Are Commissions Wages Under the Massachusetts Wage Act?
If you are paid incentive pay based on your individual contribution to revenue (i.e., sales or revenue received from your services), this incentive pay should be considered a commission, not a bonus.
If it is a commission, it is considered wages under the Wage Act as soon as it is earned. When commissions are earned can be modified by an employer through its commission policy. For example, the policy may state that the commission is not earned until money is received from the customer, or until the product is delivered or the services provided. The default if there is no policy is that a commission is earned when the agreement to purchase is finalized.
Though the employer can control by policy or contract what event triggers the commission being earned, they cannot by policy or contract redefine something that is a commission under the law to a bonus or some other form of payment that is not governed by the Massachusetts Wage Act.
Learn more here about commission pay under the Massachusetts Wage Act.
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