Matternity Pay for Full Commission-Based Salaries

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  Dan Morasi 1 year ago

  Matternity Pay for Full Commission-Based Salaries

  I have a small company employing almost 20 people, mostly women. We have (proudly) offered 8-week maternity benefits and so far twice used. They have been full time employees on set salaries. Need help to design a fair maternity pay for a fully commissioned based employees. Do you have any advice? I’d appreciate your opinion.

  Thanks,
  Dan

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  Laura Handrick
  

  Moderator

  

  1 year ago

  Hi Dan,

  How great of your company to offer maternity benefits!

  To ensure the pay is fair for 8 weeks of maternity pay offered to a commission based employee, you will want to ‘average’ her weekly pay over 90 days at least. For example, let’s say she worked her regular hours and earned typical commissions for the 90-days prior to her maternity leave. Figure out what the weekly equivalent would be (on average over those 90 days), and use that to pay her weekly. Just make sure you average ‘full weeks’, not weeks she was sick, didn’t work, etc.

  For example, if she made $10K in commissions over the last 3 months, then you’d divide that by 3 and come up with $3,333 per month. Since you’re paying 8 weeks (2 months) pay, then you’d pay her $6,667 as an example.

  Another option might be to look at her last year’s ‘earnings’ and divide those by week’s worked (say 50, if for example, she took 2 weeks vacation last week). So if she made $50k last year for 50 week’s work, then you would pay her $1,000 a week for 8 weeks or $8,000.

  Just be sure she’s in agreement with your payment method. The only risk you run here is if she feels (and can prove in a court) that she was compensated unfairly as compared to other employees paid while on maternity leave.

  Best!
  Laura, HR Writer, SPHR

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