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Final Verdict: Service Advisors Exempt From Overtime Rules

Service advisors greet customers bringing their cars in for service, evaluate the customer’s service needs based on their complaints, and sell the customer supplemental services beyond the immediate complaints. There has been quite a bit of back and forth whether those advisors should be exempt from the overtime rules set forth in the Fair Labor and Standards Act (FLSA). A definitive answer has now been provided by the U.S. Supreme Court.

The FLSA exempts “any salesman, partsman, or mechanic primarily engaged in the selling or servicing automobiles” from overtime requirements. The Department of Labor (DOL) initially published that service advisors were not exempt from overtime rules but then later decided they were. Finally, relying on the absence of express language referencing service advisors, the Department of Labor decided that service advisors were not exempt. When the DOL reached that decision, many service advisors sued to recover overtime wages that they had not been paid previously. The cases have been up and down the courts before reaching a fully formed U.S. Supreme Court this term.

In its decision, the Supreme Court held that the service advisors were exempt based on a plain reading of the statute’s language. According to that language, a salesman who primarily engaged in servicing automobiles was exempt and service advisors necessarily fall within that category. They sell customers on services for their cars and they are an essential part of getting cars serviced. The Court also rejected the premise that FLSA exemptions should be interpreted narrowly. Instead, FLSA exemptions should be construed under a “fair (rather than narrow) interpretation.”