Logo
Vol. 7, Issue 12
December 1, 2016

New FTC Buyers Guide Slated for 2017

The Federal Trade Commission ("FTC") has amended the Used Car Rule which requires sellers of used vehicles to post a "Buyers Guide" on every used vehicle before it is offered for sale.  The amended rule, which goes into effect on January 27, 2017, requires that the Buyers Guide contain new information for consumers, such as information on recalls and vehicle history reports, and also expands the list of major defects to include air bags and catalytic converters.  

The FTC is providing dealers with a one (1) year grace period to use up their existing supply of Buyers Guides.  The new revised Buyers Guide must be used once you have used up your current supply.  However, the old forms will no longer be valid as of January 27, 2018.  

Several used vehicle dealer clients have reported in recent weeks that the New York City Department of Consumer Affairs has issued multiple violations for failing to post the Buyers Guide.  The Used Car Rule applies to all sellers of used vehicles nationwide and enforcement action may be taken by DMV, the FTC or Consumer Affairs.  Failure to post a Buyers Guide has historically been an easy violation for regulatory agencies to assess against a dealership.  Fines and penalties can easily  reach several thousand dollars.  Therefore, it is vital for dealers to ensure that every used vehicle on display contains a fully completed Buyers Guide.  
 
The Buyers Guide can be placed anywhere on or in a used vehicle, as long as it is conspicuously and prominently displayed so consumers can easily read both sides.  You can hang the Guide from the rear-view mirror inside the car or on a side-view mirror outside the car.  You also can place it under a windshield wiper or attach it to a side window.  However, a Buyers Guide placed in a glove compartment, trunk or under the seat is not conspicuous and can result in a fine as it is not in plain sight.
 
Lastly, if a dealer conducts a transaction in Spanish, the FTC requires that a Spanish Language Buyers Guide be posted before the sale is transacted.

If you have any questions on Buyers Guide procedures or if you receive a violation from a regulatory agency for failure to post the Buyers Guide contact Stevan LaBonte at 516-280-8580.


Federal Court Delays Changes to Overtime Laws

 The changes to the "white color" overtime exemptions under the Fair Labor Standards Act ("FLSA") scheduled to go into effect on December 1, 2016 have been placed on hold after a federal district court judge issued a nationwide preliminary injunction.  The changes to the overtime rules include significant increases to the salary threshold for overtime exemptions for executive, administrative and professional employees.  The new rule was poised to allow many formerly exempt employees to become eligible for overtime. 
 
Until a decision is reached on the legality of the changes to the FLSA the current rules remain in effect.  The following is a summary of the current rule. 
 
The FLSA requires that most employees be paid at least the federal minimum wage for all hours worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.  However, the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as executive, administrative and professional employees ( as dealerships generally only employ people in the executive and administrative categories only those sections will be discussed in this article).   
 
To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week.  Job titles do not determine exempt status. In order for an exemption to apply, an employee's specific job duties and salary must meet all the requirements.
 
Executive Exemption
 
To qualify for the executive employee exemption, all of the following tests must be met:
  • The employee must be compensated on a salary basis at a rate not less than $455 per week;
  • The employee's primary duty must be managing the business, or managing a customarily recognized department or subdivision;
  • The employee must customarily and regularly direct the work of at least two (2) or more other full-time employees; and
  • The employee must have the authority to hire or fire other employees, or the employee's suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.
Administrative Exemption
 
To qualify for the administrative exemption, all of the following tests must be met:  
  • The employee must be compensated on a salary or fee basis at a rate not less than $455 per week;
  • The employee's primary duty must be the performance of office or non-manual work directly related to the management or general business operations; and
  • The employee's primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. 
Highly Compensated Employees
 
Highly compensated employees performing office or non-manual work and paid an annual compensation of $100,000 or more (which must include at least $455 per week paid on a salary or fee basis) are exempt from the FLSA if they customarily and regularly perform at least one of the duties of an exempt executive, administrative
or professional employee.

For more information on the overtime rules, the status of the injunction on the changes to the FLSA rules or any other employment related matters contact Stevan LaBonte at 516-280-8580.
Should you have any questions or need advice on anything related to dealership operations please do not hesitate to give me a call at 516-280-8580 or send me an e-mail to slabonte@labontelawgroup.com.  Your questions will be answered promptly.
Sincerely,

Stevan H. LaBonte, Esq.
LaBonte Law Group, PLLC
1461 Franklin Avenue, Suite LL-S
Garden City, NY 11530

516.280.8580 (Phone) 
631.794.2434 (Fax) 

Website        Practice Areas        About Us        Contact Us