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Supreme Court hearing: car dealerships and overtime pay

The Supreme Court frequently encounters cases that involve confusion over the exact definitions and wording within the law. One such case now requires the judges to closely review the Fair Labor Standards Act (FLSA) to determine exactly who is entitled to overtime pay at automobile dealerships.

The case, Encino Motorcars v. Navarro, asks the court whether service advisers at dealerships are exempt from overtime pay. The employees at Encino Motorcars, represented by Navarro, claim that they deserve overtime from the dealership under FLSA protections. The dealership, of course, disagrees that they are non-exempt.

Supreme Court judges heard arguments from each side about how the duties of a service adviser match the definitions within the act. FLSA dictates that certain occupations, namely salesmen and mechanics, are exempt from receiving overtime pay.

According to the employees, service advisers do not mainly sell cars, nor do they fix them. Instead, their main job is to counsel customers. Therefore, they do not fit into an exempt category. In response, the dealership believes that service advisers do parts of both jobs, which place them close enough to exempt positions.

Because FLSA is a law that dates back nearly a century, new jobs might not clearly fit into the categories for overtime pay. Confusion can arise particularly with the blended markets and shifting corporate structures of our modern age.

However, this doesn’t mean that employers will examine the law to figure out which employees likely deserve overtime pay. Instead, employers could unfairly assume that someone is exempt by taking a narrow view of their job description. If you believe you should earn overtime pay, you can consult an employment attorney to discuss your options.

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