The Supreme Court of Virginia has issued a significant ruling clarifying the scope of the state’s wage theft statute, Code § 40.1-29. In a split decision, the Court held that the law, which explicitly protects “wages” and “salaries,” does not extend its protections to employee commissions unless explicitly stated. This decision overturns a lower court ruling and delivers a setback to former employees who argued their unpaid sales commissions should have been covered by the stringent penalties of Virginia’s wage theft protections.
The Dispute: Wages vs. Commissions
The case originated with five former employees of JES Construction, L.L.C. (referred to collectively as JES), a foundation repair and remediation company. The defendants, Groundworks Operations, L.L.C., and JES, are affiliated entities. Four of the five plaintiffs were paid exclusively on a commission basis—10% of the gross price of sales they secured. The fifth employee received a mix of commissions and other pay.
The core of the dispute centered on when these commissions were earned. JES paid half the commission after a customer’s three-day rescission period expired and the other half upon job completion and final customer payment. The employees alleged that JES often delayed these payments significantly and, crucially, refused to pay commissions owed to four employees after they left the company.
The plaintiffs filed a collective action under Code § 40.1-29, arguing that their earned commissions constituted “wages” under the statute, making the non-payment an act of wage theft.
Lower Courts Clash on Interpretation
The employer initially challenged the suit via a demurrer, asserting that the statute did not cover commissions. The trial court agreed with the employer, finding that the statute’s text did not explicitly mention commissions.
However, the Court of Appeals of Virginia disagreed. It reversed the trial court, holding that the term “wages” should be interpreted broadly to include commissions, citing the remedial purpose of the wage theft law and prior interpretations of “wages” in other legal contexts. This finding prompted the appeal to the Supreme Court of Virginia.
Supreme Court Focuses on Plain Language
Justice Stephen R. McCullough, writing for the majority, framed the issue as one of statutory construction, requiring the Court to determine the General Assembly’s intent based on the text of the law.
The Court emphasized that when interpreting a statute, it must rely on the plain language unless that language is ambiguous or leads to an absurd result. In common usage, the majority noted, “wages” (compensation for hours worked or piece work) are conceptually distinct from “commissions” (payments based on a percentage of sales).
The Court pointed to dictionary definitions, where “wages” ordinarily imply payment for time or quantity produced, while commissions are explicitly defined as fees for a transaction.
“A plain language reading of the statute, therefore, suggests that the General Assembly did not intend to include commissions in the statute, because the word is not in the statute,” the opinion stated.
Pattern of Specificity Across Virginia Code
The majority bolstered its conclusion by reviewing other sections of the Virginia Code. They observed that in numerous other statutes—covering areas like consumer finance, child support guidelines, unemployment compensation, and homestead exemptions—the General Assembly frequently uses the terms “wages,” “salaries,” and “commissions” together or separately.
This consistent practice of explicitly including “commissions” when the legislature intends to cover them elsewhere in the Code strongly suggests that their omission from the wage theft statute (§ 40.1-29) was intentional. The Court cited precedent holding that when the legislature uses specific language in one statute but omits it in a similar one, the difference in language is presumed to be deliberate.
Furthermore, the Court found that the context within Title 40.1 itself supported this narrow reading. While the definition of “employee” in Code § 40.1-2 lists “wages, salaries, or commissions,” the specific wage theft statute (§ 40.1-29) only mentions “wages” and “salaries.” If the legislature intended “wages” to cover everything, mentioning “salaries” specifically would be redundant, which courts generally avoid assuming.
Rejection of Policy Arguments and Agency Deference
The plaintiffs argued that the statute is remedial and should be interpreted liberally. The Court acknowledged this canon but countered that Code § 40.1-29 also contains criminal prohibitions, which must be strictly construed. These conflicting canons, the Court suggested, offset each other.
The plaintiffs also urged the Court to defer to a 2022 Field Operations Manual from the Virginia Department of Labor and Industry, which interpreted the law to include commissions. The Court declined, asserting that interpreting the statute involves a “pure question of statutory interpretation,” which is a judicial function, not an area of specialized agency competence.
Ultimately, the Supreme Court held that incorporating “commissions” into the statute would require adding language the legislature chose not to use. Policy arguments for including commissions, the Court noted, are best directed toward the General Assembly, not the judiciary.
Dissent Argues for Historical Breadth
Chief Justice Goodwyn, joined by Justice Mann, filed a dissent, arguing that the plain and ordinary meaning of “wages” has historically been broad enough to encompass commissions.
The dissent referenced historical dictionary definitions dating back to the late 19th century, including an 1889 Virginia Supreme Court case defining wages as “compensation given to a hired person for his or her services.” The dissent noted that several dictionary definitions cited by the majority explicitly included commissions after a bullet point separator, signifying that while commissions are distinct, they are often understood to be part of the broader remuneration structure.
The dissenting justices argued that when four of five employees were paid *exclusively* by commission, those payments were clearly compensation for work produced, fitting the common thread of all wage definitions. They concluded that the legislature likely understood “wages” in its established, broad sense when drafting the law.
Despite the dissent, the majority’s ruling stands: the judgment of the Court of Appeals is reversed, confirming that Virginia’s wage theft statute does not apply to commissions.