Are Service Advisors in New York Entitled to Overtime?

The federal Fair Labor Standards Act (“FLSA”) and the New York State Labor Law (“NYLL”) require employers to pay employees overtime whenever they work over 40 hours in a workweek. The overtime pay rate, under both laws, is 1.5 times the regular rate of pay. So, for example, if an employee’s regular hourly rate is 14 dollars, but that employee works more than 40 hours during a certain week, then the employer must pay the employee 21 dollars an hour for every hour worked over 40. Today’s Long Island employment law blog discusses whether this overtime requirement applies to service advisors working automobile dealerships in New York.

One point that is different between the FLSA and the NYLL is the list of employees who are exempt from the overtime requirement. Being exempt means that the employee is not entitled to receive overtime pay. For example, employees who work at car dealerships as service advisors are one of the types of employees who are exempt from the federal overtime pay requirement, but not from the New York State law requirement.

Some employment agreements may also prevent an employer from simply turning their back to overtime pay requirements and may nevertheless require them to pay an employee overtime even if they are not required to do so under either the FLSA or NYLL.

On April 2, 2018, the United States Supreme Court, in Encino Motorcars, LLC v. Navarro, was confronted with an FLSA related question.

In Encino Motorcars, LLC v. Navarro, five employees who worked as service advisors at a Mercedes-Bens dealership in California, had sued the dealership in 2012 for failure to pay them overtime despite working, at a minimum ,55 hours every week. The service advisors, in addition to working directly with customers to sell them car repair services, also acted as the liaison between the customers who decided to service their car and the repair technicians working in the garage.

The district court and the Ninth Circuit Court of Appeals disagreed on whether or not the employees were entitled to overtime pay. The United States Supreme Court, after accepting to hear the case and originally kicking the case back down to give the Ninth Circuit another chance to decide the case, ultimately ruled in favor of the car dealership.

To decide to the case, the Supreme Court looked at the language of the FLSA which exempts “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” The majority of the judges decided that there was no doubt that service advisors are “salesm[e]n . . . primarily engaged in . . . servicing automobiles.” Therefore, the Court said the real question was whether service advisors are “salesm[e]n primarily engaged in . . . servicing automobiles.” However, the Court was not troubled much by this question.

While the Court acknowledged that service advisors didn’t “spend most of their time physically repairing automobiles,” they pointed to the broad range of tasks that service advisors perform and stated that they are “integral to the servicing process.” The Court also pointed out that partsmen, who are explicitly exempted from the FLSA, also do not “spend most of their time physically repairing automobiles.” Thus, the Court concluded that Congress intended to include at least some workers who didn’t physically repair cars and notably stated that “[i]f you ask the average customer who services his car, the primary, and perhaps only, person he is likely to identify is his car service advisor.”

Further, in rejecting the Ninth Circuit’s narrow reading of the FLSA, the Court noted that the statute clearly showed that a broader interpretation was intended by Congress because of the statute’s use of language such as “any” and“or.”

In sum, although the Supreme Court’s decision did not change anything for employees in New York, it is still important for employers and employees to understand the differences between the FLSA and the NYLL. Due to the several exemptions that exist and the differences between the federal FLSA and the NYLL, it may not always be clear whether a certain employee is entitled to reap the benefits of the law’s overtime pay requirements.

If you are wondering whether your employer is required to pay you overtime under either federal or state law, or if you have any other employment related questions, contact an employment lawyer at Famighetti&Weinick, PLLC at 631-352-0050 to schedule a free consultation. You can also contact us by visiting our website at at https://www.linycemploymentlaw.com or by finding us on Facebook. Se habla español!

Today’s Long Island employment law blog was written by Thalia Olaya, a Hofstra Law School intern.