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In Sutula-Johnson v. Office Depot, No. 17-1855, 2018 WL 3098960 (7th Cir. June 25, 2018), the Seventh Circuit revisited the issue of an employer’s requirements for payments of bonuses and commissions under the Illinois Wage Payment and Collection Act (820 ILCS 115/1).

Employee Daryl Sutula Johnson worked as a salesperson at Office Depot’s furniture department and originally had been paid commissions on a monthly basis. In 2014, Office Depot changed the plan and Daryl began receiving a salary and “incentive” pay. The incentive pay was paid quarterly and contingent on a sales target. The incentive payments accrued when the customer was invoiced, but the employee did not earn the payment until it was made to him or her. Office Depot did not pay incentives to employees leaving the company because the interest in the payment had not vested until the day it was paid. Sutula-Johnson brought suit against Office Depot on breach of contract and violations of the Wage Act.

The Illinois Wage Act requires employers pay commissions once a month and that all bonuses and commissions be paid to employees as final compensation if they separate from employment. The Seventh Circuit found that the Office Depot’s incentive payments were commissions rather than bonuses and as a result, Office Depot was found to be in violation of the Wage Act because it did not pay the commission/incentive on a monthly basis. Further, the Seventh Circuit stated that “employers cannot undermine the monthly payment requirement by imposing an arbitrary date on which wages are earned, completely unrelated to the employee’s duties.”  Throughout the opinion, the Court referred to earned wages as commissions, bonuses and vacation days, helpful guidance for employers.

SutulaJohnson v Office Depot Inc