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Supreme Court Sends Overtime Issue Regarding Service Adviser’s Exemption Back to the 9th Circuit

While the U.S. Supreme Court continues to be down one judge, the high court has been holding out on taking strong positions on new issues, such as whether auto service advisors should qualify for overtime compensation under the federal Fair Labor Standards Act (FLSA).

While the FLSA defines overtime as any time spent working after eight hours a day or forty hours a week and requires employers to pay their workers one and one-half times their normal hourly wages for all the overtime they work, the law also allows certain employees to be held exempt from the requirement for overtime compensation. One of the categories of employees that qualify for the overtime exemption under the FLSA is the professional category, which includes any employee whose job requires them to have a particular set of skills or level of education. This category is generally understood to include mechanics and salespeople, among others, but the question currently at hand is whether auto service advisors qualify for the professional category.

Auto service advisors neither sell vehicles nor perform maintenance on them. Rather, they consult with customers as to whether they need service performed on their vehicle, and if so, which services they need. As a result, auto service advisors can’t be qualified as mechanics, although their job requires them to have a similar knowledge base and skillset to mechanics. They also don’t quite fit into the sales category, although their job does mean they play an important role in the sale of services, rather than vehicles, to customers.

Having previously determined auto service advisors do not qualify as exempt from overtime under the FLSA, the U.S. Department of Labor (DOL) changed its mind in 2011 and ruled that they are eligible for overtime compensation.

When a class of auto service advisors filed an overtime lawsuit against their employer for allegedly failing to pay them the proper overtime compensation when they worked more than 40 hours a week, the dealership argued their job description exempted them from overtime compensation. The case reached the U.S. Supreme Court, which rejected the DOL’s decision that auto service advisors were entitled to overtime compensation. However, the Court did not go so far as to say the auto service advisors qualified as exempt from overtime under the FLSA. Instead, the court sent the case back to the Ninth Circuit Court of Appeals, leaving it to the lower court to determine whether the employees qualify for the overtime exemption provided by the federal law.

In its decision, the Supreme Court said the DOL failed to sufficiently explain how the FLSA could exempt employees who sell vehicles, but not those who sell services on vehicles. The line is a fine one and the Ninth Circuit Court’s decision will have consequences for auto dealerships all over the country. If it decides auto service advisors do not qualify as exempt from overtime compensation as defined by the FLSA, then dealerships across the country may have to reclassify their auto service advisors as nonexempt and pay them accordingly.

The Chicago overtime law attorneys at the Chicago Overtime Law Center have three decades of experience fighting to help employees who are victims of wage, overtime and tip theft by their employers. We have a team of Chicago unpaid overtime lawyers who concentrate on prosecuting state and nationwide class action lawsuits. Our attorneys work out of Chicago and Oak Brook offices and pursue claims for workers all over the Chicago area including Elkgrove Village and Hoffman Estates. We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Kendall, Lake, McHenry, Kane and Cook Counties.

Our Cicero and Maybrook overtime and employment lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers mis-classify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.

The Chicago Overtime Law Center is based in Chicago and Oak Brook, and represents clients throughout the country who have unpaid overtime and other employment right claims.