Commissions are considered "wages" under the New Jersey Wage Payment Law subject to its protections. Under the New Jersey Wage Payment Law, a commission cannot be excluded from the definition of wages as a "supplementary incentive." Some companies may attempt to deprive their employees of their rightful payment of wages by claiming commissions are not wages. When this happens, an employee can bring a suit under New Jersey Wage Payment Law and potentially receive triple the amount of the lost commission, making the employer company liable for treble damages and attorneys’ fees.
The distinction between “commission” and “supplementary incentive” is important because a “commission” has all the legal protections of New Jersey Wage Payment Law (WPL), N.J.S.A. 34:11-4.1 to -4.15 as amended by the 2019 Wage Theft Act. Therefore, employers who refuse or fail to pay commissions to their employees are subject to a six-year lookback period to determine the amount rightfully owed to employees, plus an additional 200% of the amount in liquidated damages, and attorney’s fees. See NJ Employment Attorney, When Employers Refuse to Pay Commissions as Wages, it Could Entitle Employee to Treble Damages.
Employers will sometimes violate other laws by discriminating in their payment of commissions based on the person’s race, sex or other protected class. See Unequal Pay and Wage Claims - Diane B. Allen Equal Pay Act.
Don’t sit on your rights. If your employer failed to pay your wages in accordance with the law, you should contact this law office immediately for a free consultation. This law office accepts cases from all over New Jersey and has locations in Southern, Central and Northern NJ to meet with clients. Call today for a free consultation.
The Employment Agreement or Commission Plan May Determine When a Cause of Action Accrues in the Event on Non-payment.
The New Jersey Wage Payment Law (WPL), N.J.S.A. 34:11-4.1 to -4.15 as amended by the 2019 Wage Theft Act when interpreted by New Jersey courts generally clarifies that statutes of limitations in NJ wage claims generally begin to run when the cause of action accrues in the event of non-payment. Generally, the cause of action accrues typically when the payment is due but not paid, and the actual the payment of wages obligation is breached by the employer.
Many severance agreements do not address commissions owed. The timing of when the commissions were due under the employment agreement or commission plan typically determines when the statute of limitations begins to run on unpaid wages, which must be paid in accordance with the agreed terms or other New Jersey statutory requirements.
Because the New Jersey Wage Payment Law defines “commissions” as “wages”, commissions must be paid in accordance with the agreed terms or other New Jersey statutory requirements. In a case of a termination, if the commissions were due after the date of termination, and the employer failed to pay them on the specified due date, there is a breach of the payment obligation, and the statute of limitations typically would begin from that date of non-payment by the employer.
Therefore, the timing of the employer’s breach of the payment obligation, by not paying the commissions when they were due, rather than the termination date of the employee, generally determines the beginning of the limitations period for wage claims on unpaid commissions.
According to the US Bureau of Labor Statistics approximately 13.4 million workers are employed in sales and related occupations in the U.S. This figure accounts for approximately 8.7% of total US employment. There are approximately 3.8 million employees working as retail salespersons. Many have sales commissions as a substantial part of their remuneration for their work.
Some employers attempt to discredit the employee’s job performance or cheat them out of their rightful wages, by giving them undervalued Employee Performance Evaluations, which can be highly speculative and not data based. While it is not always the case, these evaluations can and often do directly correlate to promotions, demotions and terminations. Employee Performance Evaluations can sometimes be the result of an illegal bias on the part of the evaluator, such as a bias against a certain race, age, sex, etc. See Bergen County, New Jersey Sex Discrimination Lawyer.
Performance evaluations are usually given incrementally, periodically or yearly on specified dates or based on the date that the employee commenced his or her employment. While all evaluations are different and depend on the specific employer, most are based on various subjective and objective criteria. Accordingly, this means that there will be some aspects of the evaluation that will be based on ascertainable concrete measurements, such as the number of sales an employee has closed, as well as some aspects that are a matter of the individual evaluator’s opinion, such as a perception, real or imagined, of the employee’s interest in the job.
Note: This article is for general information purposes only, and it is not to be construed as giving legal advice in any specific case.
WHAT YOU CAN DO
If your employer cheated you out of wages, you should contact this law firm today for a free consultation. I am an experienced, aggressive and compassionate employment attorney who will be aggressive about enforcing your rights. This law office accepts cases from all over New Jersey and has locations in Southern, Central and Northern NJ to meet with clients.
Contact Hope A. Lang, Attorney at Law today for a free consultation.
Hope A. Lang, Attorney at Law represents workers throughout the entire state, including Hackensack, Jersey City, Newark, Irvington, Orange, East Orange, Trenton, Paterson, Montclair, Elizabeth, North Brunswick, Cherry Hill, Vineland, Union, Plainfield, Hamilton Township, Lakewood, Edison, Parsippany-Troy Hills, Franklin, Lakewood, and every NJ County, including Bergen, Hudson, Middlesex, Essex, Monmouth, Somerset, Ocean, Union, Camden, Passaic, Morris, Gloucester, Atlantic, Burlington, Camden Counties.