Commissions are wages paid to employees for services rendered in the sale of their employers’ property or services, based proportionately on the amount of value of property or services. Commissions rates are commonly expressed as a percentage.
First, California requires that all commission agreements be made in writing. In other words, a written contract is required. Second, the written commission agreement must describe with particularity the method for computing or calculating the commissions. Third, the written commission agreement needs to set forth the method by which the commissions shall be paid. Fourth, employers are required to give a signed copy of the written commission agreement to every employee who is a party to the agreement. Fifth, employers must sign the contract and get a signed receipt for the contract from the employees.