[fname], during 2012 California passed a new employment law bill AB1396.


This law requires employers who compensate employees for services rendered in the sale of services or goods and the compensation is based upon the value of the product or services sold there must be a compensation agreement in place by 1/1/2013.  It is considered a commission plan.

Although there is a provision in the law that seems to indicate if the individual actually performs the services sold this compensation agreement may not apply.  However, the law is unclear, the law is new and untested.

The compensation agreement must include:

1. The method by which the compensation is calculated
2. Be signed by both the employee and employer

There are very limited exceptions to the law mostly dealing with employees meeting a very short term goal.

If you have questions or need help with the compensation agreement I encourage you to contact Anita York at (949) 222-0166. She specializes in employment law for dentists and has the agreements ready for you.

Thanks,  Monica


Monica Rebella, CPA/IAR
507 E. First Street #A
Tustin,CA 92780
ph (714) 619-0667
Fax (714) 544-0236
email: mrebella@rebellacpa.com

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