As a business owner, you likely would rather not get involved in an employee’s divorce. However, if you have a high-level employee who’s divorcing, your company will likely need to provide a fair amount of information regarding their compensation.
As part of the financial disclosures required in divorce, they’ll need to have documentation of not just salary but bonuses, deferred compensation, stock options, perks like the use of a car or apartment and everything that goes into their full compensation package. Even employees who may be farther down the rung may rely on commissions for a substantial part of their income.
The risks of manipulating the timing of compensation
All of this must be presented completely and accurately. You may have an employee who’s asking you to delay bonuses or other compensation until after the divorce is final. That can place the company in legal jeopardy if payment is knowingly delayed to prevent the other spouse from getting their fair share.
If the divorcing employee is a partner or co-owner of the business, things can be more complicated because they own a share of the company. A key reason divorce should be addressed in partnership agreements is to prevent a non-partner spouse from getting a share of the business.
Protecting confidential information
Protecting confidential company data and proprietary information is also a concern if you’re giving documents to an employee to use and share in their divorce. Depending on the information, you may need to require confidentiality agreements and other protections to ensure that it doesn’t go beyond those who have a right to see it and that they don’t disclose it inappropriately.
If this is the first time you’ve had to provide this information or if there’s anything about this particular situation that leaves you with questions or concerns, it’s smart to get legal guidance before you disclose any information.