In general, all listed companies must maintain a written claw back policy for the recoupment of certain compensation awarded to executive officers. Some of the specific terms of the executive summary include:

• The claw back policy is triggered when an accounting restatement corrects a material error in a previous financial statement
• The policy applies to incentive-based compensation granted within the preceding three years of the accounting restatement
• Fault or lack thereof is irrelevant to the implementation of the clause

Under the proposal, the claw back clause must contain the following elements:

• Description of the specific type of restatement that triggers the claw back clause;
• Definition of what “incentive-based compensation” is subject to recovery under the claw back clause;
• Statement of the specific time period covered in relation to when the compensation was received by the executive officer;
• Explanation regarding who is covered under the clause;
• Explanation about the amount of recovery authorized under the clause; and
• Statement that recoupment is mandatory unless it is “impracticable.” meaning that the cost of recovering exceeds the total amount of recovered compensation.

For questions about this proposed regulation and possible implications for your company, contact our office to speak with an attorney.

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.”