Offer Letter/Employment Agreement for a Commissioned Salesperson (CA)

by Practical Law Labor & Employment

An offer letter or short-form employment agreement to be used for a prospective employee paid in whole or in part on a commission basis for sales-related services provided in California. This Standard Document is intended for private sector employers for their nonunionized workforce and addresses California and federal law. It outlines the terms for a written commission agreement, as required by California Labor Code § 2751, including the method for calculating and paying commissions, when commissions are earned, and how they are handled on termination. This Standard Document also discusses key compliance issues such as classifying employees as exempt or nonexempt under the outside sales and commissioned inside sales exemptions of the Fair Labor Standards Act (FLSA) and California law. It addresses at-will employment, compensation structures including draws and chargebacks, contingent offer provisions, and the employee's continuing obligations to former employers. It has integrated notes with important explanations and drafting tips.