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Virginia Rescinds Overtime Exemption for Auto/Mechanical Industry Workers    

Previously, on August 10, 2021, Virginia had passed an amendment to the Virginia Overtime Wage Act, through the passing of the VA HB 7001C (HB 7001C). HB 7001C provided an exemption from overtime requirements to individuals employed in certain roles within the automotive industry. Specifically, the exemption applied to salespersons, partspersons, or mechanics who are primarily engaged in selling or servicing automobiles, trucks, or farm equipment. Additionally, in order to have the exemption status apply, said employees would need to be employed by a non-manufacturing business that is primarily in the business of selling such vehicles or implements to ultimate purchasers. This may include an automobile dealership or auto parts store. With respect to motor vehicles, an ultimate purchaser would be defined as the first person who in good faith, purchases such new motor vehicle or new engine for purposes other than resale. However, the amendments brought by HB 7001C were meant to be short lived and are officially set to expire as of June 30, 2022. As a result, employers will want to prepare for the upcoming expiration date by re-examining the employees who once fell under this exemption, and work to reclassify them in order to ensure that all hours worked are accounted for and overtime is taken into account for hours worked over forty in a single workweek.

Next Steps for Employers

In order to prepare for the expiring exemption status, employers are highly recommended to review their current group of employees to ensure that minimum wage, time tracking, and overtime requirements once again become applicable to those employees who once were deemed exempt by HB 7001C. Any employees that are affected by the legislation change will now need to properly track any hours worked in order to ensure that any overtime applicable, is properly accounted for. Additionally, it is incredibly important that employees are notified of any upcoming changes that may occur to their compensation and employers should be informed, in writing and as soon as possible. Finally, Employers are also encouraged to seek the assistance of legal counsel regarding the classification determination for any such employee. 

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