The parent company of a local car dealership paid more than $85,000 in back wages it owed to its sales staff at 10 of its 30 locations, including Zeigler Ford at 2100 Harlem Ave. in North Riverside, following an investigation by the U.S. Department of Labor.
On March 31, after an investigation by its Wage and Hour Division, the Department of Labor announced it had recovered $85,111 for 214 employees of the Kalamazoo, Michigan-based Harold Zeigler Auto Group.
Federal investigators found the company in violation of the Fair Labor Standards Act by failing to ensure sales consultants’ commissions covered at least the federal minimum wage for all of the hours they worked each month, misclassifying some salaried employees as exempt from overtime and then not paying them for overtime work and failing to maintain accurate payroll records.
“Employees paid on commission basis must earn at least the federal minimum wage per hour of work completed. If they do not, employers must make up the difference,” said Mary O’Rourke, district director of the Department of Labor’s Wage and Hour Division in Grand Rapids, in a press release. “Our investigation put money into the pockets of workers who were underpaid and levels the playing field for employers who play by the rules. Other employers in this industry should use this investigation as an opportunity to review their own pay practices and avoid similar violations.”
The investigation determined that Zeigler Auto Group underpaid 80 sales consultants at 10 locations in Michigan, Indiana and Illinois. One of the locations where sales staff were underpaid, according to the Department of Labor, was Zeigler Ford in North Riverside.
Zeigler Auto Group took over the Ford dealership at 2100 Harlem Ave. in 2018 when it bought the business from Chicago-based McCarthy Ford.
Last July, the company won a generous financial incentive from the village of North Riverside when the village board approved a deal that will rebate 50 percent of sales taxes on vehicle sales at Zeigler Ford for the next 20 years.
In exchange for the rebate, Zeigler promised the village it would remain at the North Riverside location for 20 years. In addition, the company pledged to undertake an expansion of the dealership’s showroom and inventory, saying those measures would make up for the rebate by increasing sales.
Also last July, Zeigler Auto Group purchased the seven-acre dealership property for $8 million from Rizza Auto Group, which had owned the land since the late 1970s. According to the terms of the sales tax rebate agreement, Zeigler has three years from the property’s purchase date to begin improvements to the dealership.