Commission Agreements – Legal Requirements

Effective January 1, 2013, California Labor Code section 2751 requires the following:

If an employer enters into a contract with its employee for services to be rendered and the method of payment involves commissions, the contract shall:

(1)   be in writing, and

(2)   set forth a method by which the commissions shall be computed and paid.

In addition, an employer is required to provide a signed copy of the contract to the employee and the employee must sign an acknowledgement of receipt of the contract.

Section 2751 also provides that “In the case of a contract that expires and where the parties nevertheless continue to work under the terms of the expired contract, the contract terms are presumed to remain in full force and effect until the contract is superseded or employment is terminated by either party.” 

Call me now at (619) 265-0081 to schedule an appointment to review your commission agreement(s).