Are Service Advisors Exempt from Overtime?
The United States automotive industry employs thousands of service advisors professionals who bridge vehicle sales, repairs, customer service, and shop operations. But one major legal question remains unsettled: should service advisors receive overtime pay, or are they exempt under federal law?
This issue reached new urgency after The United States Supreme Court agreed to consider the dispute as part of its current term. Courts across the country previously delivered conflicting interpretations, creating uncertainty for employees and employers alike.
Understanding the Overtime Exemption Dispute Service
The federal statute at the center of the debate provides overtime exemption for any:
- Salesman
- Partsman
- Mechanic
…who engages in selling or servicing automobiles. Some courts interpret service advisors as part of automobile “servicing,” placing them inside the exemption. Others determine that service advisors primarily sell services to customers, not vehicles directly, which may exclude them from the protected exemption class.
Because service advisors are customer-facing professionals—writing repair orders, recommending vehicle services, guiding maintenance decisions, and selling long-term service packages—their job duties do not align perfectly with traditional “mechanic” or “parts” classifications. That mismatch has produced sharply different legal results nationwide.
A Shifting Position from the DOL
Adding further complexity, the United States Department of Labor (DOL) has altered its interpretation over time. Here is a simplified breakdown:
| Year | DOL Position |
|---|---|
| 1978 | Service advisors treated as exempt (handbook guidance) |
| 1987 | Exemption position restated |
| 2008 | Exemption confirmed again |
| 2011 | Exemption may not apply in certain circumstances, position reconsidered |
This history matters because employers have relied on DOL guidance for decades when building pay policies. However, recent legal interpretations increasingly focus on job duties instead of old handbook opinions. If a service advisor’s core function is “selling services,” not “servicing automobiles,” courts may classify them as eligible for overtime protections.
Potential Impact on the Automotive Industry
The Supreme Court decision could permanently shift overtime obligations for:
- Car dealerships
- Automotive service centers
- Vehicle repair networks
- Franchise service departments
- Multistate dealership groups
- Service contract sales divisions
Employers must prepare for both outcomes:
If the exemption is narrowed, dealerships may face increased overtime liabilities, including compensation audits, pay reclassification, and potential wage-and-hour claims.
If the exemption is upheld, thousands of service advisors may remain overtime-ineligible.
