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Michigan-based auto dealer caught not paying minimum wage to sales team

Phoebe Wall Howard, Detroit Free Press on

Published in Automotive News

DETROIT — Zeigler Auto Group, which has a presence in three states with headquarters in Kalamazoo, has been ordered to pay 214 employees a total of $85,111 in minimum wages and overtime back wages following an investigation by the U.S. Department of Labor.

Federal investigators determined that the auto dealer failed to ensure its commission-based sales consultants earned a $7.25 federal minimum wage at 13 Michigan, Indiana and Illinois locations.

Sites with violations included Ford, Mercedes Benz and Infiniti dealerships.

Investigators noted violations involving 80 sales consultants specifically at 10 locations. In Michigan, they are Zeigler of Kalamazoo, Zeigler Motorsports, Zeigler of Grandville and Zeigler of Plainwell. In Indiana, Zeigler Ford of Elkhart. In Illinois, Hoffman Estates Mercedes Benz, Hoffman Estates Infiniti, Zeigler Nissan of Gurnee, Zeigler of North Riverside and Zeigler of Lincolnwood.

The other 134 employees who did not receive wages for which they were entitled held different jobs than sales, the department said.

U.S. Department of Labor investigators discovered that Zeigler Auto Group, based in Kalamazoo, failed to pay members of its sales team the federal minimum wage of $7.25 an hour. The company must pay $85,000 in back wages and overtime.

 

“Employees paid on commission basis must earn at least the federal minimum wage per hour of work completed. If they do not, employers must make up the difference," said Mary O'Rourke, wage and hour division district director in Grand Rapids.

“Our investigation put money into the pockets of workers who were underpaid, and levels the playing field for employers who play by the rules. Other employers in this industry should use this investigation as an opportunity to review their own pay practices and avoid similar violations," she said in a statement.

The federal agency found Zeigler violated the Fair Labor Standards Act when it:

—Failed to assure that sales consultants’ commissions covered at least the federal minimum wage for all the hours that they worked.

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