On December 1, the Department of Labor’s new overtime rule will be implemented, affecting an estimated 4.2 million workers in the United States. For the past week, ProSales and its sister websites have been running a survey, asking for reader input about whether their companies have discussed the overtime rule, and what plans they have in place to combat it. 106 dealers completed the survey, and only half were aware of the rule, while a third were prepared for it.
Of those dealers that completed the survey, 51% said they’d read or heard about the rule, but hadn’t examined it closely, 10% hadn’t heard or read about it, and 35% of dealers know the rule well. 32% of respondents have plans in place to address the new rule, while 57% of dealers did not.
For a few of the dealers who answered the survey, the rule would have little impact due to having very few salaried employees. Others were prepared to either raise certain employees above the new salary cap, or just transition current employees to hourly while continuing with their same salary.
An issue that multiple respondents brought up was dealing with commissions. One dealer said that their company was prepared for having employees clocking in, “but we’re still unsure on commission sales.”
Another felt that the rule covering commissions was just too confusing. “The biggest problem I ran into was understanding commission. I threw in the towel and said we will no longer pay commission. It is too convoluted to understand and do correctly.”
One dealer is keeping commissions and raising employee salaries to meet the new minimum. The commissions at this company will now kick in once they’ve sold above their new base pay.
Most of the anonymous comments we received were lamenting the deal as a whole, with one dealer meeting with employees individually to figure out the best way forward and saying, “This is worse than a change in the minimum wage. Complete ignorance and incompetence from the powers in charge in DC. One more nail in the coffin for free enterprise in the USA.”
Another dealer opined, “My salaried guys will be working less because if I have to pay overtime, it’s cheaper to pay my hourly people overtime at their pay scale. I can’t afford to bump everyone’s salary by $8,000 to $10,000 annually. We may hire more part time people to avoid most overtime, which increases our work in HR. I realize that’s an argument that was made in favor of this madness, but when it means that almost everyone’s hours ultimately get cut, it actually results in a reduction of income for many of my guys.”
The new Department of Labor rule takes affect Dec. 1
