New Jersey Supreme Court Confirms: Commissions Are Wages Under the New Jersey Wage Payment Law

In a decision with significant implications for employers and employees alike, the New Jersey Supreme Court on March 17, 2025, clarified that commissions constitute wages under the New Jersey Wage Payment Law (“NJWPL”).

In Musker v. Suuchi, Inc. et al., the Court reversed the rulings of both the trial court and the Appellate Division, holding that commissions paid for an employee’s labor or services “always constitute a wage under the WPL.”

In drawing its conclusion, the court focused on the NJWPL’s definition of “wages,” which is defined 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.” N.J.S.A. 34:11-4.1(c) (emphasis added).

Case Background

Rosalyn Musker, the plaintiff in the case, was a sales employee at Suuchi, Inc., a technology-driven fashion supply chain platform. Her compensation included an $80,000 base salary and sales commissions under Suuchi’s Sales Commission Plan. Traditionally, she sold software subscriptions to apparel companies.

However, as the COVID-19 pandemic hit in 2020, Suuchi pivoted its business model and began selling personal protective equipment (PPE)—and Musker was tasked with selling it. While the company did not formally update the commission plan to reflect this new line of business, it did send an email outlining sales terms for PPE transactions.

Musker delivered results. Yet, when it came time for commission payments, she alleged that the company failed to fully compensate her. She filed a lawsuit under the NJWPL, asserting that her unpaid PPE commissions constituted “wages” that were wrongfully withheld.

Suuchi disagreed, characterizing the commissions as “supplementary incentives”—a term that the NJWPL explicitly excludes from the definition of wages.

The Lower Courts’ Takes

At both the trial and appellate levels, the courts sided with Suuchi. The judges found that because Musker already received a base salary, the PPE commissions were not essential compensation for her services, but rather “extras”—in other words, not protected wages.

But the New Jersey Supreme Court saw it differently—and laid down a clear and employee-friendly interpretation of the law

The New Jersey Supreme Court’s Decision

The NJWPL 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.” (N.J.S.A. 34:11-4.1(c)). The law excludes “supplementary incentives and bonuses” that are calculated independently of regular wages.

The Supreme Court found this statutory language to be “clear and unambiguous.” To reinforce its interpretation, the Court turned to dictionary definitions—focusing on the terms “labor,” “services,” and “commission.” It found that “commission” payments are indeed direct compensation for the labor or services an employee performs—making them squarely within the NJWPL’s definition of wages.

In contrast, “supplementary incentives” are payments meant to motivate employees beyond their required duties. And that’s the critical distinction: commissions like Musker’s were tied to services she was obligated to perform as part of her sales role. Selling PPE became part of her job, even if it was a new product offering. Thus, the Court concluded that Musker’s commissions were wages, not optional incentives.

Takeaways

If an employee earns a commission for work required as part of their job, it is a wage—and must be paid accordingly. For companies operating in fast-moving industries—where roles, duties, and compensation structures shift quickly—this ruling is a timely reminder to reassess how compensation is structured and documented. Informal changes to compensation plans, like the email Suuchi sent regarding PPE commissions, do not absolve employers of their legal obligations.

The consequences for non-compliance with the NJWPL are steep. Employers who fail to pay wages—including commissions—may face not only the amount owed but also liquidated damages (up to 200% of the unpaid wages) and attorneys’ fees.

Jessica Hajdukiewicz, a Law Clerk – Pending Admission (not admitted to the practice of law) in the firm’s New York office, contributed to the preparation of this post.