CLIENT UPDATE

Putney, Twombly, Hall & Hirson LLP
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New York, NY 10175
Tel: (212) 682-0020

 

January 19, 2016

The Supreme Court to Determine Whether Service Advisors are Exempt from Overtime

On January 15, 2016, the United States Supreme Court agreed to review whether service advisors are properly classified as exempt from the overtime requirements of the Fair Labor Standards Act (FLSA).  The exemption applies to “any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles.”  The Ninth Circuit Court of Appeals had ruled against a California car dealer based upon a 2011 rule from the United States Department of Labor that had excluded service advisors from the exemption because they did not personally service the vehicles.  Other courts of appeals had ruled in favor of the exemption for service advisors.

It is important for dealers to remember that irrespective of how the Court rules, service advisors will remain eligible for modified overtime under New York State law.  Specifically, New York requires employees to receive at least the minimum wage for hours worked under 40 hours per week and time and one-half the minimum wage for hours worked in excess of 40 hours per week. 

A decision is likely to be handed down by the end of June. The case is Encino Motors LLC v. Navarro, U.S. Docket No. 15-415, cert. granted, 1/15/2016.

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We’ll keep you apprised of developments.  If you have any questions regarding exemptions, overtime or other wage and hour issues, please do not hesitate to contact us.