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News, knowledge, and insights for the automotive industry.

Good News From The Supremes

On April 2, 2018, the U.S. Supreme Court issued its long awaited decision in Encino Motorcars, LLC v. Hector Navarro, finding that Service Advisors at auto dealerships are exempt from the Fair Labor Standards Act’s (“FLSA”) overtime pay requirement. That means that, under the FLSA, automotive dealerships need not pay their Service Advisors time-and-one-half for hours worked beyond forty hours in a workweek.

Pay Plan Modification Alert: All Commission-Based Compensation Plans Must Separately Account and Pay for Rest Periods

On February 28, 2017, in Vaquero v. Stoneledge Furniture LLC, a California Court of Appeal found that employers are required to separately calculate and pay compensation for rest periods for employees receiving commission based pay. The plaintiffs in Vaquero were commission-based salespeople at a furniture store. Each pay period, they received sales commissions plus, if necessary, a draw against future commissions bringing pay to at least $12.01 for each hour worked in the pay period.

US Supreme Court Orders 9th Circuit to Reconsider Service Advisor Overtime Exemption

On Monday, the US Supreme Court ordered the Ninth Circuit to reconsider whether Service Advisors are exempt from overtime under the Fair Labor Standards Act (FLSA). SCOTUS issued its Order with direction to avoid taking the US Department of Labor’s most recent regulations into account, finding the regulations were issued without adequate explanation.