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Posts tagged "Car Dealer Employees Salesman Overtime FLSA"

Are car dealer employees exempt from overtime compensation requirements of the Fair Labor Standards Act?

In Encino Motorcars, LLC v. Navarro, the Supreme Court was recently asked to determine if the Department of Labor could change its mind a second time whether car dealer employees selling service contracts were exempt from overtime compensation requirements of the Fair Labor Standard Act! (FLSA) In 1966 Congress enacted an exemption under the FLSA for overtime requirements at covered dealerships for "salesman . . . primarily engaged in selling or servicing automobiles." In 1970, the Department interpreted this provision and issued regulations defining "salesman" to mean a salesman engaged in selling vehicles but excluded service advisors who sell repair and maintenance contracts. After several courts rejected this interpretation, the Department changed its policy in 1978 and allowed the application of the exemption to service providers. Unexpectedly, the Department issued a final rule in 2011 removing the exemption for employees selling service contracts which had been relied on by dealers for thirty-three years! 

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