NJ Supreme Court Rules that Commissions Count as Wages, Even If You Get a Base Salary
Nov 5, 2025 | Written by: | Share
The New Jersey Supreme Court recently sided with a sales employee in a big win for workers who earn commissions. The Court ruled that commissions are “wages” under New Jersey’s Wage Payment Law, meaning employers have to pay them just like regular paychecks — even if the employee also earns a salary.
What Happened
The case started with a saleswoman who worked for a software company. Her pay plan included two parts: (1) a base salary, and (2) a commission based on her sales numbers. When the COVID-19 pandemic hit, the company pivoted from selling software to selling personal protective equipment (PPE). The employee adapted quickly and sold more than $34 million worth of PPE products.
When it came time to pay out her commissions, the company refused to pay the full amount she earned. It claimed the commissions were just “extra incentives” — not actual wages — and said that because she got a base salary, those commissions weren’t protected under New Jersey’s wage laws.
The Legal Dispute
The employee sued, arguing the company broke the New Jersey Wage Payment Law (NJWPL) by not paying her what she had earned. The company pushed back, saying she could only sue for breach of contract, not under the wage law, because commissions supposedly didn’t count as wages.
At first, both the trial court and the Appellate Division agreed with the employer — they said commissions tied to performance were “supplementary incentives,” not “wages,” and that they were therefore excluded from the NJWPL. That meant the employee couldn’t get the extra damages and penalties the NJWPL provides.
What the Supreme Court Said
The New Jersey Supreme Court unanimously disagreed. The justices said the company’s argument made no sense. The law clearly says wages include money paid “on a time, task, piece, or commission basis.” The Court explained that commissions aren’t “extra” pay, they’re a core part of how salespeople earn a living. A “supplementary incentive,” the Court said, is something that rewards going above and beyond normal job duties. The Plaintiff’s commissions were directly tied to doing her job — selling products — so they absolutely counted as wages.
The Supreme Court’s ruling meant that the employee could sue under the NJWPL and seek double the amount owed (known as liquidated damages), plus attorneys’ fees and costs.
Why This Case Matters
This decision is important for anyone in sales. It confirms that commissions are legally protected wages, even if you also earn a salary. If an employer delays or refuses to pay commissions, employees now have clear legal grounds to take action and to recover more than just the unpaid amount.
Bottom Line
If you earn commissions in New Jersey, they’re not optional bonuses, they’re part of your paycheck. And if your employer doesn’t pay, the law is firmly on your side.
If you’re an employee who earns commissions and your employer has delayed or refused to pay what you’ve earned, you don’t have to accept it. New Jersey law is clear — commissions are wages, and you have the right to recover what you’re owed, along with potential penalties and attorney’s fees. If you’re an employer, this decision is a reminder to review your compensation practices and ensure your commission structures comply with the NJWPL.
If you have any questions, please contact our office to schedule a confidential consultation to discuss your situation with one of our experienced employment lawyers.
Sharon M. Flynn, Esq., is a partner with Gebhardt & Kiefer, P.C., and practices primarily in the areas of general litigation, employment law, and insurance defense.
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Any statements made herein are solely for informational purposes only and should not be relied upon or construed as legal advice.