John Stewart
Mon, 08/09/2021
The new Virginia Overtime Wage Act (“VOWA”), which went into effect on July 1, 2021, may catch some Virginia car dealerships off guard. As car dealership employees buckle down for the upcoming Labor Day sales crunch, many will find themselves newly entitled to overtime pay for their work.
Under VOWA, as well as the federal Fair Labor Standards Act (“FLSA”), employers generally must pay an employee at one and one-half times his or her regular rate of pay for all overtime work in excess of 40 hours in a workweek. Both laws incorporate several categories of exempted employees, to whom the overtime premium pay requirements do not apply.
For example, under the FLSA, employers are not required to pay overtime to any “salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements,” employed at a “nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers.” 29 U.S.C. § 213(b)(10)(A). As defined by the applicable Department of Labor regulations, “salesmen” include those with the primary duty of making sales, obtaining orders, or obtaining contracts for the sale of automobiles. “Partsmen” include those with the primary duty of requisitioning, stocking, and dispensing parts. “Mechanics” include those with the primary duty of doing mechanical repair work. Many auto dealerships, unfortunately, rely on this exemption to exclude their employees from the FLSA’s overtime pay requirements.
As of July 1, 2021, however, VOWA permits employers to exempt only a subset of the employees that the FLSA exempts from overtime protections. Specifically, VOWA exempts only: types of nonprofit volunteers, employees exempt under “29 U.S.C. § 213(a),” and employees exempt under “29 U.S.C. § 213(b)(1) or 213(b)(11).” Va. Code § 40.1-29.2(A), (D). Under VOWA, unlike the FLSA, all other employees must be paid overtime premium pay for their overtime work. In other words, the Virginia law does not permit employers to rely on § 213(b)(10), which sets out the exemptions commonly relied on by dealerships to exempt sales automotive dealership employees.
VOWA marks an important step for the rights of auto dealership employees in Virginia, but Virginia is not the only state to expand overtime protections beyond the federal FLSA. Many states, including Alaska, California, Connecticut, Hawaii, Illinois, Massachusetts, Montana, Nevada, New Jersey, New York, and Vermont have adopted state laws altering or eliminating the FLSA’s overtime exemptions for auto dealership employees.
If you have questions about overtime pay for auto dealership employees or think you may not have been fully compensated for your work, please contact us at info@mselaborlaw.com.
