Musker v. Suuchi, Inc.
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Rosalyn Musker worked in sales for Suuchi, Inc., which sells software subscriptions to apparel manufacturers. In addition to her base salary, Musker was eligible for commissions under Suuchi’s Sales Commission Plan (SCP). In March 2020, Suuchi decided to sell Personal Protective Equipment (PPE) on a commission basis due to the COVID-19 pandemic. Musker generated approximately $34,448,900 in gross revenue by selling PPE. The parties disputed whether her 4% commission was based on gross or net revenue and whether these commissions were considered "wages" under the Wage Payment Law (WPL) or excluded as "supplementary incentives."
The trial judge dismissed Musker’s WPL claims, holding that her PPE commissions were not "wages" under the WPL. The Appellate Division affirmed this decision, agreeing that the commissions were "supplementary incentives" and not "wages" under the WPL. Musker appealed the decision.
The Supreme Court of New Jersey reviewed the case. The Court held that under the WPL, "wages" are defined as "direct monetary compensation for labor or services rendered by an employee, where the amount is determined on a time, task, piece, or commission basis." The Court concluded that compensating an employee by paying a "commission" for "labor or services" always constitutes a wage under the WPL. Therefore, a "commission" cannot be excluded from the definition of "wages" as a "supplementary incentive."
The Supreme Court of New Jersey reversed the Appellate Division’s judgment, vacated the trial judge’s order dismissing Musker’s WPL claims, and remanded the case for further proceedings. The Court clarified that Musker’s PPE commissions are "wages" under the WPL, regardless of whether they are based on gross or net revenue, and that receiving a base salary does not turn "commissions" into "supplementary incentives."
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