Bill Text: CA AB1396 | 2011-2012 | Regular Session | Chaptered


Bill Title: Employment contract requirements.

Status: (Passed) 2011-10-07 - Chaptered by Secretary of State - Chapter 556, Statutes of 2011. [AB1396 Detail]

Download: California-2011-AB1396-Chaptered.html
BILL NUMBER: AB 1396	CHAPTERED
	BILL TEXT

	CHAPTER  556
	FILED WITH SECRETARY OF STATE  OCTOBER 7, 2011
	APPROVED BY GOVERNOR  OCTOBER 7, 2011
	PASSED THE SENATE  AUGUST 29, 2011
	PASSED THE ASSEMBLY  MAY 31, 2011
	AMENDED IN ASSEMBLY  MAY 26, 2011

INTRODUCED BY   Committee on Labor and Employment (Swanson (Chair),
Alejo, Allen, Furutani, and Yamada)

                        FEBRUARY 28, 2011

   An act to amend Section 2751 of, and to repeal Section 2752 of,
the Labor Code, relating to employment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1396, Committee on Labor and Employment. Employment contract
requirements.
   Existing statutory law, which has been held invalid by existing
case law, requires an employer who has no permanent and fixed place
of business in the state and who enters into a contract of employment
involving commissions as a method of payment with an employee for
services to be rendered within the state to put the contract in
writing and to set forth the method by which the commissions are
required to be computed and paid. An employer who does not comply
with those requirements is liable to the employee in a civil action
for triple damages.
   This bill would, by January 1, 2013, make this contract
requirement applicable to all employers entering into a contract of
employment involving commissions as a method of payment with an
employee for services to be rendered in the state. In addition, the
bill would repeal the provision making an employer who violates this
requirement liable in a civil action for triple damages.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT 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 this bill is
to restore the employee protections that had 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.
  SEC. 2.  Section 2751 of the Labor Code is amended to read:
   2751.  (a) By January 1, 2013, 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 bonus and profit-sharing plans, unless there has been an
offer by the employer to pay a fixed percentage of sales or profits
as compensation for work to be performed.
  SEC. 3.  Section 2752 of the Labor Code is repealed.
                                           
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