|Kim Parker, President|
Getting Ready for 2017
With the Presidential Election nearly behind us, it’s time to turn our attention to California’s new employment laws effective January 1, 2017. Amazingly enough, Governor Brown signed 898 of the 1,059 bills presented to him this year.
We are providing you with information on the 2017 Employment and Labor Laws that will have the most impact on your business, one month earlier this year. Join us in December at an Employer Forum near you or stay in your office and join us via webinar.
In addition to registering for one of our Employer Forums, I hope you have started working on updated commission agreements for your sales team—I know I have. Since January 1, 2013, employers who pay commission to any employees performing work in California must have a written commission agreement with each employee.
As a refresher, commission agreements must:
• include a method for calculating and paying the commissions;
• be signed by the employee; and
• be documented with an employee acknowledgment form (receipt of the agreement).
Here are some tips for commission agreements
1. Keep them short and sweet. The longer and more confusing the agreement, the harder it will be to enforce.
2. Determine whether you want an expiration date. In the case of an agreement that expires but the employee continues to work under it, the agreement terms will remain in effect until a new agreement is put in place or employment is terminated.
3. In addition to providing the employee a signed copy of the agreement, which is required by law, maintain a copy of the commission agreements and acknowledgments of receipt in employees’ personnel files so they may be inspected or copied if requested at a later date.
4. Consider attaching a job description.
5. Include the following information if applicable:
a. Employee’s name, title and the date the agreement was signed
b. Name of a company representative and the date the agreement was signed
c. Base Salary
d. Quotas and commission rate calculation: Clearly explain when a commission is
earned and give examples, such as “commission is earned by an employee when the
company has received payment for the product(s) sold”.
e. Timing of commission payout: Give examples so that the employee can calculate
the commission for each sale.
f. Impact of returns (if applicable)—once a commission is earned, it is income and
belongs to the employee so you can’t take it back.
g. Recoverable Draw: How will advances on commissions be handled?
h. Impact of termination on commissions—clearly define when the commission is
earned, when the employee is paid and when final pay for commissions must occur.
If you haven’t ever written a commission agreement, have no fear, we are here to help! We’ve got a terrific Commission Agreement Fact Sheet and Questionnaire to help get you started or we can lighten your load and prepare an agreement for you.