Special Bulletin

AB 1396 which became effective 1/1/2013 amends the California Labor Code as follows:

Section 1. The Legislature hereby finds and declares that this bill is enacted in light of the holding in Lett v. Paymentech, Inc. (N.D. Cal 1999) 81 F.Supp.2d 992 and that the intent of the this bill is to restore the employee protections that has been in effect prior to that holding by making Section 2751 of the Labor Code apply with equal force to employers with a fixed place of business in the state and to employers who do not have a fixed place of business in the state.

Section 2. Section 2751 of the Labor Code is amended to read:

  1. (a) By January 1, 2016, whenever an employer enters into a contract of employment with an employee for services to be rendered within this state and the contemplated method of payment of the employee involves commissions, the contract shall be in writing and shall set forth the method by which the commissions shall be computed and paid. *

(b) The employer shall give a signed copy of the contract to every employee who is a party thereto and shall obtain a signed receipt for the contract from each employee. * 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terms of the expired contract, the contract terms are presumed to remain in full force and effect until the contract is superseded or employment is terminated by either party.

(c) As used in this section, “commissions” has the meaning set forth in Section 204.1. “Commissions” does not include short-term productivity bonuses such as are paid to retail clerks, and it does not include bonuses and profit sharing plans, unless there has been an offer by the employer to pay a fixed percentage of sales or profit as compensation for work to be performed.

Section 3. Section 2752 of the Labor Code is repealed.

*Emphasis Added

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