In a decision that will have wide-reaching implications for New Jersey employers and commissioned employees alike, the New Jersey Supreme Court recently ruled that commissions constitute “wages” under the New Jersey Wage Payment Law (N.J.S.A. 34:11-4.1). This clarification, issued in the case of Musker v. Suuchi, Inc., effectively overturns prior lower court decisions and significantly expands the remedies available to employees seeking to recover earned but unpaid commissions.
Unpaid Commissions are Legally Wages in New Jersey
The Supreme Court’s analysis focused on the plain terms of the Wage Payment Law which defines “wages” as “direct monetary compensation for labor or services rendered by an employee, where the amount is on a time, task, piece or commission basis.” The Supreme Court recognized that the Wage Payment Law clearly and specifically provides that commissions are wages due under the law.
Implications for Employers and Commission-Based Employees
This decision materially increases the legal exposure for employers who fail to pay earned commissions in a timely and complete manner. Not only can employees now sue to recover unpaid commissions under the Wage Payment Law, but prevailing employees may also recover:
- Liquidated damages equal to 200% of the unpaid amount,
- reasonable attorneys’ fees; and
- costs of litigation.
Anti-Retaliation Protections
Importantly, the statute also includes strong anti-retaliation protections. Employers found to have retaliated against employees for asserting their rights under the Wage Payment Law may face significant consequences:
- Reinstatement of the employee
- Liability for lost wages
- Potential punitive damages.
For employers with commission-based compensation structures, this ruling
underscores the importance of maintaining clear policies, accurate tracking, and timely payment practices. Likewise, employees should be aware of their enhanced rights and the remedies now available under New Jersey law.
If you have questions regarding compliance or enforcement under the New Jersey Wage Payment Law, contact Dennis Calo, Esq. at dcalo@hdrbb.com, or 201.441.9056.