Commission Agreement Law in California

new california law requires commission based employment contracts to be in writing

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Governor Brown signed AB 1396, which requires that as of January 1, 2013, a commission agreement for services to be provided in California must be in writing.

The writing must set forth the method by which the commissions are to be computed and paid.  An employer is required to give a signed copy of the contract to the employee and obtain a signed receipt for the contract from the employee.

TIP:  Although the AB 1396 does not go into effect until 2013, it is a good practice for employers to enter into a commission-based agreement in writing to ensure that each party clearly understands how commissions will be computed and paid.

If you have any questions regarding this or any of the new California laws that were recently passed, feel free to contact us or call 949.529.0007.

In: Employment Law, New Laws

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