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Failure to Pay Commissions to Car Sales Employees – North Carolina Wage and Hour Attorney


Most car salesmen work on a commission where they receive between 20-30% of the profit for the dealership. However, Maginnis Howard is investigating situations in which dealerships are not paying their sales employees a percentage of their actual profit and not following their written compensation policies for employees.

Maginnis Howard recently filed a class-action complaint against Parks-Michael Automobile Group that alleges that Parks-Michael and its dealerships such as Capital Ford failed to pay commissions to its sales team on document fees or “doc fees.” These fees in North Carolina are on-average $599, are essentially pure-profit for the dealership and are almost NEVER waived for the customer. This means that the sales person should be receiving the commission on these funds; after all they’ve often had to reduce the sticker price on the vehicle or increase the trade-in value in order to make the deal work because the doc fee cannot be waived. If your dealership should be paying you commissions on document fees, that would be an extra $100-$200 in your pocket for every car you’ve sold.

It is important to note that dealerships probably have a right to carve-out certain fees from their commission policy, so long as those carve-outs are disclosed in writing. In North Carolina, any changes to a commission policy must be in writing. A dealership must disclose to its sales personnel what they are being paid for.

Maginnis Howard would be glad to review any written compensation policy for an employee of an automobile dealership to see if you are receiving your fair share. This would include compensation for additional profit line-items such as destination fees, lot fees, administrative fees or any other markup fee that is actually profit for the dealer. Compensation policies are often just a sheet of paper given to employees. If you have a copy of that, we are happy to review it at no cost to you.

If you are a car salesmen who has questions about your commission policy, you can reach the Raleigh wage and hour commission attorneys at Maginnis Howard at (919) 526-0450 or fill out our contact form here.

All consultations are free and confidential.  Should you choose to hire our law firm, all representations in automobile sales commission cases can be done on a contingency basis. This would include class action representation or taking your case on individually. A contingency basis means that you do not pay any attorney fees to us; we only recover from the defendants who have wronged you.