Newsletter - Winter 2002
Nine Most Common Wage and Hour Problems
by Edward J. Castellani
The Department of Labor has been very active in the audit of dealerships. These audits frequently reveal that all dealers are not complying with Federal and State wage and hour rules and can result in significant back wages and interest.
Listed below are dealers’ nine most common violations of Federal and State labor law:
- 1. Failing to ensure that vehicle salespeople receive at least the minimum wage each pay period. An employee paid on commissions must still be paid the minimum wage.
- 2. Treating salaried employees as exempt from overtime although their job functions did not meet the requirements for an exemption.
- 3. Using automated payroll systems, which make deductions for meal breaks, even if employees worked through the break.
- 4. Failing to count meetings, training sessions, and waiting time as work.
- 5. Misclassifying certain employees as independent contractors – for example, dealer trade drivers, groundskeepers, office staff, detail or prep technicians.
- 6. Failing to meet the employer’s burden of proof for hours worked by permitting employees to maintain their own record of scheduled hours, rounding hours beyond the nearest quarter hour, and failing to maintain signed employee certifications of handwritten hours worked.
- 7. Failing to understand the overtime computation methods for non-exempt salaried employees, variable rate pay plans, or employees’ aid under two or more pay plans.
- 8. Failing to compute overtime premiums due to hourly or salaried non-exempt employees who also receive bonuses or commissions (that is, not including such payments in the base pay on which the overtime is computed.)
- 9. Employing workers under the age of 18 in hazardous occupations (e.g. driving on public roads) or during impermissible hours of the week.
Mr. Castellani is a member of our Business Department. He practices in the Lansing office and may be contacted at 517.377.0845 or toll free at 800.748.0436. You can also contact him via e-mail at ecastellani@fraserlawfirm.com.