Supreme Court of New Jersey Holds That ‘Wages’ Include ‘Commissions’ Under New Jersey’s Wage Payment Law Regardless of Whether Employee is Paid a Base Salary
In a recent opinion, the Supreme Court of New Jersey confirmed that “compensating an employee by paying a ‘commission’ for ‘labor or services’ always constitutes a wage under the Wage Payment Law (WPL)” and cannot be excluded from the definition of wages as a “supplementary incentive.”
03.20.25
In Rosalyn Musker v. Suuchi, Inc., the plaintiff, Rosalyn Musker, filed a complaint against her employer, Suuchi, Inc. (Suuchi), alleging that Suuchi withheld her wages, consisting of over $1.3 million in unpaid commissions, in violation of the WPL. Suuchi argued that the commissions were supplementary incentives, and thus not wages covered by the WPL, because Musker received a base salary and the commissions related to a one-time event for the company (i.e., the sale of pandemic-related personal protective equipment, which were not part of the company’s ordinary business).
The WPL defines “wages” as “the direct monetary compensation for labor or services rendered by an employee, where the amount is determined on a time, task, piece, or commission basis excluding any form of supplementary incentives and bonuses which are calculated independently of regular wages and paid in addition thereto.” N.J.S.A. 34:11-4.1(c). The Bergen County Superior Court and the Appellate Division held that the commissions claimed by Musker were actually “supplementary incentives” and therefore excluded from the WPL’s definition of “wages.”
The Supreme Court of New Jersey reversed the Appellate Division’s opinion and described the WPL’s definition of “wages” as “clear and unambiguous.” The Court distinguished “supplementary incentives,” or “compensation that motivates employees to do something above and beyond their ‘labor or services’” from “commissions,” which are earned “for labor services rendered by an employee” and “can never be a ‘supplementary incentive.’” The Court further described examples of “supplementary incentives” to include achieving perfect attendance, paying an employee for sharing office space with another employee, and referring a friend to apply for an open position. Accordingly, Musker earned her commissions through “labor and services” she provided to Suuchi. Therefore, the Court held that Musker’s commissions were “wages” under the WPL.
Employers should take away from the Musker decision that earned commissions are required under the WPL to be timely paid to employees regardless of whether the employee is also paid a base salary.
Co-authors Gregory Selllers, partner, and Quincy Conrad, associate, are members of the Litigation Department at Klehr Harrison.