Dealership exemption

Definition

The federal overtime exemption for mechanics, which reaches dealers and not a shop that only repairs.

Why It Matters

Effective labor rate is what a billed hour earns, and this decides what a worked hour costs. The federal overtime exemption names mechanics, but only at an establishment drawing more than half its business from selling vehicles. A shop that repairs and sells none is outside it, so its technicians are owed overtime unless another exemption fits. On flat-rate pay, the week's flag earnings and any paid waiting time are divided by every hour worked, and each hour past forty earns half that rate again. The exemption left for a technician is the retail commission one, which needs a bona fide commission plan paying more than half of earnings and a rate above one and a half times the minimum wage. Hours worked must be recorded daily, so ask for clock hours beside flag hours. A shop logging only flagged time cannot show it paid overtime, and the claim reaches back two years, three if willful, doubled.