An appellate ruling in a recent overtime case favored Northwest Oregon and Washington automobile dealers at the expense of workers who were required to work long hours without extra pay. A federal appeals court reversed lower court decisions in Oregon and Washington holding that auto dealers could not classify finance and insurance managers aka "finance writers" as exempt workers ineligible for overtime pay. The 9th Circuit found that, under the FLSA, finance writers' work was an "integral part of the dealerships' retail business." Such workers are commonly paid by commission based on supplemental sales, such as roadside insurance plans, extended warranties, fabric guards and similar aftermarket products. (They are often found liable for consumer fraud, too, but that is a different subject matter entirely.)
In the Oregon case, Bennett v. Thomason Auto Group, the employer had been ordered to pay $75,100 in back wages to three such employees. Similar rulings went against a Ford dealership in Oregon and a Buick-Pontiac dealership in Washington. Each ruling was reversed on appeal.
In California, such employees, whose job duties include selling some of the most profitable products of the core business, would not be exempt under the administrative exemption, but they might very well be exempt under the commissioned sales exemption, which is available to employers subject to IWC wage order seven, applicable to the mercantile industry, whichn included automobile dealerships.
the commissioned exemption for "inside sales" is both in Wage Order 4 and 7 (section 3(D) of each).
(it was in Wage Order 5, too, for a few years after 2000, to take care of banquet managers, until they removed it.)
Posted by: lawguy | August 04, 2005 at 03:04 PM