Commission Payment Plans for Inside and Outside Salespeople Under the Massachusetts Wage Act
Determining if your commission payment plan complies with Massachusetts laws for payment of inside and outside salespeople in Pittsfield, Worcester, Springfield, Fall River, Lowell, New Bedford, and the Cape.
The Massachusetts Wage Act applies to commission payment plans. That part is clear. What is less clear is whether the payment at issue is a commission or something else, say a bonus. If it’s a bonus, the Massachsuetts Wage does not apply. If it’s a commission, it does. Employees want the Massachusetts Wage Act to apply because that allows them to recover triple damages, attorneys’ fees, interest and costs for violations.
what is the difference between a commission and a bonus under MASSACHUSETTS law?
Payments are commissions and not bonuses when they can be ‘definitely determined’ and are ‘due and payable.’ Commissions and bonuses are ‘definitely determinable’ when you can apply a formula to determine their value. Say for example, a plan that pays someone 5% of sales they generate over $100,000. If that person sells $200,000, you can calculate their payment as $5000 (5% of 100,000). Payments are “due and payable,” when the employee has completed all conditions on his or her right to receive the payment.
what happens under the massachusetts wage act if my employer does not pay me my commission?
Assuming the payment is a ‘commission’ (see above), you are entitled to triple damages, attorneys’ fees, and interest when your employer fails to pay you earned commissions.
Are you a Massachusetts employee wondering if your commission plan complies with Massachusetts law regarding the payment of commissions? Click below to speak with an employment attorney today.
