Department of Labor Clarifies Position on Service Advisors Classification

April 8th, 2011 by

On April 5th, the Wage and Hour Division of the U.S. Department of Labor clarified that service advisors are not exempt from overtime. While the current regulations states “a service manager, service writer, service advisor or service salesman who is not primarily engaged in the work of a salesman, partsman or mechanic is not exempt” (29 C.F.R. § 779.372(c)(4))”, beginning in 1987, the Department had adopted an enforcement position that did not deny exemption from overtime payment.  The Department has reversed this enforcement position and dealerships are advised to take into account all earnings for service advisors during the relevant time period including salary plus any commissions to determine the appropriate amount of overtime pay which may be due.

A more complete review of the new enforcement position is available from our partner,  Ford & Harrison at http://www.fordharrison.com/shownews.aspx?Show=7117

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3 Responses to “Department of Labor Clarifies Position on Service Advisors Classification”

  1. Peter Green says:

    Surely this does not apply to Service Advisors employed in California Auto Dealers. What does John Boggs say?

    Peter Green
    Tustin Toyota

  2. The Fair Labor Standards Act has always considered service advisors non exempt, however the Department of Labor had not been enforcing this actively. The new position indicates they will begin enforcement. It is highly possible that the matter will end up in court since this is a significant change. KPA and our partner, Ford and Harrison, will continue to monitor the situation and provide updates as additional information become available.

  3. The Fair Labor Standards Act is federal law however the new DOL enforcement position is certain to be challenged in court, as in the past some court have found that service advisors are exempt. KPA and our parters, Ford & Harrison and Fine, Boggs & Perkins will be monitoring this issue with additional updates to follow.

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