This post was updated on September 2, 2025
Whether a certain type of pay is covered by the Massachusetts Weekly Payment of Wages Act (“Wage Act”) has meaningful consequences. If a category of unpaid compensation is covered by the Wage Act, an employee is entitled to three times the amount of unpaid wages, attorneys’ fees, and costs. Over the last decade, there has been controversy over whether commissions and bonuses are covered under the Wage Act, and Massachusetts courts have issued several rulings both in favor of and against employees on this topic.
In Okerman v. VA Software Corp., 69 Mass. App. Ct. 771 (2007), the panel held that commissions were covered by the Wage Act as long as they were “definitely determined” and “due and payable,” as set forth in the statute’s plain language. The panel further tightened the noose on employers who failed to pay employees’ wages, limiting their ability to be clever with commission calculations. The panel made it clear that the “definitely determined” requirement was satisfied as long as commissions were “arithmetically determinable.”
Notwithstanding this decision, commissions will continue to be a fruitful area of controversy due to the many scenarios that can arise in the context. One such controversy arose when a plaintiff was retaliatorily terminated before being compensated for an earned commission. The SJC held that the plaintiff’s commission was covered as wages under the Wage Act in Parker v. EnerNOC, Inc., 484 Mass. 128 (2020). The SJC reasoned, “although the plaintiff’s commission never became due and payable pursuant to the policy during her employment, it is, nevertheless, a ‘lost wage’ under the act subject to trebling.” This case also clarified that “[w]ages lost as a result of retaliation are trebled under the Wage Act.” Other specific situations dealing with commissions will inevitably continue to arise. Some of these potential cases may hinge on the employer’s intent and surrounding circumstances – and a former employee might have a claim under the implied covenant of good faith and fair dealing. However, such common law claims often lack a critical component: the fee-shifting and multiple damages provisions that make Wage Act claims far more compelling.
As of 2025, Okerman remains good law and has been cited multiple times in the years following its publication, both by the SJC and the 1st Circuit Court of Appeals. See, Lipsitt v. Plaud, 466 Mass. 240 (2013); Trindade v. Grove Servs., 91 F.4th 486 (2024).
In the aftermath of the Okerman decision, some employers began reclassifying commissions as bonuses in an effort to avoid the requirements of the Massachusetts Wage Act. In 2011, the Massachusetts Superior Court held in Juergens v. MicroGroup that the Wage Act even covered severance pay. While this interpretation was controversial, it aligned with the broader reading of “wages” adopted in the Supreme Judicial Court’s decision in Wiedmann v. Bradford Group, Inc., 444 Mass. 698 (2000).
However, following Juergens, other lower Massachusetts courts have issued rulings finding that severance pay is not covered by the Wage Act. In Platt v. Traber, 85 Mass. App. Ct. 1114 (2014), the panel held the plaintiff’s severance agreement did not fall under the Wage Act. The Middlesex County Superior Court agreed, echoing prior cases that “[a] plain reading of the statute reveals that the quoted statutory terms refer solely to commissions,” finding that the Wage Act does not cover severance pay when the court dismissed the complaint in Farrell v. Farrell, 29 Mass. L. Rep. 557 (2012).
In the following years, Massachusetts courts hav5348620
e surprisingly shown a willingness to find that bonuses are not covered under the Wage Act. While commissions are explicitly included in the Wage Act coverage, bonus pay is not. As bonus pay is based on definable metrics, it shares much in common with commission compensation. In fact, bonuses are usually tied to sales, often of a business unit or entire company. When this is the case, a bonus is just as arithmetically determinable as a commission, and it constitutes part of the employee’s total expected pay. It would make little sense to treat mathematically calculable incentive pay differently based on the name given to it. However, a Massachusetts Appeals Court in 2011 decided a Wage Act case that has been used by employers to claim that bonus pay is excluded from the Act.
In the case of Suominen v. Goodman Industrial Equities, 78 Mass. App. Ct. 723 (2011), the plaintiff was a former construction manager of a small real estate development entity and was promised a share of “overall profits generated by the development efforts.” The plaintiff argued that this compensation was a commission under the Wage Act. The panel disagreed, stating that it was, in their view, different than a typical sales commission because it was a “profit-sharing arrangement.” Since most bonuses can be cast as profit-sharing arrangements (though varying widely in scale), this decision leaves many questions. It’s important to note, however, that Suominen involved compensation based on an entity-level transaction. Sales commissions and performance bonuses are normally based on the business’ sales and not a sale of the business itself.
I expected defendants would use the Suominen case to avoid Wage Act liability for unpaid bonuses, which has proven to be true. Massachusetts courts have characterized the decision as ruling that bonuses are not wages under the Wage Act. While the courts have continued to find that profit-sharing schemes are not applicable to the Wage Act, Suominen appears to create a minor loophole for commissions to be repackaged as bonuses.
After having more opportunities to address bonuses, the Appeals Court has shown a willingness to find that bonuses, even those with questionable terms, are not covered by the Wage Act. In 2019, the Massachusetts Appeals Court found that an unfulfilled stock agreement was considered a bonus and not wages despite the agreement being tied to performance. O’Connor v. Kadrmas, 96 Mass. App. Ct. 273 (2019). The court found that these were “profit distributions to shareholders;” because of the “highly contingent” and “discretionary” nature, the court determined the stock agreement was not wages. Similarly in 2021, a summary decision by the Appeals Court found that a bonus only granted if the employee met certain working requirements was not wages under the Wage Act. Alfieri v. Merrimack Pharms., 99 Mass. App. Ct. 1119 (2021). Alfieri characterized O’Connor with the finding that a compensation “can be neither discretionary or contingent” to be deemed wages under the Wage Act. This context appears to blur the lines between commissions and bonuses.
While Massachusetts courts have continued to affirm that commissions are deemed wages, the court has signaled that there is more to say on the matter. The SJC said in 2020 that “[in the earlier rule on commissions], we did not announce a categorical rule that commissions that do not meet those conditions are considered not to be wages under the act; instead, the clause provides that the failure to pay commissions when they are definitely determined and due and payable is one way to violate the act.” Parker (2020). In this way, the SJC has made room for further clarification regarding what a wage is under the Wage Act. Hopefully, this indicates the SJC will be willing to expand the definition of wages in years to come.
Timing issues will continue to complicate bonus and commission cases. I expect to see more litigation on the issue of when an employee earns incentive pay.