The GigReporter

The New Jersey Supreme Court ruled that commissions are considered wages under the New Jersey Wage Payment Law (WPL) because they directly compensate employees for labor or services rendered. This decision overturned a prior ruling in Rosalyn Musker v. Suuchi, Inc. that had classified certain commissions as "supplementary incentives."

Rosalyn Musker, the Plaintiff, sold Personal Protective Equipment (PPE) during the pandemic, generated significant revenue on those sales only to wind up in a dispute on the payments. Musker earned a base salary of $80,000 a year, with the opportunity to boost her pay anywhere from 1.75% to 4% on commissions. When Musker began selling PPE equipment, it was unlike the other line of work she was doing previously (selling computer software packages). Her employer believed because the sales of PPE was so different that she wasn’t entitled to the typical commissions and viewed them as “supplemental incentives’. Supplementary incentives, as clarified by the Court, are rewards offered for actions that go beyond an employee's regular duties (working out of a particular office location, achieving perfect attendance, referring a friend to apply for an open position were some of the Court’s examples), but importantly what distinguished them from “wages”.

The Court emphasized commissions remain wages even if tied to temporary or unusual sales situations like the PPE sales for this company. It also rejected the argument that base salary and commissions earned together could be classified as supplementary incentives. The New Jersey Supreme Court's ruling reinforces a crucial principle: commissions are an integral part of an employee's compensation and should be treated as wages under the New Jersey Wage Payment Law. By directly compensating employees for their labor or services, commissions honor the value and effort they bring to their roles, regardless of the nature or context of the sales.