Last year, the Appellate Division of the Massachusetts District Court held in Nunez v. Syncsort Incorporated—a decision that we addressed in an article published on October 28, 2024—that retention bonuses do not constitute “wages” within the meaning of the Massachusetts Wage Act.

On October 22, 2025, in a significant win for employers, the Massachusetts Supreme Judicial Court (SJC) issued a decision affirming the Appellate Division’s holding, thus confirming that retention bonuses are not subject to the Wage Act and its penalty provisions requiring treble damages and attorneys’ fees for violations.

• On October 22, 2025, the Massachusetts Supreme Judicial Court concluded that a retention bonus is not a “wage” for purposes of the Massachusetts Wage Act, and that such bonuses are instead a form of additional, contingent compensation outside the ambit of the Wage Act.
• The court reasoned that the purpose of a retention agreement is to benefit the employer by securing the services of an employee through a date that is of importance to the company, while compensating the employee for accepting the risk of being let go during a period of corporate transition or uncertainty.
• The court explained that retention bonuses should be treated like other types of contingent compensation that are in addition to the compensation an employee receives in exchange for the employee’s labor and services—and that the courts have previously held are outside the ambit of the Wage Act.

Carlos...

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