Not Every ‘Commission’ Is a Wage: Massachusetts Superior Court Holds Revenue-Based Pay Falls Outside the Wage Act

The court also held that a vice president and “co-founder” of the employer could not be held personally liable under the Wage Act because she lacked control over company finances or payroll. The decision gives Massachusetts employers new support for the position that not every payment labeled a “commission” is a protected wage, and reinforces that the substance of a compensation arrangement, not its label, controls.

Background

Under the terms of Brinkley’s written employment agreement, Brinkley would receive an annual salary of $130,000, plus a commission in the amount of “1.375% of revenue calculated and paid quarterly.” On September 22, 2022, Meenta terminated her employment, informing her that her termination was part of a reduction in force. Brinkley received no payment on the day of her termination.

At some point, Meenta made a partial payment to Brinkley of $9,166.67, but an undated message between two Meenta executives stated that Brinkley’s commissions due for Q1 and Q2 of 2021 were $90,131.05 and $30,906.46, respectively. Brinkley sued Meenta; Smith, Meenta’s co-founder and CTO; and Ah-Tye, Meenta’s co-founder and vice president, alleging violations of the Wage Act, and the defendants moved for summary judgment.

Analysis and Outcome

The court framed two questions: (1) whether the unpaid commissions were “wages” under the Wage Act, and (2) whether Smith and Ah-Tye were “agents having the management of the corporation” who could therefore be held personally liable under the Wage Act.

Revenue-sharing pay is not a commission.

Commissions are the only form of contingent pay that expressly receive the protections of the Wage Act. However, commissions qualify as wages only in certain circumstances. Under Massachusetts case law, payments based on the sales or revenue an individual employee generates are typically commissions, while payments based on a percentage of a business’ overall performance are not. The court found nothing in the record tying Brinkley’s “commission” payments to revenue generated by her own efforts. Indeed, Brinkley herself testified that she “got paid based on the amount of revenue that the company made.”

The court rejected Brinkley’s argument that pay tied to company-wide “revenue,” rather than “profits,” should be treated differently. The key distinction, the court explained, is that pay calculated as a percentage of an organization’s economic performance is not a commission, whereas pay reflecting an individual’s own financial productivity is. The court also rejected Brinkley’s argument that her personal contribution to Meenta’s overall performance was sufficient, noting that the same could be said of virtually every employee. The court added that the 1.375% payment was more naturally treated as a bonus, which is generally not covered by the Wage Act, and that the parties’ use of the word “commission” did not control.

Because the payments were not protected wages, it did not matter that a Meenta executive had calculated specific amounts owed. The “definitely determined” and “due and payable” requirements under the Wage Act matter only if the payment is a protected commission in the first place. 

No personal liability for Ah-Tye.

As a second and independent ground, the court held that Ah-Tye was not personally liable. The Wage Act extends liability to a corporation’s president, treasurer, and officers or agents “having the management” of the corporation, which the Supreme Judicial Court has read to require significant management responsibilities similar to those of a president or treasurer, particularly over finances or wages. It was undisputed that Ah-Tye never controlled Meenta’s bank accounts, credit cards, accounts payable or receivable, or payroll. Her hiring role, supervision of the product team, “co-founder” title, and involvement in leadership projects and 2022 layoff decisions may have demonstrated operational management but fell short of the far-reaching powers of a president, treasurer, or someone with “the management” of the corporation, as the Wage Act requires.

Why It Matters

The Wage Act imposes mandatory treble damages and attorneys’ fees, and it extends personal liability to certain individual officers, so whether a payment qualifies as a protected “wage” often determines the stakes of a compensation dispute. In Massachusetts, the decision confirms that the line between a protected commission and an unprotected bonus or profit-sharing payment turns on whether the payment is tied to the employee’s own sales or revenue generation, not on what the parties call it. 

The ruling has limits, however. It is a Superior Court decision, not binding appellate authority, and its outcome turned on a thin record: There was no evidence tying the payments to Brinkley’s individual efforts, and little evidence of what her role involved. Employees whose pay is expressly linked to their own book of business or sales results may face a different analysis, and employers should not assume that labeling a payment a “bonus” will take it outside the statute. On individual liability, the decision is consistent with Supreme Judicial Court precedent requiring control over finances or payroll and confirms that a senior title or departmental authority is not sufficient on its own.