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With fewer sales, salespeople sue when wages dip below minimum

November 15, 2010

Fourteen current and former car salespeople are suing a Florida dealer, claiming their hourly income often fell below the state’s minimum wage after automobile sales hit the skids. The dealership president said it has done nothing wrong.

But some employment lawyers anticipate more salespeople who work on commission will be filing lawsuits over pay issues such as minimum-wage violations as layoffs climb in the faltering economy. Generally, lawyers say, such claims aren’t filed until after a worker loses his job.

At the Florida dealership, salespeople are paid only commissions. They are eligible to receive a "draw,’’ in essence a loan against future commissions. The draw equals 40 hours at Florida’s $7.21 minimum hourly wage, according to the lawsuit. The Illinois minimum wage is $7.75; the federal minimum wage is $6.55 an hour.

The dealership salespeople claim they routinely worked 55 to 65 hours a week, but only got a draw based on 40 hours of work. Plus, they allege, some of them weren’t earning a commission because they weren’t selling any cars.

"With the economy being what it is now and with people not buying stuff, when you tell a commissioned salesperson that they are only going to get paid what they sell, you need to ensure that they are being paid at least minimum wage,’’ says William Amlong, the Fort Lauderdale lawyer representing the salespeople.

The employees also made claims for overtime pay in their original complaint, but dealerships aren’t required to pay overtime to salesmen under federal law.

$1.84 an hour

During one pay period last summer, one of the plaintiffs said his hourly pay worked out to $1.84 an hour because he earned only $239 despite working 130 hours.

His income shrank not only as a result of the decline in sales, he says, but because of a reduced commission structure and more salespeople competing for fewer customers.