers are not obliged to provide severance pay under UK law, but those who choose to do so will have a competitive advantage over those who don’t. Severance pay is also unregulated in the UK, meaning that employers can choose how to calculate it and to whom and in what circumstances it will be provided.

Am I Entitled to Statutory Redundancy Pay?

Under UK law, severance pay is not a requirement. However,  an employee will be entitled to statutory redundancy pay based on two factors:

  1. They have been working under their employer for at least two years;
  2. Their position either does not exist (due to downsizing/restructuring) or is no longer needed (due to outsourcing/relocation/change in business needs)

The amount of statutory redundancy pay to which an employee will be entitled depends on their weekly pay, their age, and their length of service (up to 20 years). Specifically, this will be the equivalent to (for each full year of service) –

  1. Half a week’s pay for those 21 and under
  2. One week’s pay for employees between 22-40, and
  3. One and half week’s pay for those aged 41 years and above.

One week’s pay is calculated as the average an employee earned per week over the 12 weeks before being made redundant and is currently capped at £700 (since 6 April 2024). This means the most an employee can receive in statutory redundancy pay is £21,000.

In addition, employees being made redundant will have the right to receive all accrued wages and equivalent pay for

  1. Outstanding holidays,
  2. Payment in lieu of notice (where relevant), and
  3. Any extra bonuses which have been agreed.

Statutory redundancy pay is the minimum that employers must provide to eligible employees; although they may choose to offer enhanced redundancy pay.

Employees will not be entitled to statutory redundancy pay if the employer offers either to continue their employment or suitable alternative work which is refused without good reason.

How Can Redmans Solicitors Help

If you have concerns or need advice about redundancy, statutory redundancy pay or severance pay, our friendly team of experts here at Redmans Solicitors will be pleased to help. Contact us now for a free, initial consultation and to find out how we can assist you.

So, to get started with us today: