New Jersey Lawyers BlogNew Jersey Supreme Court Decides that Commissions are Commissions, and Therefore Wages
Several New Jersey employment laws govern the payment of wages. The New Jersey Wage and Hour Law (along with the Federal Fair Labor Standards Act) governs minimum wage and overtime. The New Jersey Wage and Hour Law governs what are considered wages and when
they must be paid. The Supreme Court of New Jersey considered whether and under what circumstances “commissions” are considered “wages” protected by the Wage Payment Law.
Background – PPE Sales at Suuchi, Inc., During the Pandemic
Suuchi, Inc. sells a software-driven platform. Its salespeople are paid commissions of 1.75 percent for the first $729,167 of sales based on annual recurring revenue, and 4 percent beyond that. Suuchi’s plan stated that it was “intended to cover all sales situations.” During the Covid Pandemic, Suuchi branched out into selling personal protective equipment (PPE). The company sent an email advising its sales people that commissions would be based on net revenue, and commissions would be 4 percent when net revenue generated on PPE. However, the chief executive officer sent a follow-up email clarifying that “we are providing the same commissions on these one time orders and not penalizing for not being [annual recurring revenue].”
common. The New Jersey Appellate Division recently addressed one of the laws behind this issue in the case of