|                                                            | U.S. Department of Labor |
|------------------------------------------------------------|--------------------------|
| Employment Standards Administration Wage and Hour Division |

Fact Sheet #11: Automobile Dealers Under the Fair Labor Standards Act (FLSA)
This fact sheet provides general information concerning the application      of the FLSA to automobile dealers.
Characteristics
Automobile dealers are non-manufacturing establishments engaged in the      business of selling new or used automobiles and trucks to the ultimate      purchaser.
Coverage
There are two types of coverage under the FLSA. Either or both may apply      in a given situation depending on the circumstances.

Enterprise coverage applies to all employees of new or used automobile      dealerships which have at least $500,000 per year in gross sales. 

Individual coverage applies to any employee whose work regularly      involves commerce between states ("interstate commerce") even if      the employer's annual sales are less than $500,000.
Requirements
The Federal minimum wage is required to be paid to all non-exempt employees.

Youth Minimum Wage: The 1996 Amendments to the FLSA allow employers to      pay a youth minimum wage of not less that $4.25 an hour to employees who      are under 20 years of age during the first 90 consecutive calendar days      after initial employment by their employer. The law contains certain      protections for employees that prohibit employers from displacing any      employee in order to hire someone at the youth minimum wage.

The FLSA requires the payment of time and one half the employee's      regular rate of pay for all hours worked in excess of 40 in a workweek to      all non-exempt employees.

Numerous exemptions exist which remove certain types of employees from      specified requirements of the FLSA. Among those most commonly applicable      to automobile dealerships is one which exempts certain sales and parts      personnel, mechanics, and service writers from the overtime requirements.      Another exempts certain managers and administrative employees from the      minimum wage and overtime requirements.

There is no requirement that wages be paid weekly, as long as some regular   pay period (such as bi-weekly or monthly) is established by the employer. Once   the employer has established the pay period the FLSA requires that employees   receive "prompt payment" for all hours of work within the pay period.   Although the "settlement period" does not have to coincide with the   regular pay period, in the absence of strong evidence to the contrary it will   be assumed that an employer intended that a settlement period for commissions   represents the pay period for the affected employees. Periodic draws against   commission earnings within the pay/settlement period may be less than the minimum   wage. Employers may credit such draws against their minimum wage obligation   when settling the amount due to employees at the end of the pay/settlement period.

Workers under the age of 18 are prohibited from working in certain jobs. With   regard to minors operating vehicles for automobile dealers, generally, no employee   under 18 years of age may drive or serve as an outside-helper on a motor vehicle   on a public road; but 17-year-olds who meet certain specific requirements may   drive automobiles and trucks that do not exceed 6,000 pounds gross vehicle weight   for limited amounts of time as part of their job. (See Fact Sheet #34 http://www.dol.gov/esa/regs/compliance/whd/whdfs34.htm.)   Minors younger than 16 may work only during particular times of the day and   for a limited number of hours. Minors under 14 may not be employed.

Employers must keep records showing their employees' names, hours      worked, rates of pay, regular and overtime pay, home addresses, dates of      birth (if they are under the age of 19), gender, and occupation.
Where To Obtain Additional Information
This publication is for general information and is not to be considered      in the same light as official statements of position contained in the      regulations.

**For additional information, visit our Wage-Hour website: http://www.wagehour.dol.gov and/or call our Wage-Hour toll-free information and helpline, available 8am to 5pm in your time zone, 1-866-4USWAGE (1-866-487-9243).**

 

| **U.S. Department of Labor**Frances Perkins Building200 Constitution Avenue, NWWashington, DC 20210 | 1-866-4-USWAGE, TTY: 1-877-889-5627Contact Us |
|-----------------------------------------------------------------------------------------------------|-----------------------------------------------|