Ame Management Group

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Commission Agreements Must Be In Writing By 2013 (AB 1396)

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Did you know that as of January 1, 2013, all commission agreements with California employees must be in writing, signed by the employee, and must set forth how commissions are calculated and paid? The employer must also obtain a signed confirmation of receipt of the agreement. Bonus and profit sharing plans are not covered by the new law  unless “there has been an offer by the employer to pay a fixed percentage of sales or profits as compensation for work to be performed.” Upon expiration of a written commission plan, the terms are presumed to remain in effect until a new written plan is executed. Employers should review their employment agreements with all employees who are compensated on a commission basis to ensure the required level of detail is included. Additionally, employers must be sure to keep a signed confirmation of all such commission agreements in their employees’ personnel files.  Don’t be out of compliance with the law.  If you need help call us at 301-298-5543 today.

Author: Sheri M. Green

Mrs. Green is the Founder and CEO of Ame Management Group and has over 20 years’ experience in Human Resources, Recruiting, Operational & Financial Management including 12 years in Chief of Staff and Director roles. She has extensive experience successfully managing departments of up to 35 people and implementing multi-layer projects on time and within budgets of over $30M. Sheri has Masters Certificate in Project Management and Organizational Development and is certified in Strategic Planning and Identifying Corporate Risk.

One thought on “Commission Agreements Must Be In Writing By 2013 (AB 1396)

  1. Very good to know.

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