In one of two opinions released today, the Supreme Court of Virginia addresses whether the Commonwealth’s wage theft statute applies to unpaid commissions.
The plaintiffs were former employees of JES Construction who worked primarily on commission, selling construction services. After leaving the company, they alleged JES owed them thousands of dollars in earned but unpaid commissions and filed suit under the wage theft law. The trial court dismissed their claims, holding that the statute did not cover commissions, but the Court of Appeals reversed.
The Supreme Court reversed the Court of Appeals, concluding that commissions are not covered by Code § 40.1-29. Writing for the majority, Justice McCullough emphasized that the statute specifically mentions “wages” and “salaries” but never uses the term “commissions,” despite the General Assembly’s frequent use of all three terms together in numerous other statutes throughout the Virginia Code. The Court found that in common usage, wages and commissions are conceptually distinct. Wages typically refer to compensation based on time worked or quantity produced, while commissions are payments based on a percentage of sales. The majority declined to extend the statute’s meaning based on policy arguments or deference to an administrative agency’s interpretation, stating that such matters are properly addressed to the legislature.
Chief Justice Goodwyn, joined by Justice Mann, dissented. The dissent argued that the plain and ordinary meaning of “wages” has been understood broadly since the nineteenth century to include commissions, citing numerous legal dictionaries and the Court’s own 1889 precedent defining wages as “compensation given to a hired person for his or her services.” The dissent emphasized that commissions paid to employees who work exclusively on commission serve the same compensatory purpose as hourly wages or piecework pay: they are compensation based on the work produced.
A Virginia Appellate Law Blog 