Newsletter - Summer 2002
Wage and Hour Compliance for Dealerships
by Brandon W. Zuk
Employees of dealerships are entitled to at least $5.15 per hour, and one and one-half times their regular rate, for all hours worked in excess of 40 per week. The law contains important exemptions to the overtime requirement, some of which are specifically available to automobile dealers.
The following dealership employees are exempt from minimum wage and overtime law:
1. Any commissioned employee of a dealership is exempt from overtime if: (a) the employee’s regular pay rate is one and one-half times the minimum wage; and (b) more than half his or her compensation for a representative period (not less than one month) represents commissions on goods or services;
2. Any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements is exempt. This exemption applies to service managers and service salesmen only if the majority of their sales are for nonwarranty work. This exemption is available for mechanics actually servicing vehicles regardless of whether it is warranty or nonwarranty work.
3. Executives (supervisors of at least two full-time equivalents), administrative, and professional employees are exempt, if they are paid on a salary basis. "Salary basis" generally means that, subject to a few exceptions, the employee receives full salary for any week in which work is performed, without regard to the number of days or hours worked.
Wage and hour compliance of a dealership can be reviewed in a legal audit. If interested in a legal audit of your employment policies or if you have questions regarding labor law, please contact Brandon Zuk.
Brandon Zuk is a member of our Labor, Employment, and Civil Rights Department. He practices in the Lansing office and may be contacted at 517.377.0831 or toll free at 800.748.0436. You can also contact him via e-mail at bzuk@fraserlawfirm.com.