Sales Compensation in California: New Compliance Mandates Promise Increased Focus on Incentive Compensation

July 26, 2012

Morgan Lewis presented this webinar discussing the new requirements of the California Labor Code § 2751 and shared best practices for developing and implementing changes to sales incentive plans.

Employers with sales employees in California face new compliance mandates under California Labor Code § 2751, which took effect on January 1, 2013. The new law requires employers to enter into written contracts with commissioned employees that include details such as commission computation and payment methodology. The new law likely will result in an increased focus on sales compensation generally in California and in increased scrutiny of sales compensation plans by plaintiffs' lawyers.

Topics covered included:

  • Complying with California Labor Code § 2751
  • Disclosures relating to commissions under the Wage Theft Prevention Act of 2011, California Labor Code § 2810.5
  • Timing of monthly incentive payments: Does California Labor Code § 204 apply?
  • Under what circumstances can employers recover advances paid to employees (chargebacks)?
  • How quickly must employers pay incentive compensation upon termination?