In Washington, a classic debate over pay for dealership service advisers
|Christina Rogers covers VW and regulatory/legislative issues for Automotive News.|
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Attention dealership service advisers: A regulatory tussle is developing in Washington that could affect your paychecks.
Last year, the U.S. Labor Department decided it no longer wanted to exempt service advisers -- the folks on the front lines of selling service work to customers -- from federal overtime rules, i.e. the right to collect time and a half.
Service advisers had been exempt from the rules for more than three decades. Although not directly involved with selling cars, service advisers were classified as sales staff, meaning dealerships weren't required by law to pay them OT if they worked more than 40 hours a week. (Mechanics and parts salespeople also are excluded from federal OT rules.)
But the Labor Department, under the Obama administration, decided to reverse course. In a notice published last year, the department said it was siding with the AFL-CIO and other workers' rights groups in their interpretation of the rules, which says service advisers should be eligible for overtime pay.
The change, while not trumpeted in the headlines, could affect an estimated 45,000 service advisers -- also known as service writers, service managers and service salespeople -- in dealerships across the country, according to the National Automobile Dealers Association.
Of course, not everyone is pleased with the change -- especially dealers.
NADA is fighting it and has backed a legislative provision, also known as a rider, that would keep service advisers excluded through the 2013 fiscal year.
Bailey Wood, NADA's legislative director, said the Labor Department's directive undoes three decades' worth of enforcement policy, not to mention at least three federal circuit court decisions that have upheld it.
The change also would complicate matters for dealers in complying with federal employment laws and open a lot of smaller businesses up to litigation, NADA said.
"We are not taking overtime away from service advisers," Wood stressed. "They have been exempt for 30 years."
The provision is attached to the labor, health and human service funding bill, which was voted out of a House subcommittee this week.
Of course, the whole funding package -- of which this is a tiny part -- will have to go to a full committee first, then to the House floor.
Whether the provision will survive a full House vote and then get the blessing of the Democratic-controlled Senate remains to be seen. And then the president will have to sign off on the legislation.