New Jersey Employers Paying Commissions: What the Musker v. Suuchi Decision Really Means

What the Musker v. Suuchi Decision Really Means

Issued March 17, 2025, the New Jersey Supreme Court’s decision in Musker v. Suuchi, Inc. is one of the most consequential wage rulings in recent years. It confirms that commissions earned by employees for labor or services rendered are legally classified as “wages” under New Jersey’s Wage Payment Law (N.J.S.A. 34:11-4.1 et seq.). This holding has far-reaching implications for any business operating with a commission-based compensation model—whether in sales, brokerage, recruiting, or otherwise.

Employers can no longer treat commissions as peripheral or discretionary payments. If a worker earns a commission based on work already performed, the employer must treat that compensation as a protected wage—with all the statutory consequences that follow.

Background: The Musker v. Suuchi, Inc. Case

Rosalyn Musker worked as a sales representative for Suuchi, Inc., a technology company selling software subscriptions to apparel manufacturers. During the early months of the COVID-19 pandemic, Suuchi pivoted its business to sell personal protective equipment (PPE). Musker generated over $34 million in gross PPE sales and was promised commission compensation on those sales.

A dispute arose over how her commissions should be calculated. Suuchi argued that commissions on PPE sales were “supplementary incentives”—not wages—and therefore not subject to the Wage Payment Law. Both the trial court and Appellate Division agreed, treating the commissions as discretionary.

The New Jersey Supreme Court unanimously reversed. The Court held that commissions earned from labor or services are “wages” under the statute. The fact that the product sold was temporary (PPE) or that the commissions were subject to internal calculations was irrelevant. What mattered was that Musker performed work, and the commissions were tied to that work. Therefore, payment was required under the WPL.

Key Holding: Commissions Are Wages, Not Bonuses

The Court drew a clear line between commissions and discretionary payments. Wages are earned when the employee performs the work giving rise to compensation. Employers may not recharacterize commissions as incentives or bonuses to avoid their obligations. So long as the commission is connected to labor or services rendered, it is a wage.

This classification triggers all of the protections of the Wage Payment Law, including:

• Required payment on regular paydays;

• Prohibition on unlawful deductions;

• Liquidated damages (up to 200% of unpaid wages);

• Attorneys’ fees and costs for successful claimants;

• Potential criminal liability for willful nonpayment.

Real-World Examples of Employer Exposure

The Musker decision does not simply alter legal definitions—it creates practical risks for employers. Below are common situations that could now expose employers to claims:

1. Disputes Over When a Commission is “Earned”If an employer’s commission plan is unclear about when a commission becomes payable—whether upon contract signing, invoicing, client payment, or delivery—the employee may claim it was earned earlier. Courts will resolve ambiguity in favor of the worker. Vague terms now carry legal risk.

2. Failure to Pay Commissions After TerminationMany plans attempt to limit commission payments after an employee is terminated. If the labor generating the commission occurred before termination, that commission is still a wage and must be paid. Employers cannot contract around that obligation.

3. Retroactive Deductions or ChargebacksEmployers often reduce commissions retroactively due to customer cancellations, returns, or bad debt. Unless the commission plan expressly authorizes such deductions and complies with WPL requirements, they may be unlawful. The statute strictly limits when deductions from wages can occur.

4. Misclassification of Workers as Independent ContractorsCommissioned workers are sometimes improperly classified as independent contractors. If later reclassified as employees, all prior commissions become subject to the WPL. That can result in substantial retroactive wage liability, including penalties.

5. Delayed Commission Payments for Internal ProcessingSome companies hold earned commissions until internal processes are complete. After Musker, delayed payments—even for legitimate administrative reasons—may violate the law. Commissions must be paid on time and in full unless the plan expressly provides otherwise in a legally valid manner.

6. Poorly Written or Inconsistent Commission PlansWhere one employee is paid on gross revenue and another on net profit without clear documentation, the employer opens the door to contract disputes and discrimination claims. The Court made clear that internal characterizations carry no weight unless reflected in enforceable agreements.

Practical Guidance for Employers

In light of the Court’s ruling, every New Jersey employer using commission-based pay must take immediate and deliberate action:

Clarify When Commissions Are Earned. Employers must specify in writing exactly what events trigger commission entitlement—such as order acceptance, shipment, full payment, or other criteria. Ambiguity will now be resolved in favor of employees.

Update Employment and Commission Agreements. Every commissioned employee should have a signed agreement that defines how commissions are calculated, when they vest, and how disputes are resolved. Any deduction provisions must be WPL-compliant.

Audit Classification of Commission-Based Workers. If your business treats commissioned salespeople or agents as independent contractors, you must reassess that classification. The penalties for misclassification are severe, particularly when commissions are involved.

Pay Earned Commissions on Time. Delays for internal approval or payment collection may violate the Wage Payment Law. If commissions have been earned based on the terms of the plan, they must be paid on the next scheduled payday.

Avoid “Discretionary” Labels Without Legal Basis. Simply calling something a bonus or incentive will not shield it from WPL liability if it arises from labor performed. Labels mean little; substance controls.

Conclusion

Musker v. Suuchi, Inc. is a warning to every New Jersey employer relying on commission-based compensation. If a commission is earned from work performed, it is a wage. It must be paid, documented, and treated with the same seriousness as hourly or salaried wages.

Ignoring this ruling, or failing to update existing agreements, creates exposure not only for back pay but also for litigation, statutory penalties, and legal fees. Employers must act now to ensure compliance.

For more information about how this decision may affect your compensation practices, or to schedule a consultation, please contact the Law Offices of Peter J. Lamont at www.pjlesq.com, call 201-904-2211, or email info@pjlesq.com.

Contact us today to discuss your business or legal matter. Put our 20+ years of legal experience to work for you.

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For detailed insights and legal assistance on topics discussed in this post, including litigation, contact the Law Offices of Peter J. Lamont at our Bergen County Office. We're here to answer your questions and provide legal advice. Contact us at (201) 904-2211 or email us at  info@pjlesq.com.

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About Peter J. Lamont, Esq.

Peter J. Lamont is a nationally recognized attorney with significant experience in business, contract, litigation, and real estate law. With over two decades of legal practice, he has represented a wide array of businesses, including large international corporations. Peter is known for his practical legal and business advice, prioritizing efficient and cost-effective solutions for his clients.

Peter has an Avvo 10.0 Rating and has been acknowledged as one of America's Most Honored Lawyers since 2011. 201 Magazine and Lawyers of Distinction have also recognized him for being one of the top business and litigation attorneys in New Jersey. His commitment to his clients and the legal community is further evidenced by his active role as a speaker, lecturer, and published author in various legal and business publications.

As the founder of the Law Offices of Peter J. Lamont, Peter brings his Wall Street experience and client-focused approach to New Jersey, offering personalized legal services that align with each client's unique needs and goals​.

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