Multi-State Employers: New Laws You Should Be Aware Of!

Heather Bailey & Paul Jaquez
September 18, 2012 — 1,127 views  

Federal: Distracted Driving: Employers can now be penalized up to $11,000 when their commercial motor vehicle drivers are caught red handed using hands-free devices to dial, text, surf, etc. while driving!  Many states are following in line with similar laws.  Effective January 2013, Illinois  enacted laws with stiff fines where commercial motorists are caught texting while driving and where cell phones are used near posted construction zones – and effective immediately – no such use can occur within 500 feet of an emergency scene (i.e., taking photos).  If this applies to you, seek counsel on getting an employee cellular phone use policy in place immediately so that employees are aware (and acknowledge) you do not condone or require such behavior while driving. 

Hawaii: Hawaii now recognizes civil unions and other legal unions from other jurisdictions for purposes of EEO retroactively to January 1, 2012.

IllinoisBeginning January 2013, employees’ signed authorization for voluntary deductions can be completed electronically, and, employers cannot ask employees for their personal social networking passwords or demand any such access. 

Missouri: If you use the last four digits of your employees’ social security numbers as identification, start planning now, because as of December 31, 2015, employers will not be able to use any part of employees’ social security number for such purposes.  Additionally, effective August 28, 2012, it is no longer a “false statement” for an applicant/employee to not acknowledge or give information related to expunged criminal records.

Vermont:  Effective July 1, 2012, employers cannot 1) ask applicants about sealed or expunged criminal records; or 2) discriminate or retaliate against applicants/employees related to their credit reports or histories.

CALIFORNIA ALERT! NEW FOR 2013: Commission Sales Agreements: Put Them in Writing!

In California, if you pay your employees a commission, you must have the commission plan reduced to writing by January 1, 2013. California law AB 1396 requires all employers doing business in California to draft written contracts for employment that involves commissions as a component of compensation. Specifically, the written contracts must set forth (1) the method for computing the commission; and (2) the method for paying the commission.  It is important for an employer to be as detailed as possible, while still maintaining some flexibility. AB 1396 will require an employer to specify all components of the commission (i.e., any costs or adjusted amounts in determining the final amount).  Further, recall that under the law, a commission is due and payable after the reasonable conditions precedent of the employment agreement have been met.  Arguably, AB 1396 will provide less accommodation to an employer in calculating when a commission ultimately becomes “earned” or ascertainable – as the employer must now delineate more definitively when the employee should expect payment.

Employers must provide a signed copy of the contract to every employee covered by the commission agreement, and must also receive and retain a signed receipt from the employee that he/ she received and agreed to the commission agreement. 


In addition to the typical wage and hour litigation that may ensue for violating an employee’s compensation payment, a violation of AB 1396 will itself result in a statutory penalty of $100 for each aggrieved employee per pay period for the initial violation and $200 for each aggrieved employee per pay period for each subsequent violation.

Steps Going Forward:   

1)      Ensure that the compensation method you are utilizing is indeed a “commission” (i.e., a % of sales or profits) and not a bonus or profit-sharing structure;

2)      State what the commission is;

3)      State how the employee can earn the commission;

4)      State how the commission will be computed;

5)      State the method of how the commission will be paid; and

6)      State when the commission is considered “earned.”

Heather Bailey & Paul Jaquez

SmithAmundsen LLC

Heather Bailey and Paul Jaquez are attorneys in SmithAmundsen’s Labor & Employment Practice Group. For more information on these laws and others, contact them at [email protected] or 312.894.3266. Paul and Heather are also contributors at