General Rule: Unless a specific exemption exists, an employee must be paid at least the federal minimum wage ($7.25 per hour) and overtime at 150% of normal rate for hours worked in excess of 40 in a week. The PA state minimum wage is also $7.25 per hour, unless a specific exemption exists.

To be exempt from overtime, all of the requirements in a category must be met to qualify for that particular exemption.

Salesperson Exemption:
Must spend at least 50% of their time performing their specified duties to be exempt from overtime. Salespeople make sales or obtain orders/contracts for the sale of automobiles, trailers or trucks. Work performed incidental to and in conjunction with a salesperson’s sales or solicitations (i.e., deliveries and collections) fall within this exemption.

Commission Exemption:
Commissioned employees are compensated by commission for either sales made or services performed. The employee’s regular rate of pay must exceed 150% of the applicable minimum hourly rate. More than half of the employee’s compensation for a period not less than one month must derive from commissions on goods or services.

Mechanics and Parts Persons: 
Generally exempt from overtime pay requirements.
1. Mechanics - Individuals primarily performing mechanical work. Typically, this includes service mechanics, and body shop mechanics. The following are among those activities not considered mechanical: painting, cleaning, polishing, tire changing and lubrication.
2. Parts Persons - Individuals whose primary duties include ordering, stocking, pulling and selling of parts. Parts delivery people do not qualify for this exemption.

Salaried Employees:
1. There is no exemption from minimum wage or overtime provisions simply because an employee is paid on a salary
basis.
2. There are additional exemptions for executives and administrative employees. Strict tests are set forth in law for these exemptions.

The above information applies to new and used automobile dealerships. Dealers may wish to consult NADA’s Management Guide, “Federal Wage-Hour Law and Equal Pay Act.”