Earlier this summer, the U.S. Department of Labor issued an opinion that, in most cases, auto dealerships can include OEM incentive payments towards their requirements to pay non-exempt sales employees the standard state/local minimum wage in their jurisdiction.
Likening the OEM incentive payments to tips, the DOL stated that, when third-party incentives are included (either explicitly or implicitly) as part of an employment agreement and communicated to a worker prior to performing sales duties, they can count towards a minimum wage obligation.
We encourage all dealers to include language related to third-party incentives in standard employment agreements for sales personnel, and to refer to the DOL opinion letter above as a way to establish a good-faith defense against potential wage disputes. NADA has also created a helpful guide to federal wage and anti-discrimination compliance (visible to members only), which we encourage you to review.
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