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Massachusetts Supreme Judicial Court Holds Commissions to be Wages eligible for Treble Damages under the Wage Act

Posted on Apr 10th, 2013

A recent decision by the SJC holds that sales commissions can be wages within the meaning of the Massachusetts Wage Act, potentially subjecting employers to treble damages for failure to pay these amounts in a timely manner as required by the statute.   This case is called WEBER vs. COAST TO COAST MEDICAL, INC. et al.

The Court stated that while not all benefits fall within the term wages, commissions have been held to do so. The Court cited Section 148, which expressly states that holiday and vacation pay due under an agreement, as well as commissions that are “definitely determined” and “due and payable” to the employee, are wages within the meaning of the statute.  The Court approvingly cited earlier decisions, which reasoned the the legislative intent was “to apply the benefits of the statute to current-day employees as defined in the statute, including executives and professionals earning a substantial base salary plus commissions.”

This case serves as a clarification on this important point and a reminder to employers that commission plans should be in writing, and should clearly state any terms and conditions applicable to the amount and timing of the payments.