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California "Exempt Status" Misclassification "Car Salesman" California

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  • California "Exempt Status" Misclassification "Car Salesman" California

    I have looked thoroughly at the California Labor Code with regards to the "Exempt Employee" Classifications, but I can't find anything directly that labels a Car Dealership Sales Associate in any kind of "Exempt Status". Now, this is not directly the issue I have a problem with.
    I was recently hired on board with a New Car Dealership as a Sales Consultant. I am paid strictly on a commission basis, this is not a big suprise for this business. What is odd though is why I would have to punch in and punch out of a clock and work not only 5 days at 40 hours, but they have two of the eight days with mandatory 12 hour shifts. Either I'm completely stupid, or I'm missing something here! Why are they dictating my hours if I am a commission based employee? How is this addressed in the State of California? If in fact I can be labeled "exempt", which I know is probably commonly done all over the state but I'm not sure sure it is truly accurate. I read the classification for "exempt employee" under Outside Sales and I don't meet those requirements. I don't meet the requirements under Executive or professsional either, it doesn't even require a College Degree!
    I just would like clarification. If indeed they can classify me as "exempt", then is there not some kind of law regarding how many hours a week I work. And it it's commission, can they dictate to me to mandatorly work an extra 8 hours a week every single week? Something just doesn't play out right in this situation. If I was a Salary Employee, then okay. But even then it's not dictated that you will work those hours every week. "Exempt status" classification was put in place for such professionals where you're not "clock watchers", but an employee with good judgment and you stay until the job is done.
    At a dealership, we stand around until 9pm so we can lock up. I would hardly consider this "staying around until the job is done". Something just doesn't seem right here I need to get some clarification.


    Thanks,

  • #2
    There are two separate unrelated sets of law in play, one for federal and one for state. You sometimes hear that CA law "overrides" federal law and that is not entirely correctly. It would be more accurate to say that both sets of the law are 100% active 100% of the time, and at any given instance, whatever is most favorable to the employee is what is used. However, the other law is always still in play and the employee can always choose to use the other law. So, employers basically always have to look to both sets of laws, come out with two different answers and use whichever answer favors the employee.

    Federal answer only. There is an exception in federal law (FLSA) that says for auto salespeople working at dealers that these employees are exempt from overtime but not minimum wage. It is not possible under federal law to pay an auto salesperson working at a dealer as 100% commission that ignores minimum wage. It is also not possible for any state law to make this requirement go away, so there is no legal possibility what-so-ever that you are indeed a 100% commission employee.
    http://www.dol.gov/whd/regs/compliance/whdfs11.pdf

    California answer only. This one is harder because for whatever reason, CA has failed to issue what I would consider clear guidance. Or maybe I just have not found where they have hidden it. Absence of proof is not proof of absence. As far as I can find, there is no CA rule exempting auto sales persons from overtime similar to the federal rule. Meaning you should be subject to CA overtime rules. Past that point, you should be subject to CA and federal MW rules. Meaning not 100% commission.
    http://www.dir.ca.gov/dlse/FAQ_OvertimeExemptions.htm

    However, CA does have exactly one law that addresses you.

    § 204.1 – Commissioned Vehicle Salespersons:
    Commission wages paid to any person employed by an employer licensed as a vehicle dealer by the Department of Motor Vehicles are due and payable once during each calendar month on a day designated in advance by the employer as the regular payday. Commission wages are compensation paid to any person for services rendered in the sale of such employer's property or services and based proportionately upon the amount or value thereof.

    The provisions of this section shall not apply if there exists a collective bargaining agreement between the employer and his employees which provides for the date on which wages shall be paid.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

    Comment


    • #3
      California ss 204.1 Understood

      Yes, I saw that latter part referring to Commission Sales and that is what they are doing. In fact, we get paid twice per month. They call the first pay day of the month a "draw" on whatever cars we've sold up until the 15th of the previous month and then the last pay day is minus the draw.
      But, outside of benefits that kick in after my 90 days probationary period, there is no other compensation. It's a 100% commission with occasional promotional bonues based on certain models sold. There is no minimum base salary and if I sell 2 cars the whole month, then I get commission on 2 cars....that's it.
      So, maybe they are doing something illegal, maybe not....I really don't know. They've been doing it this way for 18 years, but that doesn't make it right of course....

      Comment


      • #4
        Are you being paid minimum wage?

        Are you being paid overtime?

        If the answer to both questions is yes, then you are being legally treated. If the answer to either question is no, then file a wage claim with CA-DLSE.
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)

        Comment


        • #5
          The key issue for them to be legal is: Do your commissions total at least what you would have received if you had been paid minimum wage for all regular hours worked and time and a half for overtime hours worked.

          I know of some dealerships that figure if an individual is not generating at least this much in commissions, it is a waste of floor time to keep them as sales associates so they are terminated with payment for time worked. This would be legal.

          I know of others that keep individuals on the floor schedule anyway and just pay them commissions for sales completed even if these minimum wage and overtime requirements are not met. That would be illegal. I know a couple of individuals meeting this category who choose not to complain because they currently have no other employment alternatives.

          I don't really understand the business reason for the dealerships who do the latter since it costs money to bring perspective customers into the showroom and it seems senseless to waste them by having sales associates on the floor who are below standards in closing sales.
          Please post questions on the forum rather than sending me a private message or email. That way others who have similar issues have access to the discussion.

          Comment


          • #6
            Originally posted by Scott67 View Post
            The key issue for them to be legal is: Do your commissions total at least what you would have received if you had been paid minimum wage for all regular hours worked and time and a half for overtime hours worked.
            Just to be clear, CA has daily overtime, and their rules are a bit more involved then the federal hours-worked-past-40-in-the-workweek. Among other things, CA has double time rules.
            "Reality is that which, when you stop believing in it, doesn't go away".
            Philip K. **** (1928-1982)

            Comment


            • #7
              Yes, I am very familiar with CA law with regards to overtime because we had this issue one time years ago when I was a "non-exempt" technician for a company which had to start paying me overtime for anything over 8 hours in a regular work day. CA has some of the strictest labor codes protecting employees in the country.
              As far as me, I'm not looking to abuse the system, nor am I looking for overtime really! I just have a beef working two 12 hour days when I am already giving 40 hours to the dealer! I don't know of any company that can just simply say "oh, we want you to work 6 days a week for us because that's the nature of the business". Well, sorry....I don't think it can be that simple. There must be extra compensation or give me the right to work just 40 hours a week.
              I actually brought it up in our first "training meeting" yesterday with my boss and one other new employee. I mentioned it would be the 1st and last time I would bring it up and that I was just inquiring how and why the system was set up that way at the dealership. My boss suggested it was merely to have full coverage on the show room floor. Their reply was, "I could simply hire more people if you like, but then you'll just make less money". So, it's tit for tat and he's got a point about that.
              I've decided I'll accept it for now until after the first month commissions come in. If I'm pulling my weight and it still doesn't look good, then I may address it then.

              Thanks for all the input here! If anybody has further insight, of course it would be great to chime in!

              Comment


              • #8
                Well, in terms of how you look at it, when you are on commission, more floor time is more opportunity to make money. -- Of course, that's easy for me to say since I'm not the one putting in the 12 hour days!

                I think you are right in accepting it for now and reassessing after you see how you are doing.
                Please post questions on the forum rather than sending me a private message or email. That way others who have similar issues have access to the discussion.

                Comment


                • #9
                  Keep track of your actual hours worked at home. A paper notebook works great.
                  "Reality is that which, when you stop believing in it, doesn't go away".
                  Philip K. **** (1928-1982)

                  Comment


                  • #10
                    Thanks....

                    Well, you are correct, more floor time should equate to more money, but that certainly remains to be seen. The end of my first week as an actual "Certified Salesman" who actually mans the "points" and does everything but close, I've yet to come even close to a sale. In fact, being a Saturday (which should have been busy because we had a Tent Sale this weekend) turned out to be the worst day of the week. I stood and held up a pillar of a building for 10 hours and helped 2 customers the entire day and evening. So, I doubt it I have the kind of mental attitude to do what these guys do. There is just absolutely no challenge in it and no motivation whatsoever! Wow! I'm so stupid to even think I would be cut out for this. Oh well......I'll work my month, collect my barely minimum guaranteed salary for the month and call it quits.
                    I was even more discouraged to discover that not will I work 2 twelve hour days each week, the other days are 10 hour days! So, that really nailed the lid on the coffin. I'm not working and giving my life to some dealership for minimum wage. I can just work at McDonalds and work less hours than this and get paid more. This is a very discouraging realization....

                    Comment

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