Are Bonuses or Commissions Considered Wages?
Commissions are considered wages under the Wage Act, but bonuses are not.
The difference is not based on what you call the incentive pay. Instead, is based on whether the incentive pay is tied to an employee's individual contribution to revenue, such as sales. In that case, it will be considered a commission and subject to the same rules about timely payment and payment at termination as regular wages or salary.
A bonus, in contrast, is either a discretionary amount paid by the employer, or an incentive payment based on the performance of the company or a division or department as a whole. Year end bonuses and profit sharing payments are examples of payments considered bonuses. These are not subject to the requirements of the Wage Act.
Learn more here about payment of commissions under the Massachusetts Wage Act.
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