New California employment laws will be effective as of January 1, 2013. Some of the laws that employers are likely to regularly run into are summarized below. Are you ready?
Commission contracts now must be written, and may survive expiration
Starting January 1, 2013, employers are required to provide commissioned employees with written contracts that set forth the applicable formula for calculating the commissions and method of payment. (AB 1396, AB 2675). The new laws apply to both in-state and out-of-state employers, require that employers provide copies of the signed commission contracts to their employees, and also require that employers obtain signed receipts from the employees for such contracts. Even if a contract governing commissions expires, the terms will “live on” past the contract’s date of expiration until the parties enter into a new agreement or until the employment is terminated.
Action plan: Review your variable compensation contracts to identify those that are commission-based. If the contracts are not spelled out in sufficient detail, prepare compliant agreements to be effective January 1, 2013. Obtain signatures, get receipts and maintain your records. Calendar when existing contracts are set to expire, so that any new terms, if needed, can be added.(more…)