Announcement

Collapse
No announcement yet.

Auto Sales... is this legal? New Jersey

Collapse
This topic is closed.
X
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Auto Sales... is this legal? New Jersey

    Relatively new to auto sales. Was recently notified by management that we would have draw (minimum wage for hours worked in a week) deducted from commisions earned in weeks that commisions exceed the draw. Are not employers required to pay minimum wages for hours worked? Other duties are required of us during the time spent at the dealership (snow removal, moving cars around the lot, stocking in of new cars, etc..). It seems to me that the new "pay plan" basically amounts to free labor for the dealership.

  • #2
    Minimum wage must be received "free and clear". That means you cannot be required to "pay it back".
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

    Comment


    • #3
      Depends on just what you mean. Yes, you have to be paid at least minimum wage (on a workweek basis). It is the commissions you do not have to be paid, and it is perfectly legal if commissions exceed MW, to deduct the prior MW payments from the remaining commissions due. In fact that is what the meaning of "draw" is.

      Examples. In all example, Bob works exactly 40 hours, and MW is $7.25/hr , or $290.
      - Bob earns $100 in commissions for the week. Bob must be paid $290 (MW).
      - Bob earns $0 in commissions for the week. Bob must be paid $290.
      - Bob earns $500 in commissions for the week. Bob would be paid $500 in total. Probably $290 for MW, plus a later payment of $210 to make up the difference. Perfectly legal if done correctly.

      Plus, the economy is bad. Meaning few sales and few commission. Plus commissions/draw are often on a monthly basis, meaning that MW is paid each week (the draw), then monthly the total commissions is compared to total draw (MW). At that point any commissions in excess of aggregate draw is paid.
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)

      Comment


      • #4
        This is very common in auto sales. I worked at a dealership for 7 years and the pay plans were constanting changing but always had a drawer.

        Comment


        • #5
          To clarify, though, your "draw" of minimum wage cannot be recovered through future commissions.

          For example, 40 hrs a week at $7.25 = $290, and that is what you are paid for your first week of work.
          Now let's say, this happens for 3 weeks straight, then in week 4, you also work 40 hours, but you sell one car and your commission is $1000.

          $290 * 4 weeks = $1160.

          Since MW exceeds your commission, no offset is permitted. You would still need to be paid a minimum of $290 for week 4.
          Last edited by Pattymd; 01-13-2011, 06:00 AM.
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

          Comment

          Working...
          X