N.J. Ruling: Commissions Are Wages Under WPL

In a March 17, 2025, unanimous opinion, the New Jersey Supreme Court held that workers who make commissions are protected by the state wage law.

Background

Plaintiff Rosalyn Musker’s employer began selling personal protective equipment (PPE) in March 2020 as the COVID-19 pandemic was taking hold in the U.S. The plaintiff’s employer informed its employees that there would be a different commission schedule for PPE sales based on net revenue instead of gross revenue. Musker eventually sold $32 million in PPE to various states and municipalities. She filed suit against her employer claiming she was entitled to $1.3 million in commissions for her sales of PPE under the New Jersey Wage Payment Law (WPL). The trial judge dismissed the WPL claims, holding that the plaintiff’s PPE commissions were not “wages” and the Appellate Division affirmed.

The Supreme Court had to determine whether commissions were a form of compensation as wages or supplementary incentives. The court noted that the WPL defines “wages” as a “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) (emphasis added). The court held that the definition of wages under the WPL is clear and unambiguous: Compensating employees by paying commissions for labor or services always constitutes a wage. 

The WPL does not define the terms “supplementary” and “incentives,” so the court looked to their ordinary meanings, concluding that “supplementary incentives” is compensation that motivates employees to do something above and beyond their “labor or services.” 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.” Therefore, it would be contrary to state law to have supplementary incentives include commissions.

The Decision

The court rejected the defendant’s argument and found that just because the product was new and only sold temporarily did not mean that the sales of the product fell outside of the “labor or services” an employee provides.

This ruling by the Supreme Court (1) overturns the Appellate Division ruling that found payments for PPE sales were supplementary incentives because PPE sales were not part of the plaintiff’s normal role, (2) vacates the trial judge’s order dismissing the plaintiff’s WPL claims and (3) remands for further proceedings.

About the Author:

Victoria Silva is of counsel at Wilson Elser. victoria.silva@wilsonelser.com