Overview
- The Supreme Judicial Court ruled on Oct. 22, 2025, that retention bonuses tied to continued employment and performance are not wages under the Massachusetts Wage Act.
- Justice Gabrielle Wolohojian wrote that the payments were additional contingent compensation not made solely in exchange for labor or services.
- Chief Justice Kimberly Budd concurred that the analysis turns on function, noting the bonus was in addition to the employee’s regular salary.
- Because such bonuses are not wages, employers are not required to pay them on an employee’s termination date and Wage Act treble damages do not apply.
- In the Nunez case, the $15,000 bonus was split into two tranches and the second was paid eight days after termination, and the court contrasted these bonuses with commissions and other categories previously excluded from the Act.