Obama's New Overtime Rules May Hit Dealers Particularly Hard

Aaron Cole
by Aaron Cole

Car dealerships may be forced to pay some of their employees more under new overtime rules proposed by President Barack Obama, Automotive News is reporting.

The proposed overhaul for employees who make less than $50,000 a year could impact dealers who make a significant portion of their earnings from salary, rather than commission.

The suggested overtime rules would apply to roughly 40 percent of the American workforce, rather than the 8 percent the current rules apply to now. The Department of Labor estimates more than 5 million workers would be covered by the new rules.

Douglas Greenhaus, an attorney for the National Automobile Dealers Association, told Automotive News that the new rules would apply to mostly support workers in dealerships. Mechanics, service managers or sales staff likely wouldn’t be effected.

“This would impact those who get the majority of their pay from salary,” Greenhaus said.

The changes would raise the overtime threshold from $23,660 annually to $50,440. The federal poverty line for a family of four is $24,008.

Dealers may cut pay for workers who fall under the new guidelines, Greenhaus said. The NADA would analyze the new rules and lobby the administration based on what dealers may want.

“The important thing is to maintain as much as possible the flexibility for the employer and employee on how to compensate,” Greenhaus said.

The public comment period for the new overtime rules ends Sept. 4.

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  • Wheatridger Wheatridger on Jul 12, 2015

    If "the new rules would apply to mostly support workers in dealerships. Mechanics, service managers or sales staff likely wouldn’t be effected (sic)", then how would "Obama's new overtime rules (may) hit dealers especially hard"? I can't see the logic here. Surely the vast majority of dealership personnel costs are paid to those three exempt groups mentioned. Who else is there? The receptionist, the bookkeeper, the lot boys... are there secretaries anymore? Auto dealers would seem better insulated against rising overtime costs than most retailers.

    • VolandoBajo VolandoBajo on Jul 15, 2015

      The evolution/extinction of secretaries went like this: Secretary => Administrative Assistant => Administrator => Department Head The time span was about a third of a century, plus or minus. And the position went from being one that was supposed to support those who actually did the work, to one that balanced out the low percentage of women in upper management with a high percentage of women in lower/middle management. Meanwhile those who actually had to get the work done, found themselves answering to the same type of people who formerly had to provide support services for them. There is a Harvard Business Review article hiding in there, but I am too tired from having lived through that era to want to struggle to serve as the midwife for that depressing piece of productivity-killing news. The scenario might be a mutation of the above in dealerships, but that IS the scenario in many project oriented engineering and technical organizations. Your tax dollars at work in the administration of "equality" measurement. The big boys still have their country club/poker night sessions intact, and the real doers end up being cast as players in a Dilbert cartoon office, while people who would formerly have served as secretaries, now run the show, setting the hierarchy for all to conform to.

  • Urlik Urlik on Jul 13, 2015

    I work for DoL enforcing the FLSA and have done investigations on car dealerships. I've never seen an employee at one that would be effected by the new rule. That being said, it's very easy to change someone's compensation so that the company is compliant with the new rule and the employee makes the same amount of money in the future.

  • Master Baiter Master Baiter on Jul 13, 2015

    We're living in a dictatorship.

    • See 2 previous
    • Wheatridger Wheatridger on Jul 13, 2015

      Right on! How can you think of Hitler without thinking of health insurance mandates? And Stalin's commitment to fair labor practices was legendary... right? ; >

  • Lot9 Lot9 on Jul 16, 2015

    Companies and managers now have the Employees where they want them, thanks to their favorite political party, out to do away with unions and the middle class or anything that the majority of this nations would be better off. Maybe, they would be happier it they had indentured servants or slaves. The wages have gone down and been stagnant for decades Productivity has gone up. All the while. they continue to fight paying taxes even at the low rate they are at now. They have so many loopholes that help them. Heck they are in the old middle class bracket, now. Look at companies like Boeing, doing great, CEO has great income and bonuses. But they do not want to share this with the people that worked to make it. They even did away with their pensions while management gets outrageous bonuses. The rich and corporations have as a political party for their greed, the minorities and LGBT and immigrants have a party for their interest. That leaves the middle class at the mercy of the greedy. We need a third party in these elections for this Nation's and interest of middle class issues. The parties are not interested in doing things for this nation that would benefit ALL, instead of the special interests and lobbyists Corporations and the wealthy have benefit greatly with increase wealth. Then they move their money overseas. CEO now get the salary of sport players, yearly. NO SHAME HAVE THEY. TOO MUCH IS NEVER ENOUGH FOR THAT TYPE. If we had never had all those tax breaks, we could have better roads and benefits for the citizens of this nation. Time to raise the tax brackets and do alway with loopholes or put a income cap on them. Free Trade policies have continue to hurt this nation. We gave up our sovereignty when we signed NAFA and other trade pacts for all free trade with other nations.