On March 17, 2025, the New Jersey Supreme Court held that commissions fall under the definition of “wages” for the purpose of New Jersey’s Wage Payment Law (NJWPL).

The matter of Rosalyn Musker v. Suuchi, Inc. (A-8-24) (089665), presented the Supreme Court with the legal question of whether commissions are “wages” or “supplementary incentives” under the NJWPL. The plaintiff worked in sales for the defendant company. In addition to her base salary, she was eligible for commissions. She also earned commissions for selling personal protective equipment (PPE) in 2020 during the COVID-19 pandemic. The commissions generated from the PPE sales that ignited a disagreement as to their proper classification.

The plaintiff argued that the defendant violated the NJWPL by withholding her “wages.” The defense argued that there was no violation since the commissions were, in fact, “supplementary incentives.” The Superior Court and the Appellate Division agreed with the defense. The Supreme Court reversed and, and after a detailed analysis of the NJWPL’s plaint terms and legislative intent, concluded that the plaint text of the section defining “wages” was clear and unambiguous. As such, the Supreme Court held that:

The WPL defines “wages” as “direct monetary compensation for labor or services rendered by an employee, where the amount is determined on a time, task, piece, or commission basis.” N.J.S.A. 34:11-4.1(c). Under that definition, compensating an employee by paying a “commission” for “labor or services” always constitutes a wage under the WPL. Therefore, a “commission” under the WPL cannot be excluded from the definition of “wages” as a “supplementary incentive.”

As a result of this ruling, employers must treat commissions as wages and be mindful of the payment timing and withholding protections of the NJWPL. Employers who fail to timely pay or make improper deductions could face significant penalties. Additionally, employees have a private cause of action to claim wage theft if not properly paid.

(This blog, prepared by Campanella Law Office, is for general informational purposes only and is not intended to convey specific legal advice, nor is it intended to create or constitute an attorney-client relationship.)