Doing It Right: Pay Plan Best Practices | Compli.com

Doing It Right: Pay Plan Best Practices

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Article: Doing It Right: Pay Plan Best Practices

Article Date: Wednesday, January 5, 2011

Author: Compli

Article Source: Dealer Digest Daily

november_8th_2010-pay_plans_ddd_doing_it_right.pdf

Pay Plan Best Practices

Pay Plans are Wage & Hour documents that must comply with state and federal law and are a common liability among dealerships. Now is a great time to re-evaluate your dealership personnel Pay Plans to ensure that they follow the Best Practices listed below:

• Every employee should have a written Pay Plan, signed and dated by the employee.
• A Pay Plan should be drafted so that a lay person, unfamiliar with the car business can understand it.
• The Pay Plan should spell out IN DETAIL exactly how the employee will be paid (salary, draw, commission, etc…) and each component will be calculated.
• The Pay Plan should include all aspects of compensation: hourly, salary, commission, bonuses, spiffs, etc…
• Special weekly or monthly bonuses and contests should be documented as completely as other aspects of the Pay Plan.
• If you include a “guarantee,” make it clear that it is a guarantee of compensation not employment.
• The Pay Plan should state whether or not the employee is exempt from overtime and whether or not the employee will be paid overtime.
• The Pay Plan should be revised and re-signed whenever the Pay Plan is changed.

For more information on Pay Plans, view a recording of Compli’s “Pay Plans: Best Practices, Rules & Misconceptions Webinar,” Click here to view now.