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Issue 2 - 2012 Newsletter

    In This Issue:
  • NLRB Poster Implementation Still on Hold
  • 2013 Requirements for Employment Contracts Involving Commissions
  • Non-Employees Can Be Protected From Retaliation for Reporting the Harassment of Employees

NLRB Poster Implementation Still on Hold

The National Labor Relations Board's new poster requirement continues to be on hold based on a federal court's order to delay the effective date, pending a court appeal.

Stay tuned.

2013 Requirements for Employment Contracts Involving Commissions

If you pay your employees commissions, it's time to update your employment agreements. Employment relationships that involve commissions for services rendered within the State of California are subject to strict new legal requirements, effective by January 1, 2013 (California Labor Code Section 2751).

"Commissions" are defined as "compensation paid to any person for services rendered in the sale of such employer's property or services and based proportionately upon the amount or value thereof."

"Commissions" do not include short-term productivity bonuses or bonus and profit-sharing plans, unless those plans are paid according to a fixed percentage of sales or profits as compensation.

By January 1, 2013, employment contracts involving commissions must meet the following requirements:

  • The employment contract must be in writing;
  • The contract must set forth the methodology to be used to calculate and pay commissions;
  • Employers must give every employee a signed copy of the employment contract;
  • Employers must get a signed receipt for each employee who receives an employment contract;
  • When an employer and employee continue to work under the terms of an expired contract, the terms of the expired contract will remain in force until the contract is either: (1) superseded, or (2) employment is terminated.

Apart from these requirements, the wording of commission contracts can affect employees' legal claims to commission compensation (e.g. when commissions become "earned").

If you pay commissions to your employees, or have questions about whether your companies will be subject to these new requirements in 2013, we recommend that employment legal counsel review your practices. Simpson, Garrity, Innes & Jacuzzi, PC has significant experience in assisting employers to comply with their wage and hour obligations.

Non-Employees Can Be Protected From Retaliation for Reporting the Harassment of Employees

Do non-employees have legal rights to be protected from retaliation? In a recent California decision, Fitzsimons v. California Emergency Physicians Medical Group, the appellate court answered YES.

Mary Fitzsimons was a partner at the California Emergency Physicians Medical Group ("CEP"). After reporting that certain officers and agents had sexually harassed employees of CEP, Fitzsimons was removed from her position as regional director. Fitzsimons filed a court complaint against CEP for, among other things, retaliation in violation of the Fair Employment & Housing Act ("FEHA") and public policy.

FEHA prohibits unlawful employment practices such as discrimination, harassment, and retaliation for reporting any such employment practices. Because FEHA applies to circumstances arising from an employment relationship, CEP argued that Fitzsimons, as a partner, was not in an employer-employee relationship and therefore could not maintain her legal claim for retaliation.

The court ruled that Fitzsimons, although a partner at CEP, was protected under FEHA from retaliation for opposing the partnership's harassment of employees. While there was no employment relationship with Fitzsimons, the alleged retaliation resulted from Fitzsimons' reporting the harassment of employees, with whom CEP did have an employment relationship.

The court, however, cautioned that its decision does not insinuate that a partner can now maintain claims for discrimination or harassment against a partnership. Only partners who opposed harassment of employees receive protection under the law.

Based on this decision, California partnerships (e.g. law, accounting, consulting, etc.) should be more cautious before concluding that partners have no "employee-type" legal protections.

Issue 3 - 2012 Newsletter
Issue 1 - 2012 Newsletter

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601 Gateway Boulevard, Suite 950
South San Francisco, CA 94080
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Tel: 650-615-4860
Fax: 650-615-4861

2175 N. California Blvd, Suite 710
Walnut Creek, CA 94596
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Tel: 925-322-8889
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