Under California Labor Code Section 2751, commission agreements/plans need to be in writing and signed by the employee. A commission agreement/plan should state (i) the commission rate, (ii) when/how the commission is earned, (iii) when the commission is paid, (iv) what happens when a customer cancels the sale or returns a product (i.e., “chargebacks”, (v) what happens when the employer must incur expenses, such as legal fees, in a dispute with a customer involving the sale, and (iv) what effect termination of employment will have on earning and payment of a commission.
California Labor Code Section 2751 Update
