GNYADA May 2017 Newsletter

4 Local Dealerships Targeted for Wage-and-Hour Violations A federal judge approved a

ensure that such calculations result in payments of at least the minimum wage and overtime (at time and one- half the minimum wage) for each week during the month. The plaintiffs also prevailed on their claim of unpaid commissions because of impermissible deductions such as “auction expenses,” damage to dealer vehicles, or for disciplinary reasons. The judge found the dealer group’s violations to be “willful” — i.e., the dealer knew its obligations and failed to comply. Therefore, the dealer had to pay additional penalties on top of its obligation to pay the unpaid wages. The same class action firm recently commenced an action against another area dealer group and the dealer principals; this action is nearly identical to that which was brought against the dealer group in the settled case. Furthermore, another class action claim on behalf of parts

counterpersons at a Brooklyn-based dealer group has been filed alleging failure to pay overtime, requiring off- the-clock work and failing to provide Payday Pay Rate notices. These two cases are still in the very early stages. GNYADA will be paying close attention as they progress and keeping members apprised of important developments. Safeguard Against Similar Claims Failing to pay workers properly can prove prohibitively expensive and even expose dealer principals or supervisors to personal liability. Dealers are encouraged to use the resources available under GNYADA’s Employee Relations Plan. These include the publication Dealership Employee Pay Rate and Payday Forms: Instructions for Completing Notice and Acknowledgement Forms and access to specialized labor counsel. For further questions about wage and hour issues, call 718.746.5900.

$5.9 million settlement to resolve a class action lawsuit against a New York dealer group. The suit was brought by salespeople alleging that the dealer failed to pay minimum wage and overtime and made impermissible deductions from wages and commissions. Both the individual dealer principals and the dealer group were found jointly liable for these violations. According to the dealer group’s salespeople, the dealer paid a base salary of $20 per day plus a percentage of each car or service sold. Salespeople earned an average of $50K per year but during a slow week may have earned only $100 for 45-55 hours of work. Since New York law requires that minimum wage and overtime wages be calculated on a weekly basis, the judge held that the dealer violated wage and hour laws. Dealers who reconcile commissions for salespeople on a monthly basis must

NADA Director’s Column FTC Receptive to Dealer Issues

Commission (FTC)’s Acting Director of the Bureau of Consumer Protection, Thomas Pahl. My fellow Committee members and I were encouraged by Mr. Pahl’s view toward working with NADA to address important dealer issues. Dealer advertising of used cars with open recalls was the dominant discussion topic. The meeting also covered such varied matters as the FTC’s recent revisions to the Used Car Buyers Guide, the status of the

CFPB’s Disparate Impact Initiative, recent amendments to the Military Lending Act, and the status of litigation involving the Department of Labor’s “White Collar” Overtime Rule. Future NADA Director’s Columns will update members on these important issues, as well as an outline for the best Comprehensive Tax Reform plan that NADA has seen in decades.

by Bob Vail, Vail Buick GMC, NADA Director Greater New York

At NADA’s most recent Regulatory Affairs Committee meeting, we were joined by the Federal Trade

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • May 2017 3