Massachusetts · commission / incentive overtime
Massachusetts commission overtime (§ 1A / Sullivan)
Under M.G.L. c. 151 § 1A and 454 CMR 27.02, commissions, drawing accounts, bonuses, and sales/production incentive pay are excluded from the regular rate. Overtime after 40 is separate additional pay at 1½× that RR — employers cannot credit commissions against the OT obligation (Sullivan v. Sleepy’s, 482 Mass. 227 (2019)). 100% commission: RR = 2026 MA MW $15; OT = $22.50 × hours over 40. Example: $1,000 / 50h → $1,225 (FLSA half-time would be $1,100). Not PA ÷40. Not CT merch ÷40. Not FLSA 778.117.
How M.G.L. c. 151 § 1A pays
§ 1A requires one and one-half times the employee’s regular rate for hours over 40, and states that “[s]ums paid as commissions, drawing accounts, bonuses, or other incentive pay based on sales or production, shall be excluded in computing the regular rate and the overtime rate.” 454 CMR 27.02 repeats that exclusion; 27.03(3) adds that hourly, piece, salary, or other payments “shall not serve to compensate the employee for any portion of the overtime rate.”
In Sullivan v. Sleepy’s LLC, 482 Mass. 227 (2019), the Supreme Judicial Court held that 100% commission retail sales employees must receive separate and additional overtime at no less than 1½× the Massachusetts minimum wage for hours over 40 — even when commissions already equal or exceed that figure. Commissions cannot be retroactively reallocated to satisfy the OT obligation.
Worked example (commission-only): $1,000 commissions · 50 hours → RR floors at $15 MW; OT = $15 × 1.5 × 10 = $225 additional; total = $1,225. Same punches under FLSA § 778.117 (commissions in RR): RR = $20; half-time = $100; total = $1,100.
$1,000 commissions · five 10h days → RR $15 · OT $225 · total $1,225 (FLSA contrast $1,100).
$18/h + $400 commissions · 50h → RR $18 · half-premium $90 · total $1,390.
$800 salary + $400 commissions · 50h → RR $16 · OT $240 · total $1,440 (PA/CT ÷40 including commissions would be $1,650).
$800 commissions · five 8h days (40h) → no OT · total $800.
Sources
- M.G.L. c. 151 § 1A (FindLaw) — overtime; commissions/draws/bonuses excluded from RR
- M.G.L. c. 151 § 1A (Justia mirror)
- 454 CMR 27 (Mass.gov PDF) — § 27.02 regular hourly rate; § 27.03(3) OT rate / no credit
- Sullivan v. Sleepy’s LLC, 482 Mass. 227 (2019) — separate additional OT for 100% commission employees
- Mass.gov — Massachusetts law about overtime
- Mass.gov — Massachusetts law about minimum wage ($15.00)
FAQ
How is MA commission OT calculated?
Exclude commissions/draws/bonuses from RR. Floor RR at MA MW $15 when nothing else remains. Pay separate OT at 1.5× RR for hours over 40. Example: $1,000 / 50h → $1,225.
Same as FLSA commission overtime?
No. FLSA § 778.117 puts commissions into the regular rate and typically adds half-time. Massachusetts excludes commissions from RR and requires separate OT (Sullivan).
Same as PA or CT salary÷40?
No. Those rules divide remuneration including commissions by 40. Massachusetts excludes commissions from the numerator.
Daily overtime?
No — weekly after 40 only under § 1A.
Who is covered?
Non-exempt employees under § 1A (e.g., inside retail commission sales). Restaurant/hotel and other listed § 1A exemptions, outside sales, and tip-credit service-rate math are out of scope here.
Can commissions satisfy the OT premium?
No. Sullivan and 454 CMR 27.03(3) require separate additional OT; commissions cannot be credited against that obligation.