Professional Service Agreement

U.S. Supreme Court Rules Dealership Service Advisors Fall Within Federal Overtime Exemption

April 09, 2018

The U.S. Supreme Court recently held that dealership service advisors fall within the "salesmen, partsmen, and mechanics" overtime pay exemption under the federal Fair Labor Standards Act.

In doing so, it reversed a January 2017 decision by the Ninth Circuit Court of Appeals that held — in direct conflict with several other federal and state decisions — that the exemption did not apply. This decision is at odds with a 2011 Department of Labor (DOL) regulation that service advisors did not meet the requirements to be exempt under the statute.

To be exempt from overtime, the "salesmen, partsmen, and mechanics" exemption requires only that covered employees spend over 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).