A Limited Liability Company
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A Limited Liability Company
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Elliot D. Ostrove, Esq.
Isaac Lee, Esq.
On March 17, 2025, a unanimous New Jersey Supreme Court held that sales commissions are protected “wages” under the New Jersey Wage Payment Law (the “WPL”). The decision reversed a lower courts’ holding, which ruled in favor of the employer software company, Suuchi, Inc. (“Suuchi”), and establishes a significant protection for employees who make their living by commissions. Rosalyn Musker v. Suuchi, Inc., 260 N.J. 178 (2025).
Rosalyn Musker (“Ms. Musker”) worked for Suuchi where she was paid a base salary plus sales incentive compensation for selling the company’s products. In March 2020, Suuch started selling Personal Protection Equipment (“PPE”) for Suuchi in response to the COVID-19 Pandemic. Selling PPE to the State of New York and the Township of North Bergen, she generated over $34,448,990.00 in gross sales revenue. Ms. Musker and Suuchi disagreed over whether she was owed sales incentive compensation on the gross sales she generated or whether she was to be paid sales incentive compensation on the net revenue from those sales. Because of the dispute, Suuchi refused to timely pay her any sales incentive compensation in accordance with her employment agreement. Suuchi also claimed that Ms. Musker’s sales incentive compensation constituted “supplementary incentives” and were not protected “wages” under its definition in the WPL.
Ms. Musker filed a complaint alleging (among other claims) that, Suuchi improperly withheld her wages, pursuant to the WPL. The trial court dismissed the claim in favor of Suuchi, finding that sales incentive compensation is “supplementary incentives” to her base salary. The Appellate Division affirmed. The Supreme Court granted leave to appeal and ultimately issued its decision on March 17, 2025, reversing the decision of the Appellate Division.
Under the WPL, wages are defined 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).
Justice Fasciale, writing for a unanimous Court, explained that the definition of “wages” in the WPL is “clear and unambiguous,” and that “commissions” are included as wages because commissions directly compensate an employee for services to their employer. Musker, 260 N.J. at 187. The Court rejected the argument that “receiving base salary turns ‘commissions’ into ‘supplementary incentives’ under the WPL.” Id. at 16. Selling for Suuchi was Musker’s assigned task that was compensated through her sale incentives. “Commissions” therefore are protected “wages” under to the WPL. Id. at 189. In so concluding, the Court contrasted the sales incentive compensation at issue with “supplementary incentives,” which are “added compensation[] for doing something that is beyond the employee’s ‘labor or services,’” giving examples like employee referral bonuses or winning a prize for participating in an office costume contest. Id.
The WPL is a remedial statute that requires predictable timing and method for wage payment and deters unlawful wage withholding. Hargrove v. Sleepy’s, LLC, 220 N.J. 289 (2015). The WPL mandates that employers pay their employees at regular intervals, at least twice per month (with some exceptions). N.J.S.A. 34:11-4.2. Employees that believe their employers have unlawfully withheld wages can file an action in Superior Court and, if successful, can recover lost wages, including additional damages of up to 200% lost wages, attorney’s fees, and costs. N.J.S.A. 34:11-4.10.
The New Jersey Supreme Court has ruled that the WPL is “liberally construed” to effectuate its remedial purpose. Hargrove, 220 N.J. at 202. Employers should therefore take guidance deciding when and how to compensate their employees. A company’s refusal to pay an employee’s wages in accordance with the statute and any employment agreements will constitute improper wage withholding. If a court determines that a company violated the WPL by failing to pay its employees’ wages, “officers … and any agents having management of such corporation” may be held personally liable for damages arising from such violations. N.J.S.A. 34:11-4.1(a).