NADA Issues Driven Guide on New Rules Defining Overtime Exemptions

The updates include the final rule the U.S. Department of Labor (DOL) published on April 23, 2024, that raises the minimum annual salary threshold for executive, administrative, professional, outside sales, and computer employees to classify those employees as exempt from overtime rules under the Fair Labor Standards Act (FLSA).

This minimum annual salary threshold will automatically increase every 3 years, starting in July 2027, based on a cost-of-living index. Also, nondiscretionary bonuses or commissions may satisfy up to 10 percent of the minimum annual salary threshold.

Additional Details: 

• The new rule’s dramatic increase in salary thresholds will require dealers to reclassify some exempt employees as non-exempt and require justification for classifying some employees as non-exempt.
• In addition to the updates related to the new salary threshold, the Driven Guide provides an overview of some basic requirements for new-car and-truck dealers to comply with the federal wage and hour, child labor, and wage discrimination laws. The Driven Guide covers topics including:
  • Minimum wage
  • Overtime
  • Exemptions
  • Salesmen and commission employees
  • Recordkeeping
  • Equal pay and compensation discrimination

The new overtime rule is in effect for employers. However, questions remain regarding the rule's viability in the face of legal challenges. Multiple lawsuits are pending in federal courts challenging DOL’s final rule. The federal courts may issue decisions on these legal challenges before the overtime rule’s second deadline on January 1, 2025.

NADA is providing a webinar, A Dealership Crash Course in Minimum Wage and Overtime Exemptions, on November 19, 2024, at 1:00 EST. To learn more about this rulemaking and other wage and hour exemptions, register here.  

Additional guidance on the revised rule is available below:

• NADA’s Compliance Alert on Final Rule - LOG-IN REQUIRED
• DOL Final Rule Webinar
• Final Rule: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees
• Press Release: Biden-Harris administration finalizes rule to increase compensation thresholds for overtime eligibility, expanding protections for millions of workers
• DOL Frequently Asked Questions
• DOL Small Entity Compliance Guide
  
  

Please Note: If you have questions, NHADA has several partners who offer legal services to members, including:

• ArentFox Schiff
• Bernstein Shur
• Devine Millimet & Branch
• McLane Middleton
• Sheehan Phinney

Of the five partners listed above, three firms have volunteered their expertise through the NHADA Employment Law Hotlines. This allows for free introductory phone calls on the topic of employment law.