On April 2, 2018, the U.S. Supreme Court issued a major decision relating to worker exemptions from overtime requirements of the Fair Labor Standards Act (FLSA). FLSA regulations have a major impact on TIA members, who are challenged to properly classify their employees as exempt or non-exempt, or face stiff financial penalties from the U.S. Department of Labor.
In the Supreme Court Decision, the Court found that “service advisors” working at a car dealership met an exemption requirement applicable to “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” Extending an exemption from overtime pay to service advisors, who provide customers with advice on what repairs and related services they should purchase, reverses an earlier decision by the Ninth Circuit Court of Appeals. The Supreme Court decision rejected the Ninth Circuit’s reliance on a presumption that exemptions from FLSA requirements should be construed narrowly against the employer.
Last year, the U.S. Department of Labor issued a Request for Information relating to a 2016 proposal by President Obama to dramatically expand eligibility for overtime pay. The 2016 proposed rule would have had dramatic impacts on TIA members of all sizes, who would have had to reexamine classifications for every employee, but was struck down by a U.S. Federal District Court judge in Texas prior to its implementation.
TIA filed comments on the 2017 U.S. Department of Labor’s Request for Information. Those comments encouraged the Labor Department to maintain a single federal standard (rather than separate regional or state standards), and to ensure that any changes to overtime regulations take into account industries with high-technology workplaces and industries where head-of-household salaries are secured by high achievers earning significant commissions or bonus incentive compensation.
TIA will closely monitor all issues relating to federal labor regulations. For more information, please contact TIA government affairs staff at advocacy@tianet.org or 703-299-5700.