By Barry M. Capp and Layne A. Feldman
In a unanimous March 17, 2025, opinion, the New Jersey Supreme Court held that earned commissions are “wages,” not “supplementary incentives,” and are therefore covered by the rights and remedies of the state’s Wage Payment Law (WPL). The decision in Musker v. Suuchi means that New Jersey employers who withhold or fail to pay commissions expose themselves to significant liability under the WPL, which allows an aggrieved worker to recover not only their unpaid wages but also liquidated damages in an amount of up to two times the unpaid wages as well as attorneys’ fees and costs.
In Musker, the plaintiff was a salesperson for the defendant Suuchi, which sold software subscriptions to apparel manufacturers. The plaintiff was paid a base salary and a commission on her sales. When the COVID-19 pandemic hit, Suuchi began selling personal protective equipment (PPE) and offered its salespeople 4% commissions on those sales. The plaintiff sold $32 million worth of PPE and, as such, claimed she was entitled to $1.3 million in commissions. When Suuchi refused to pay the commissions, the plaintiff sued, alleging violations of the WPL.
The trial court dismissed the WPL claims, holding that the plaintiff’s commissions were not “wages” and, therefore, outside the WPL’s scope. The Appellate Division affirmed.
The state’s high court came to a different conclusion, reversing the appellate court and holding that “commissions” are, in fact, “wages” as defined in the WPL. The Court noted 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.”
“Under that definition,” the Court wrote, “compensating an employee by paying a ‘commission’ for ‘labor or services’ always constitutes a wage under the WPL.”
The Court rejected the argument that the plaintiff’s commissions constituted “supplementary incentives” that are expressly excluded from the WPL. Though the WPL does not define that term, the Court found that the ordinary meaning of a “supplementary incentive” is “compensation that motivates employees to do something above and beyond their ‘labor or services.'” Thus, under the WPL, “a ‘supplementary incentive’ is not payment for ‘labor or services’ and a ‘commission’ earned ‘for labor or services rendered by an employee’ can never be a ‘supplementary incentive.'”
This definitive ruling makes it clear that withholding commissions is as much of a WPL violation as withholding wages and can be the basis of substantial liability for employers and significant recoveries for employees. If you have questions about this case or the WPL generally, please contact Barry Capp or Layne Feldman at Ansell Grimm & Aaron.
