Is a Car Salesman Exempt From Minimum Wage?

Labor laws can be complicated and confusing, creating special provisions for independent contractors and certain types of employees. It can be difficult to know which rules apply to which professions and who is exempt from certain legal provisions. Although they can earn commissions, car salesmen are required to earn minimum wage but only when certain conditions are met.

Federal Minimum Wage

Under the federal law known as the Fair Labor Standards Act, car salesmen and other employees must be paid at least minimum wage if the company that employs them earns at least $500,000 in gross annual sales. Minimum wage must also be paid to employees and salespeople who regularly conduct interstate transactions. A car salesman must be paid minimum wage whenever either of these two conditions is met. Car salesmen may, however, be exempted from the overtime pay requirements of the FLSA under certain conditions.

State Minimum Wage

Many states have their own labor laws which differ from federal laws. States can enact a minimum wage that is higher than the federal minimum wage. When this is the case, car salesmen must be paid the higher state minimum wage.