What happened?

On March 17, 2025, the New Jersey Supreme Court ruled that commissions are considered “wages” under the New Jersey Wage Payment Law (NJWPL).

Overview:

The court overruled a previous appellate court decision that classified commissions as supplementary incentives rather than wages: the Supreme Court held that commissions always meet the definition of wages under the NJWPL because they directly compensate an employee for performing a service.

• Implications for Employers:
  
  • Employers must treat commissions as wages, ensuring timely payments and avoiding illegal deductions as mandated by the NJWPL.
  • Non-compliance can lead to severe financial penalties, including paying 200% of the unpaid wages plus attorney’s fees.
  • Employees have the right to file a private lawsuit for withheld commission payments under wage theft claims.

• Additional Information: Employers utilizing commissions as a mode of employee compensation should review their commission or payment agreements and processes to ensure compliance with the NJWPL by treating commissions as wages and adhering to the same payment standards as regular wages.

Additional Information:

Case Background: In Musker v. Suuchi, Inc., the court determined that commissions earned by a sales representative for selling personal protective equipment (PPE) during the COVID-19 pandemic were “wages” under the NJWPL.

• The court rejected the argument that these commissions were supplementary incentives because they were tied to the employee’s labor or services.

Source References

• NJ Supreme Court – Rosalyn Musker v. Suuchi, Inc. (No. 089665) 

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