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  • When Do You Qualify For Overtime At A Car Dealership?

    July 09, 2020

    Employment Law

    Earning overtime can really help out when the car dealership is light on business. You may have trouble hitting your monthly targets when the lot is dry, but not everyone qualifies for something extra on their check.

    Overtime isn’t for everyone, and even California labor laws leave people out of the loop. Car dealership employees are one of those groups that may find themselves stuck in the gray area. It can be hard to know when you should be getting overtime since the formula can change depending on the service you provide.

    Exemption from overtime

    The first step is knowing what makes you exempt from the overtime rules. If your hourly earnings come out to more than one-and-a-half times California’s minimum wage, then you are likely exempt from the bump in pay. The other big qualifier is getting more than half your compensation in commission, which may not be as easy to define.


    If your paycheck depends on getting cars out the door, you might not be in the running for overtime. Generally, salespeople fall into the exempt category because of the big role commissions play in their paycheck. If you rely on the volume, value and profits of your sales, then you’re likely exempt. But you may still have a case once your hourly earnings dip below the acceptable threshold.

    Service advisors

    Service advisors have made a pitch in the past for overtime, but it is no small feat to neatly define the position as either services or sales. The Supreme Court ruled this is a sales position since it hinges on customer interactions and leads to a percentage of service charges. This makes it exempt under federal law, but California could say differently depending on your position and payment structure.


    While a mechanic may earn a percentage of what the dealership charges, that may not fall in line with what California considers commission. Since there is no customer interaction and you’re performing the service, you could still get overtime. It doesn’t matter if your dealership throws the word commission around when talking about your payment.

    Understanding where you fall in terms of overtime isn’t always easy, but it can be essential when times are tight. Know what laws apply to your share of the dealership duties, and you could have a case for underpaid wages.

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