Supreme Court To Decide If Service Advisors Get Overtime Pay

The U.S. Supreme Court will decide if dealership service advisors must be paid overtime. The source of this issue is a lawsuit from five service advisors who sued Mercedes-Benz of Encino, California in 2012 for alleged violations of the Fair Labor Standards Act.

Back in March 2015, the 9th District court of California ruled service advisors should be eligible for overtime pay, citing U.S DOL language, which excludes only mechanics and salespeople from overtime compensation. According to Law360, the service advisors noted in the original suit, “Their job descriptions required them to greet and liaise with car owners, while always attempting to sell additional services beyond what prompted the customer’s visit, but asserted that they did not sell cars or perform repairs.”

The 9th District court heard the case after a lower court sided with the Mercedes-Benz dealer, who felt service advisors should have been defined as sales employees who work on commission.

According to a Law360 article about the case, “The dealership alleges that decades of legal precedent holds that the service advisers are salespeople who are paid by commission ­– not by the hour – based on the amount of vehicle servicing work they convince customers to purchase, not on the number of hours they are on the floor.”

Interestingly enough, Law360 reports indicate the service advisors who sued the dealership didn’t want the Supreme Court to take up the case. However, Mercedes-Benz of Encino reportedly wanted the highest court to look at the case in order to “restore uniformity” to labor laws and settle the issue once and for all.

Should service advisors be considered dealership salespeople or employees eligible for overtime? We will keep you posted as this story unfolds.