You may have heard about the so‑called new “overtime” rule, which the U.S. Department of Labor announced on April 23. You also may have heard that the new rule will require employers to increase the annual salary paid to certain employees. And you may already know that employees who are not now eligible for overtime pay under the “old rule” may be eligible for OT under the new rule, if it survives legal challenges. What you probably want to know now is how the new rule could affect your dealership. You have come to the right place. Spoiler Alert: The rule change should have minimal impact on most dealerships — but you should still take this opportunity to review the new requirements and how they might impact your business. Here’s what you need to know and what you should do before the effective dates. CHANGES IMPACT WHITE-COLLAR EXEMPTIONS ONLY Review the current overtime rules. This is a good starting place for understanding what the new rule does and does not change. Federal law (and many state laws) requires most employers to: • Pay most employees at least minimum wage for all hours worked in a workweek; • Pay them an overtime premium for all hours worked over forty in a workweek; and • Maintain proper records of their hours worked and pay. Most of these laws, however, partially or completely exclude or exempt qualifying employees in certain job positions from some or all the requirements listed above. For example, qualifying dealership service technicians, service advisors, parts counterpersons and salespersons are exempt from the federal law’s overtime requirement, but they are not exempt from the law’s minimum wage and recordkeeping requirements. Importantly, and as explained in this article, the new rule does not apply to or impact partially exempt employees, even if they have a salary component in their pay plans. WHAT YOUR DEALERSHIP SHOULD KNOW AND DO ABOUT THE NEW FEDERAL OVERTIME RULE BY TILLMAN COFFEY, ESQ. AND TIMOTHY SCOTT, ESQ. FISHER PHILLIPS THE GENERATOR 18
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