when they work more than 40 hours in a workweek, which is the reason the change is called the “new overtime rule.” THE GOOD NEWS FOR YOU The “good” news is that the change applies to the white‑collar exemptions only. The other “good” news for retail automotive dealerships is that the change may have minimal impact because you likely employ relatively few employees who qualify for one of these exemptions. More good news is that many of the dealership employees who qualify for a white-collar exemption may already receive a salary that exceeds the new minimums in the rule. Dealership positions that often qualify for a white‑collar exemption include general manager, department manager, controller and human resources manager. Additionally, you should note that in qualifying circumstances, the salary requirement may be satisfied with the receipt of a guaranteed draw. Of course, as with all wage and hour exemptions, eligibility for a white-collar exemption is determined on a case‑by‑case, employee-by-employee basis. Importantly, the rule change does not require dealerships to increase the salary amounts of any employee who does not qualify for one of the white-collar exemptions. For example, salespersons, service advisors, finance managers and parts persons who have a salary component in their pay plan are not impacted by this rule change because they do not qualify for one of the white-collar exemptions. WHAT SHOULD YOU DO? Even though the new rule does not create any new legal obligations for employers until July 1, 2024, at the earliest, the rule has and will bring attention to wage and hour law compliance issues. For that reason, we recommend taking the following steps: • Conduct a wage and hour audit to determine compliance with both federal and applicable state laws. Keep in mind that employers have the burden of establishing that every employee for whom an exemption is claimed qualifies for the exemption. The receipt of a salary, standing alone, does not qualify an employee for an overtime exemption. Likewise, as with all exemptions, the job title, the job description and a dealership’s longstanding pay practice (or that of its competitors) is not determinative as to exempt status. • Plan for the implementation of the higher salary requirement for your white-collar exempt employees. Determine if you must increase anyone’s salary to maintain the white-collar exemption and your options if an increase is required. CONCLUSION Because wage and hour issues are often more complicated than they appear, we recommend you consult with legal counsel with dealership experience to assist with compliance issues. Your Fisher Phillips attorney will be happy to assist. If you have questions, contact your Fisher Phillips attorney, the authors of this Insight or any attorney on our Auto Dealership Team. The new rule will apply to and impact only employees who qualify for one of the complete exemptions known as the “white‑collar” exemptions. THE GENERATOR 20
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