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HR Compliance Tracker

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Big changes are happening in the realm of workplace compliance issues and labor laws in the United States. Noncompliance with government regulations can have serious consequences—and can cost your business big time. Keep up with what's happening between the government and the workplace with the HR Compliance Tracker: your go-to place to stay updated on some major workforce compliance issues.

 

SCOTUS puts its foot down on FLSA construction language

In a 5-4 decision, SCOTUS ruled in Encino Motorcars, LLC v. Navarro that the Fair Labor Standards Act (FLSA) exempts service advisors at car dealerships from the act’s overtime requirements. Typically, the FLSA requires employers to pay overtime to employees who work more than 40 hours a week. Some employees are exempt from the rule including “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks or farm implement.” But what about employees who consult with customers about servicing needs?

The District Court ruled that service advisors are exempt. However, the Ninth district ruled otherwise, sticking to its assertion that FLSA exemptions should be narrowly construed. While service advisors are considered “salespeople”, they aren’t engaged in “servicing automobiles, as they do not actually repair and maintain vehicles.” The Court rejected the Ninth Circuit dependence on statutory interpretation. This decision solidified that exemptions should be construed as plainly as its written, shedding light for all employers asserting the application of any FLSA exemption.

Topics: FLSA, HR News