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» Compensation Plans & Program Design
» Written Commission Plans

Written Commission Plans
Required of all CA Employers as of 01/01/13

What is Required?

AB 1396, effective January 1, 2013, requires all employers doing business in California to draft written contracts for any agreements with employees that involve commissions as a method of payment for services.

The new law requires employers who pay employees via commission to:

(1) have a written contract with the employee regarding commissions
(2) include the method for calculating the commissions
(3) require the employee to sign a "receipt" retained by the employer.

Also, the contract remains in effect until a new commission plan has superseded it or employment terminates, even if the old plan expires.

The law excludes bonuses, except if the bonus is a percentage of sales or profits.

Your Written Commission Plan Includes:

  • On-Site discussion of current or proposed plan (up to 2 Hours)
  • Development of a Written Plan
  • 2 Editing Sessions to Finalize the Plan (Up to 3 hours, via conference call)
  • 1 Management Training Session and/or Employee Meeting to announce and sign-off on the Plan

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