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Service advisors fall within federal overtime exemptions: High court

April 6, 2018
The U.S. Supreme Court on April 2 ruled that auto service advisers aren’t covered by the Fair Labor Standards Act’s overtime pay requirement, nearly two years after the justices issued a limited ruling in the same case that didn’t address that central question.
The 5-4 decision in Encino Motorcars vs. Navarro reverses a 9th U.S. Circuit Court of Appeals ruling that the Mercedes-Benz dealer in Encino, California, owed five defendants back pay for working 55-hour weeks.
The Fair Labor Standards Act in 1940 established the standard 40-hour workweek.
The majority decision said service advisers and parts department employees sell goods and services and do not physically repair vehicles; the minority argued that service advisers neither sell nor repair automobiles and should not be covered by the exemption.
To be exempt from overtime, the "salesmen, partsmen, and mechanics" exemption requires only that covered employees spend more than half their time working as a "salesmen, partsmen, or mechanics," regardless of how or how much they are paid (so long as they are paid minimum wage for every hour worked).
 
 

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