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

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Employment contract requirements.

Spectrum: Partisan Bill (Democrat 5-0)

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

Download: California-2011-AB1396-Introduced.html

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BILL NUMBER: AB 1396	INTRODUCED
	BILL TEXT


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

                        FEBRUARY 28, 2011

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



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1396, as introduced, 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.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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 Sections 2751 and 2752 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.   Whenever any   (a)   
 By January 1, 2013, whenever an  employer  who has
no permanent and fixed place of business in this State 
enters into a contract of employment with an employee for services to
be rendered within this  State   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. 

   The 
    (b)     The  employer shall give a
signed copy of  each such   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 con 
 tinue 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.  
   As 
    (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.