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The good news is that there are ways to structure
deferred and incentive compensation that do not violate
the Wage Act, so long as everyone is paid at least
minimum wage on a timely basis, using bonus and profit
sharing instead of a deferred agreed salary. Remember
that getting this wrong can be very costly- it is definitely
worth consulting with an employment lawyer to make
sure your compensation plan is legal.
C. Incentive Compensation
Recall that the Wage Act does apply to
commissions, and does not apply to bonuses, and that
whether something is considered a commission or a
bonus depends on what it actually is, not what it is called.
If you call your plan a “bonus,” for example, but it is
calculated according to sales an employee makes, it is in
all likelihood actually a commission. On the other hand,
69| Rules of the Road
