1) Yes, you can pay an employee by commission "only" but have to make sure (such as by non-refundable advances or draws) that she makes at least minimum wage in order to comply with the labor laws.2) You don't need any notice--it can be effective from when you tell her forward.3) If she has a written employment agreement or contract, you'd need, however, to comply with whatever it says, which may restrict your ability to do this--you can't violate the contract, so you may need to wait until its current term expires.