Supreme Court Finds Car Dealership Advisors Exempt from Federal Overtime Rule

Earlier this month, the Supreme Court ruled that service advisors at automobile dealerships are exempt from the Fair Labor Standards Act (“FLSA”). The opinion was not one to attract much attention, except perhaps to a handful of employment lawyers with automobile dealerships as clients, but it was a useful reminder that federal labor laws are not as universal as many might expect.

In Encino Motorcars, LLC v. Navarro, Justice Thomas reasoned that there was no reason not to consider service advisors as salespersons engaged in the servicing of automobile.  The FLSA specifically exempts salesmen, parts workers, and mechanics employed by automobile dealerships.

Most businesses are probably aware that salaried executives, professionals, and many administrative employees are not entitled, at least under the FLSA, to overtime pay if the business has more than $500,000 in gross sales or is engaged in interstate commerce.  However, the list of exemptions is actually quite larger.  So are computer professionals who earn at least $27.36 an hour, most commission-based sales employees provided their earnings average at least 1.5 times the minimum wage, and farm workers employed by certain small farms. Further guidance is currently available from the U.S. Department of Labor.

By William Horne

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Posted in: Business Law

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