The Massachusetts Appeals Court has affirmed that all employees who receive commissions as a part of their compensation packages, are entitled to the protections of the Massachusetts Wage Act. The case is Okerman v. VA Software.
According to the plain language of the statute, the Massachusetts Wage Act applies “to the payment of commissions when the amount of such commissions, less allowable or authorized deductions, has been definitely determined and has become due and payable to such employee.”
In 1991, the Massachusetts Appeals Court, in Commonwealth v. Savage, inferred “a Legislative purpose” to apply the commission section of the Massachusetts Wage Act to “employees who would ordinarily be paid on a weekly basis, such as retail salespeople, and for who commissions constitute a significant part of weekly income.”
The Okerman Court clarified the application of the Massachusetts Wage Act with regards to commissions. The Appeals Court held that the Massachusetts Wage Act applies to “executive, administrative or professional employees” and is “not dependent on the amount of an employee’s earnings.” Accordingly, the Massachusetts Wage Act applies to “both highly paid professionals and to lower income wage earners alike.”
It is now clear that all employees are entitled to recover their commissions under the Massachusetts Wage Act, provided that the commissions are “definitely determined” and “due and payable.”.