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Workers' compensation provides financial support to employees who suffer work-related injuries or illnesses. For HR and OHS directors and managers, it's critical to understand how compensation interacts with commission-based pay. Since eligibility rules and benefit calculations vary by jurisdiction, organizations must take a careful, compliant approach. This checklist is designed to guide you through assessing how workers' compensation impacts employees' commission earnings and ensuring fair and lawful application.
Commission and Workers' Compensation Checklist
- Verify Jurisdictional Rules
☐ Confirm the provincial/territorial jurisdiction governing workers' compensation for your employees.
☐ Review local workers' compensation board (WCB/WSIB/WorkSafe) policies on commission inclusion in wage-loss calculations.
☐ Note any sector-specific variations (e.g., construction, sales, or healthcare).
- Determine Employee Eligibility
☐ Check whether the employee's role is covered by workers' compensation insurance.
☐ Verify if commissioned employees are explicitly included in earnings definitions.
☐ Confirm the waiting period before wage-loss benefits begin.
- Calculate Average Earnings
☐ Identify the base period used to calculate average earnings (e.g., last 12 months, last 3 months, or most recent pay cycle).
☐ Confirm whether commissions, bonuses, and overtime are included in the wage-loss calculation.
☐ Ensure accurate payroll records are maintained for at least the required period (often 12 months).
- Assess Impact on Commission Payments
☐ Determine whether commissions stop, continue, or are prorated during WCB leave.
☐ Review if the employer must top up WCB payments to reflect commission-based earnings.
☐ Check for employer policy provisions that supplement WCB benefits for commissioned employees.
- Communicate with Employees
☐ Provide employees with a clear explanation of how their workers' comp benefits will be calculated.
☐ Document and share how commissions will be treated during the recovery period.
☐ Offer written guidance (e.g., in employment contracts or policy manuals) to avoid disputes.
- Compliance and Documentation
☐ Ensure compliance with both employment standards legislation and workers' compensation regulations.
☐ Keep detailed records of communications and calculations regarding commission adjustments.
☐ Review annually to confirm policies remain up to date with regulatory changes.
- Plan for Return-to-Work Programs
☐ Evaluate whether a gradual return-to-work program affects commission eligibility.
☐ Document whether modified duties will continue to generate commission opportunities.
☐ Coordinate with supervisors to ensure fair distribution of sales or commissionable tasks during transitional work.
Key Insights for HR/OHS Directors
Consistency Matters: Across the three jurisdictions with distinct workers' comp boards – Ontario, Alberta, and British Columbia – commissions are only included in wage-loss calculations if they are a regular, ongoing component of pay.
Payroll Documentation is Critical: Ensure thorough records of commission payments are available for at least the last 12 months.
Employer Top-Ups are Voluntary: None of the three jurisdictions require employers to top up WCB/WSIB benefits to match lost commission earnings. However, some employers choose to do so through internal policy for retention and fairness.
Jurisdictional Definitions Differ: While all three boards recognize commissions, the rules for irregular or seasonal commissions vary, so local interpretation can affect benefits.
Return-to-Work Planning: When transitioning an employee back, review how modified duties may limit commission opportunities and address potential income gaps.
