Salespeople ‘In the Hole’ to Palmetto57 Auto Group Owed Unpaid Minimum Wages, Lawsuit Claims

New to ClassAction.org? Read our Newswire Disclaimer

The operating companies behind Florida’s Palmetto57 Auto Group are the defendants in a proposed class action filed over alleged wage and hour violations of the Fair Labor Standards Act (FLSA). The plaintiffs say defendants ML Automotive Group, LLC, NM1, LLC, and VW1, LLC pay their salespeople on a commissions-only basis. On a bi-weekly schedule, the complaint reads, the defendants advance each sales worker a short-term revolving loan of $800 or $1,000, what the auto dealers call a “draw,” from which various payroll deductions are withheld as if the amount were a true salary or wage. This “draw,” the plaintiffs allege, amounts to nothing more than a rolling debt employees must repay to the defendants, who the case says systematically collect repayments from subsequent commissions earned. According to the lawsuit, employees must repay the defendants “not only within the same bi-weekly pay period, but in subsequent periods, in perpetuity,” until the “draw” is satisfied in full.

“Neither the draw/loan, nor any subsequent earned commissions, bears any relationship to the actual number of hours worked by sales staff,” the complaint says.

Moreover, when a sales employee’s draw exceeds the commissions he or she has earned during a pay period, the defendants reportedly consider the individual “in the hole.” At the end of the day, the plaintiffs say, the defendants do not utilize their timekeeping records to determine or ensure that employees are paid at least the minimum hourly wage for every hour worked. 

“On numerous occasions during the period of time covered by this complaint,” the lawsuit reads, “the plaintiffs, and others similarly situated, generated fewer sales commissions than were necessary to cover the required minimum wage for all hours worked, or they sometimes were not paid all of their earned commissions and bonuses under the pretext that they were unqualified for such compensation as a result of being ‘in the hole’.”