Virginia Supreme Court Rules Wage Theft Statute Does Not Cover Commissions: What Employers Need to Know

Businesses across Virginia that rely on commission-based compensation now have important clarity from the Virginia Supreme Court. In a recent ruling, the Court held that the Commonwealth’s wage theft statute does not apply to commissions. This decision significantly affects how employers should understand their obligations when paying commission-based employees, and potential liability when disputes about those payments arise.

Understanding Virginia’s Wage Theft Statute

Virginia’s wage theft law, found in Virginia Code § 40.1-29, provides protections for employees whose  “wages or salaries” are withheld by their employers. The statute carries significant penalties for violations that can include civil fines, liquidated damages, treble damages for knowing violations, interest, attorney fees and costs, and even potential criminal liability.

Because these remedies are substantial, determining what counts as “wages” under the statute is a critical issue for employers.

Groundworks Operations, LLC v. Campbell and the Scope of “Wages”

The key holding of Groundworks Operations, LLC v. Campbell is straightforward. The Virginia Supreme Court concluded that “wages and salaries” in Virginia Code § 40.1-29 does not include commissions. This reversed an earlier Court of Appeals decision and narrows the reach of the statute.

The Court grounded its analysis entirely in the established canons of statutory construction, focusing on the plain language the General Assembly chose to include in the statute. Across various statutes of the Virginia Code, the General Assembly lists wages, salaries, and commissions as separate categories of compensation. The Court reasoned that these statutes show that when lawmakers intend to cover commissions, they expressly use that term. Because Virginia Code § 40.1-29 references only wages and salaries, the Court concluded that commissions were intentionally excluded from the wage theft statute.

What This Decision Means for Employers

The ruling is significant for employers that rely on commissions to compensate sales teams, service representatives, or other revenue generating employees. Because commissions are outside the scope of the wage theft statute, disputes about unpaid commissions are now governed solely by contract law, and employers are no longer exposed to the statute’s various damages and criminal liability provisions related to commission disputes.

Strong Commission Agreements are Imperative

Although the ruling limits exposure under § 40.1-29, it also reinforces the importance of well drafted written commission agreements. Employers should ensure that their commission plans clearly define:

• When a commission is earned
• When it becomes payable
• What happens to commissions after an employee’s separation
• Any conditions tied to revenue collection or job completion

Clear terms reduce the chances of litigation and help ensure consistent administration.

The Groundworks Decision Stands, for Now

In Groundworks, the Supreme Court opined that whether commissions should fall under Code § 40.1-29 is a policy question best addressed by the General Assembly. In a seeming response, House Bill 1355 was introduced with the specific intent of reversing the Court’s decision. However, as of February 18, 2026, HB1355 was left in committee, meaning Groundworks remains the law for at least another legislative cycle. Whether lawmakers take up the Supreme Court’s invitation to address this gap in a future legislative session remains to be seen.

Bottom Line for Employers

For now, employers can structure and administer commission plans knowing that Code § 40.1-29 does not apply to commissions. This clarity allows businesses to focus on well-crafted agreements and consistent practices to prevent disputes and maintain compliance with the statute as it applies to wages and salaries.

If you have any questions regarding employment law, please contact a member of our Labor & Employment Team.

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