The Wage Act is applicable to 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 order to be ‘definitely determined,’ a commission must be ‘arithmetically determinable.  In order to be ‘due and payable,’ any contingencies relating to the entitlement to the commission must have occurred.’  Importantly, the Wage Act also, prohibits employers from entering into a ‘special contract’ with an employee to exempt the employee from the protections of the act.

While many lower courts have been asked to determine whether these commission agreements that condition payment of commissions on continued employment violate the special contract provision of the Wage Act, the Supreme Judicial Court (“SJC”) has recently issued some guidance to employers. Terminated employees may.

On February 12, 2020, the SJC issued a ruling in Parker v. EnerNOC, Inc., 484 Mass. 128 (2020).  In this case the court was asked to determine whether the Defendant’s “true-up” commission policy, whereby the salesperson would receive an additional commission once the contract survived past the opt-out date only if he/she was still employed with the company, was legal.  The SJC ruled that “although the plaintiff’s commission never became due and payable pursuant to the true-up policy during her employment, it is, nevertheless a ‘lost wage’ under the act subject to trebling.”  The court made this ruling because, “[a] policy that conditions payment on continued employment cannot relieve an employer from the obligation of paying a commission where the employer terminates its employee in retaliation for complaining about wage violations in the first place.”

If your commission plan is conditioned on continued employment and you have been terminated or are contemplating changing jobs, please contact us for legal advice.

The Company Defense Failed

The brand argued plan discretion made commissions uncertain. Instead of checking sales facts, it tried to block payment. But courts ask one core question: Did the worker earn the money already? If the answer is yes, the law protects that pay.

McAleer Case Facts

On July 24, 2009, Mr. McAleer lost his job. By that date, he had finished pipeline sales. Normally, the company issued payouts months later. Still, the brand denied every earned sum, not only late payouts.

What the Court Confirmed

The court rejected the company’s argument clearly. Judges explained an important rule. Employers may hold discretion to check facts, confirm eligibility, and verify math. However, they cannot use discretion to block earned wages. Furthermore, the court noted that a plan must give total freedom to award commissions or not, if an employer wants to avoid wage liability. This plan did not grant that power. So, the law protected the worker’s earnings.
✅ Employers can check facts and math
✅ They may confirm eligibility rules
❌ They cannot cancel earned commissions already approved by sales progress

Why This Ruling Matters

This decision protects commission income many families rely on. Missed pay raises stress and breaks financial planning. Reliable wage laws defend earnings workers generate through real sales work. Courts now look deeper, beyond plan clauses, to ensure fair pay systems protect workers.

Quick Test for Commission Drivers and Sales Staff

• Did you finish and get approval for your sales?
• Does the brand track or judge your daily performance?
• Do you follow company rules, territory plans, or pay policies?
• Did the company deny all earned commissions?
If most answers are yes, you likely qualify for employee wage rights instead of contractor exclusions.

Steps Workers Can Take

• Request a pay and commission audit early
• Check plan math and sales approval records
• Get legal advice fast if a company cancels earned pay
• Document discipline, performance reviews, and job control methods
• Ask if wage rules applied to your payout timeline

Final Takeaway

In short, earned commissions are wages. A company cannot block pay you already earned using limited wording about discretion. Fair pay rules stabilize communities and protect weekly income. Acting early, therefore, helps workers avoid financial harm and build long-term income security.

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.”