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We just opened a independent car dealership in TN, can sales…

Customer Question
We just opened a...

We just opened a independent car dealership in TN, can sales people be commission only? Or if they dont sell something can they receive no compensation?

Lawyer's Assistant: Is the employment agreement "at will," union, full time or part time?

Full time selling cars

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

Thats all

Submitted: 8 months ago.Category: Employment Law
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11/14/2017
Employment Lawyer: Legal Eagle, Lawyer replied 8 months ago
Legal Eagle
Legal Eagle, Lawyer
Category: Employment Law
Satisfied Customers: 13,417
Experience: Licensed to practice before state and federal court
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Hello! I am a licensed attorney, admitted to practice in state and federal court. I have a nearly 100% satisfaction rating (click here for more info) so all that means is that you can count on me to help today. Because I want to provide you with the most accurate answer possible, do you mind if I take a moment to review your question?

Please keep in mind that our conversation does not include an attorney-client relationship and this is for general information purposes only.

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Customer reply replied 8 months ago
we just opened a independent car dealership in TN, can sales people be commission only? Or if they dont sell something can they receive no compensation?So do we have to pay say minimum wage whether they sell something or not or can they be straight commission? If we do have to pay a base can it be less then minimum wage?
Employment Lawyer: Legal Eagle, Lawyer replied 8 months ago

Thanks so much for your patience. Let me check on something to see if your business has an exception...

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Employment Lawyer: Legal Eagle, Lawyer replied 8 months ago

Thanks so much for your patience. So, TN law says that employers must pay their employees a minimum wage of $7.25 per hour. This means that even if you provide commissions, you have to pay minimum wage. The only way that you could get around this is if you turn the employees into independent contractors. You do not owe independent contractors anything more than what you agree to pay them. If it is only commissions, then that's all you have to do. There are some exceptions, but it's usually for employees that are "tipped" like at a restaurant. What other questions did you have for me?

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Customer reply replied 8 months ago
If the salesperson works 60 hours a week do you have to pay overtime?
Employment Lawyer: Legal Eagle, Lawyer replied 8 months ago

Yes, but it depends on two factors:

1. If they are hourly or salary.

2. if they are salary, they get overtime if they make less than $455 per week.

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Employment Lawyer: Legal Eagle, Lawyer replied 8 months ago

What other questions did you have for me today?

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Customer reply replied 8 months ago
They are commision sales people that are employees, so we will pay minimum wage every 2 weeks unless there commissions exceed min wage, however they work around 60 hours a week so would we have to pay overtime in the event the commision didn't exceed min wage?
Employment Lawyer: Legal Eagle, Lawyer replied 8 months ago

Bear with me a moment....

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Employment Lawyer: Legal Eagle, Lawyer replied 8 months ago

Hi, ok, I did my best to try to review information form my sources, but this last question is extremely perplexing. TN doesn't have much information on this specific situation either which is a bit odd. My recommendation would be to contact your department of labor to find out what you need to pay in the event that they work beyond 60 hours, but have commissions that don't exceed minimum wage. My apologies. What other questions did you have for me?

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