June 23, 2008
Over the years this issue continues to raise its ugly head. Some dealerships will have a lead body shop person or tech agree to have a portion of his wages taken out and paid to a helper. We all know that these employees love it because they can get more done and as a result make more money. I honestly believe that this practice is going to create havoc one day. It’s simply a bad idea. Having one employee pay for the wages of another employee is opening the door for some anal retentive department rep or attorney to pursue this issue in a class action lawsuit.
I suggest, and some have taken me up on this, that you restructure the payment arrangement so that each individual in question gets a certain percentage of the commission. The lead, as an example, may get 75% and the helper gets the 25% balance. Just remember as long as the helper never gets less than minimum wage and is paid for any overtime (if appropriate), you should be fine.
If we need to discuss this further, let me know.
June 10, 2008
PULEEZZZZ disable this feature!! I have preached this issue sooo many times and now a dealership is in truoble, because they continued to use this “feature” which is not advantageous to your interest!!! If you have an automatic lunch deduction in place you are not going to remember every single time that the employee in fact took lunch. I have tried to talk to the Reynolds & Reynolds reps that I have seen at ADOMA over the years but they were sales reps and not the decision makers for such matters.
May 12, 2008
Well, it never stops!! The Labor Board is at it again. This time it concerns “Spiffs” which are bonuses that are given in combination between the manufacturer and the dealership. The employee (salesperson) signs a contract between themselves and the manufacturer whereby they are in agreement with the manufacturer that if they sell, as an example, 75 cars throughout the year, they will receive a matching bonus of $25.00 from each the manufacturer, and the dealership, with the stipulation that they must still be employed on Decemember 31st of that year. One dealer terminated a salesperson who had in fact sold 72 in November. He filed with the Labor Board that he was denied the opportunity to sell the last three (but had several in the pipeline). The agreement is clearly a contract between the employee and the manufacturer. The Labor Board is sending the matter to a formal hearing arguing that the bonus is a performance bonus and that the dealership “allegedly” should have paid their $25.00 portion on the vehicles sold. The hearing is coming up soon and I will let you know the results. This is really cutting edge stuff! I know that the industry, as a whole, has not paid out the bonus if the employee is not employed on December 31st.
May 5, 2008
We have been conducting a number of HR Audits on behalf of dealerships in an attempt to uncover illegal practices. The results are astounding! You have to understand that the law is the law and it will catch up to you. We also have been finding out that some dealerships are not understanding the law regarding calculating auto mechanics overtime pay. Here is the formula.
Shortcut: Flag hours times the flag rate divided by the total clock hours divided by 2 times the overtime hours equals the overtime pay.
Please make sure the above formula is being used.
April 7, 2008
Dealerships, in general, have a policy whereby employees may have their cars repaired at the dealership with the understanding that the costs of the repairs may be deducted from their paychecks over a given period of time. The problem that arises is when an employee leaves the company prior to the entire cost of the repairs being deducted. Normally, the dealership will accelerate the remaining balance from the final check. This is a mistake. The Labor Board has consistently taken the position that the remaining balance cannot be accelerated, even if it is in writing. They expect the employer to treat the employee as they would any other individual, or entity, that they have extended credit to. If the payroll deductions were weekly, as an example, you have to bill the employee weekly after they leave. If they fail to pay, your remedy is small claims court (yeah-right!). My advice is not to have the deductions longer than one or two payrolls if you have such a policy in place.
March 31, 2008
Dealerships, and quite frankly, other employers, from time to time, will put on a luncheon for the staff. The question is, “Does the employer have to pay their employees for their lunch period when the company sponsors the lunch?” Is there a difference between simply having lunch available for them, or having the luncheon as part of a staff meeting?
March 17, 2008
We have received a number of inquiries regarding the legallity of installing surveillance equipment (both audio and visual). It is legal to do it, however, the dealership needs to have the employees made aware that they are being installed and get their signature that they are aware that the systems are being installed. In addition, all new hires need to be informed at the time of hire.