Navigating Commission Payments and Timing Under Massachusetts Wage Act
Does Monthly or Quarterly Payment of Commissions Violate the Wage Act?Understanding the intricacies of commission payments under the Massachusetts Wage Act is crucial for both employers and employees. Recent legal developments, particularly the 2022 Reuter v. Methuen decision, have brought attention to the timing of commission payments and their potential implications.
The Wage Act and Commission TimingThe Massachusetts Wage Act explicitly includes commissions, specifying that they fall under its purview when "definitely determined and due and payable to such employee." Courts have clarified that a commission is deemed "due and payable" when all conditions for earning it have been met, and its amount is arithmetically determinable.
While hourly wages or salary payments are subject to clear timelines (weekly or bi-weekly, within 6 days of the prior pay period), commissions often follow different schedules. Monthly, quarterly, or even annual payments are not uncommon, presenting a departure from the rigid timing requirements imposed on regular wages. Historical Perspective on Late Commission PaymentsHistorically, the timeliness of commission payments did not receive significant scrutiny, assuming that eventual payment would mitigate potential damages. However, the 2022 Reuter v. Methuen decision altered this landscape by asserting that late payment at termination triggers triple damages, regardless of when the wages are ultimately settled.
Implications for Commission Late PaymentsWhile Reuter focused on vacation pay at termination, the same legal analysis could feasibly apply to chronically late commission payments. If commissions are indeed considered wages and are consistently paid beyond the Wage Act's strict timing limits, the potential ramifications—especially in terms of "late penalty" payments—could be substantial, encompassing months or even years of overdue commissions.
ConclusionIn navigating commission payments and timing compliance, both employers and employees should be attuned to the evolving legal landscape. The Reuter v. Methuen decision underscores the importance of timely commission payments, signaling potential consequences for chronic delays. Staying informed and aligning commission practices with legal requirements is essential in fostering a fair and legally compliant workplace.
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Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as a Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year. She has written a book on employment law: Rules of the Road, What You Need to Know About Employment Laws in Massachusetts, and helped thousands of clients on both the employee and employer side with issues relating to wage and hour laws, including overtime pay, late or unpaid wages or commissions, employee misclassification, and retaliation against employees asserting rights under the wage and hour laws.
Rebecca Rogers: Rebecca is a 2006 graduate of Boston College Law School, and has worked with slnlaw since 2013. She previously worked as an intellectual property litigation attorney for Fish & Richardson in Boston, Massachusetts, and clerked for the Massachusetts Supreme Judicial Court. Rebecca has helped clients with wage and hour disputes, including employee misclassification, late or unpaid wages or commissions, retaliation under the Wage Act, and advice to both employees and employers about wage and hour law compliance.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna has helped clients assess their rights under the wage and hour laws, including employee misclassification, untimely payment of final wages, late or unpaid commissions, retaliation, and advice to small business owners about wage and hour law compliance.
Elijah Bresley: Eli is a 2014 graduate of Seton Hall Law school, and has worked with slnlaw since 2020. He previously worked for a boutique employment law firm outside of Boston, and then for the Labor and Employment department of a large Boston firm. He also spent a year clerking for the judges of the Superior Court in Hartford, Connecticut. Eli has helped clients with wage and hour claims, including late or unpaid commissions, retaliation, employee misclassification, and overtime, and litigated these claims in state and federal courts. He also advises employers about employment policies and wage and hour compliance.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped clients with multiple wage and hour issues, including retaliation, misclassification, and late or unpaid wages or commissions, and litigated these claims in state and federal courts.
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Empower your understanding of commission payment intricacies with our insights. Whether you're an employer navigating compliance or an employee seeking clarity on your rights, we provide guidance to align with the latest legal developments. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
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