If your organization labels certain compensation as a “bonus,” could it still be treated as a wage under New Jersey law?
In an article published by the New Jersey Law Journal, authors Brian M. Block and Samantha E. Holleritter explore the often-misunderstood distinction between commissions and bonuses under the New Jersey Wage Payment Law (WPL), a distinction with significant consequences for employers.
As the article explains, while the New Jersey Supreme Court’s 2025 decision in Musker v. Suuchi clarified that commissions qualify as wages, it left unresolved how to distinguish them from bonuses. That question matters: the WPL imposes substantial liability, including unpaid wages, liquidated damages, and attorneys’ fees, when wages are not properly paid.
The key takeaway is that labels do not control. Compensation that is non-discretionary and directly tied to an employee’s labor or services, such as a percentage of sales or payments for meeting specific business targets, will likely be treated as a commission and therefore as wages. By contrast, true bonuses are typically discretionary or not directly tied to an employee’s individual output.
The article emphasizes that many employers blur this line, sometimes mislabeling commissions as bonuses. Given the risks, they encourage employers to carefully review compensation structures to ensure compliance with the WPL.
Read the full article at Commissions Mislabeled as Bonuses Are Wages Under the Wage Payment Law.