In Musker v. Suuchi, Inc. (A-8-24/089665) (Decided March 17, 2025), the New Jersey Supreme Court held that “commissions” are considered “wages” under the Wage Payment Law (WPL). Accordingly, commissions are subject to the WPL’s protections.
Facts of Musker v. Suuchi, Inc.
Plaintiff Rosalyn Musker worked in sales for defendant Suuchi, Inc. (Suuchi), which sells software subscriptions to apparel manufacturers. In addition to her base salary, Musker was eligible for commissions under Suuchi’s Sales Commission Plan (SCP). In March 2020, in response to the COVID-19 pandemic, Suuchi decided to sell Personal Protective Equipment (PPE), also on a commission basis.
Musker generated approximately $34,448,900 in gross revenue by selling PPE. The parties disputed whether the 4% commission she was entitled to for those sales was of gross or net revenue. The parties also disagreed about whether Musker’s PPE commissions are “wages” or are excluded from the WPL as “supplementary incentives” under N.J.S.A. 34:11-4.1(c).
To constitute a “wage” under the WPL, there first must be “direct monetary compensation for labor or services rendered by an employee.” N.J.S.A. 34:11-4.1(c). Second, an employee’s “direct monetary compensation” can be “determined on a time, task, piece, or commission basis.” Also relevant, the statute includes an exception from the definition of “wages” for “supplementary incentives . . . which are calculated independently of regular wages
and paid in addition thereto.”
Musker filed a complaint alleging that Suuchi violated the WPL by withholding her “wages.” The trial judge dismissed the WPL claims, holding that Musker’s PPE commissions were not “wages” under the WPL. The Appellate Division affirmed. The appeals court emphasized that “[i]n many, perhaps most, instances a promised commission will qualify as ‘wages’ under the [WPL] and not comprise a supplementary incentive.” However, the Appellate Division “concur[red] with the trial [judge’s] determination that the commissions claimed by [Musker] on PPE sales were not ‘wages’ under the [WPL] but instead were ‘supplementary incentives’” and therefore excluded from the WPL.
NJ Supreme Court’s Decision in Musker v. Suuchi, Inc.
The New Jersey Supreme Court unanimously reversed, holding that “commissions” are “wages” under the WPL. As Justice Douglas M. Fasciale explained:
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, compensating an employee by paying a “commission” for “labor or services” always constitutes a wage under the WPL. Therefore, contrary to the appellate court’s conclusion, a “commission” under the WPL cannot be excluded from the definition of “wages” as a “supplementary
incentive.”
In reaching its decision, the New Jersey Supreme Court cited the ordinary meaning of the key terms in dispute. It noted that a “supplementary incentive” is compensation that motivates employees to do something above and beyond their “labor or services.” Thus, “commission” earned “for labor or services rendered by an employee” can never be a “supplementary incentive.” The Court further found it would be “illogical” and contrary to the canons of statutory interpretation to interpret the WPL’s reference to “supplementary incentives” to include “commissions.”
Applying this analysis to the facts of the case, the New Jersey Supreme Court found that selling PPE required Musker to render “labor or services” as an employee of Suuchi; it further found it “undisputed” that Musker’s compensation for PPE sales was determined on a commission basis. Those PPE commissions, which she earned solely because she performed “labor or services,” are therefore “wages” under N.J.S.A. 34:11-4.1(c).
According to the New Jersey Supreme Court, just because a product is new and potentially sold only temporarily does not mean that sales of that product somehow fall outside the regular “labor or services” an employee provides. The Court also emphasized that receiving a base salary does not turn “commissions” into “supplementary incentives” under the WPL.