Death of Employee - Handling Commissions

New2HR · January 2013

Good morning,

One of our salesmen passed last week and we are working through finalizing his pay. Our salesmen earn commissions based on when payments are made by customers, rather than when business is booked. The question now becomes, do we continue to pay commissions to his beneficiary on accounts that he booked before his death for which future payments are expected or do we consider what has been earned up to this point as the final payout? What is the cutoff of payment in this circumstance? This is a first for our company and so this will set precedent for the future.

Thank you.

Joy1 · January 2013

What state are you operating in? Sometimes state law controls in these cases.

TXHRGuy · February 2013

Many states require a written commission compensation plan that describes these situations. If you do not have an agreement or well known, written policy saying accounts paid post-termination do not result in earned commissions, then you should probably pay the estate. If you would rather not pay, you should check with legal counsel first.

Death of Employee - Handling Commissions

Comments