# Exemptions to Wage-Hour Law No Longer to Be Narrowly Construed Written on May 30, 2018. *Tag(s):* [May 2018 Newsletter](https://wimlaw.com/index.php?option=com_tags&view=tag&id%5B0%5D=121:may-2018-newsletter) An April decision of the U.S. Supreme Court has important ramifications beyond its ruling pertaining to auto dealerships. *Encino Motor Cars, LLC v. Navarro*, No. 16-1362 (U.S. 4/2/18). The overtime rule exempts any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles, trucks or farm implements. The lower court ruled that exemptions should not apply to the service advisor because they did not sell automobiles and did not engage in the manual labor of maintaining or repairing vehicles. The employee argued that the exemption from overtime applied to those whose duties involved selling or servicing vehicles, even if they did not perform the manual tasks themselves. The Obama Administration had supported their position on the issue. In the current ruling, the Court objected to the narrow construction concept that exemptions should be narrowly construed in a way that provides the greatest possible benefit to a worker. Justice Clarence Thomas, writing for the majority, stated: "We reject this principle as a useful guidepost for interpreting the FLSA." Justice Thomas, joined by four other justices, ruled that exemptions in the wage-hour law were entitled a "fair reading." Four justices dissented. This case is of great interest for two reasons. First, it suggests that in the future, courts are likely to give broader interpretations to exemptions to the wage-hour rules. Second, it shows the importance of newly-appointed Justice Gorsuch, who joined in the 5-4 majority ruling. In a related development, the federal government budget law signed March 23, 2018, includes a rider amending the wage-hour laws pertaining to tip-pooling arrangements. A regulation had been proposed that allowed restaurants to require employees who directly earn tips to share them with workers who don’t. The budget bill would prohibit employers, including managers and supervisors, from participating in the tip-pooling arrangements. Questions still remain as to how this prohibition will apply to lead persons. The original Obama-era rule asserted that tips are the property of employees who earn them, and the rider rescinds this rule and moots a December 2017 proposed rule that would have allowed broader tip pooling. - [](https://x.com/intent/post?url=https%3A%2F%2Fwimlaw.com%2Fpublications%2Fnewsletters%2Fexemptions-wage-hour-law-updates.md&text=) - [](https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Fwimlaw.com%2Fpublications%2Fnewsletters%2Fexemptions-wage-hour-law-updates.md) - [](https://www.linkedin.com/sharing/share-offsite/?url=https%3A%2F%2Fwimlaw.com%2Fpublications%2Fnewsletters%2Fexemptions-wage-hour-law-updates.md) - [](mailto:?subject=Exemptions%20to%20Wage-Hour%20Law%20No%20Longer%20to%20Be%20Narrowly%20Construed) ## Related Content [ ![Marijuana weed silhoutte lake hemp green sunset](https://wimlaw.com/media/yootheme/cache/ff/manish-panghal-LlcinmU9ULM-unsplash-ff7247e8.jpg) ](https://wimlaw.com/index.php?option=com_content&view=article&id=514:should-employers-pot-drug-tests&catid=53) ### [Should Employers Consider Deleting Pot from Their Drug Tests?](https://wimlaw.com/index.php?option=com_content&view=article&id=514:should-employers-pot-drug-tests&catid=53) [Employment Law Newsletter: A Monthly Report On Labor Law Issues](https://wimlaw.com/index.php?option=com_content&view=category&id=53) [Read more](https://wimlaw.com/index.php?option=com_content&view=article&id=514:should-employers-pot-drug-tests&catid=53) [ ![man using a computer in a dark room](https://wimlaw.com/media/yootheme/cache/d6/jefferson-santos-9SoCnyQmkzI-unsplash-d6caa78e.jpg) ](https://wimlaw.com/index.php?option=com_content&view=article&id=511:employer-pursue-fraud-undocumented-worker&catid=53) ### [Employer Can Pursue Fraud Claim against Undocumented Worker](https://wimlaw.com/index.php?option=com_content&view=article&id=511:employer-pursue-fraud-undocumented-worker&catid=53) [Employment Law Newsletter: A Monthly Report On Labor Law Issues](https://wimlaw.com/index.php?option=com_content&view=category&id=53) [Read more](https://wimlaw.com/index.php?option=com_content&view=article&id=511:employer-pursue-fraud-undocumented-worker&catid=53) [ ![jar of money with a plant coming out, indoors](https://wimlaw.com/media/yootheme/cache/db/towfiqu-barbhuiya-joqWSI9u_XM-unsplash-dbd112c9.jpg) ](https://wimlaw.com/index.php?option=com_content&view=article&id=510:trump-economy-welfare-employment&catid=53) ### [Trump Issues Executive Order to Improve Economy by Getting Persons off Welfare and into Employment](https://wimlaw.com/index.php?option=com_content&view=article&id=510:trump-economy-welfare-employment&catid=53) [Employment Law Newsletter: A Monthly Report On Labor Law Issues](https://wimlaw.com/index.php?option=com_content&view=category&id=53) [Read more](https://wimlaw.com/index.php?option=com_content&view=article&id=510:trump-economy-welfare-employment&catid=53) ## Get Email Updates Receive newsletters and alerts directly in your email inbox. Sign up below. ## Recent Content [ Employment Law Newsletter: A Monthly Report On Labor Law Issues ](https://wimlaw.com/index.php?option=com_content&view=category&id=53) [ ![promo graphic, Negotiating and Handling Sensitive Employment Terminations](https://wimlaw.com/media/yootheme/cache/62/august-2026-webinar-6214f007.jpg) ](https://wimlaw.com/index.php?option=com_content&view=article&id=1606:negotiating-and-handling-sensitive-employment-terminations&catid=221)### [Negotiating and Handling Sensitive Employment Terminations](https://wimlaw.com/index.php?option=com_content&view=article&id=1606:negotiating-and-handling-sensitive-employment-terminations&catid=221) [Webinars: Employment Law "Hot Topics"](https://wimlaw.com/index.php?option=com_content&view=category&id=221) As the workplace has changed in the 21st century, so to have rules for handling termination of employment. In this webinar Betsy Dorminey… [Read more](https://wimlaw.com/index.php?option=com_content&view=article&id=1606:negotiating-and-handling-sensitive-employment-terminations&catid=221) [ ![globe](https://wimlaw.com/media/yootheme/cache/2a/kyle-glenn-nXt5HtLmlgE-unsplash-2a3d008b.jpg) ](https://wimlaw.com/index.php?option=com_content&view=article&id=1605:termination-tps-status-july-17&catid=52)### [Termination of TPS Status (July 17, 2026) for Haitians, Syrians, Somalians, South Sudanese, Yemeni, Ethiopians, and Burmese](https://wimlaw.com/index.php?option=com_content&view=article&id=1605:termination-tps-status-july-17&catid=52) [Alerts](https://wimlaw.com/index.php?option=com_content&view=category&id=52) On July 10, 2026, E-Verify notified employers that work authorization is extended temporarily through July 24, 2026, for workers from the f… [Read more](https://wimlaw.com/index.php?option=com_content&view=article&id=1605:termination-tps-status-july-17&catid=52) [ ![chaotic light lines](https://wimlaw.com/media/yootheme/cache/33/soheb-zaidi-yuv1FPyZdR0-unsplash-33611845.jpg) ](https://wimlaw.com/index.php?option=com_content&view=article&id=1604:termination-tps-status-july-10-update&catid=52)### [TPS UPDATE! Termination of TPS Status for Haitians, Syrians, Somalians, South Sudanese, Yemeni, Ethiopians, and Burmese](https://wimlaw.com/index.php?option=com_content&view=article&id=1604:termination-tps-status-july-10-update&catid=52) [Alerts](https://wimlaw.com/index.php?option=com_content&view=category&id=52) On July 10, 2026, E-Verify notified employers that work authorization is extended temporarily through July 24, 2026, for workers from the f… [Read more](https://wimlaw.com/index.php?option=com_content&view=article&id=1604:termination-tps-status-july-10-update&catid=52) [ ![connected spheres](https://wimlaw.com/media/yootheme/cache/12/d-koi-COFXWa6LJdw-unsplash-12ea6ce5.jpg) ](https://wimlaw.com/index.php?option=com_content&view=article&id=1598:dol-joint-employer-rule&catid=53)### [DOL Issues New Joint Employer Rule Proposal](https://wimlaw.com/index.php?option=com_content&view=article&id=1598:dol-joint-employer-rule&catid=53) [Employment Law Newsletter: A Monthly Report On Labor Law Issues](https://wimlaw.com/index.php?option=com_content&view=category&id=53) The U.S. Department of Labor (DOL) announced on April 22, 2026, a new proposed rule clarifying when multiple employers are jointly liable f… [Read more](https://wimlaw.com/index.php?option=com_content&view=article&id=1598:dol-joint-employer-rule&catid=53) [ ![plaintiff sign](https://wimlaw.com/media/yootheme/cache/89/wesley-tingey-mlGJB5D9IS0-unsplash-898571c2.jpg) ](https://wimlaw.com/index.php?option=com_content&view=article&id=1599:scotus-drivers-exempt-faa-arbitration&catid=53)### [The Supreme Court Again Addresses Whether Drivers Are Exempt from FAA Arbitration Agreements ](https://wimlaw.com/index.php?option=com_content&view=article&id=1599:scotus-drivers-exempt-faa-arbitration&catid=53) [Employment Law Newsletter: A Monthly Report On Labor Law Issues](https://wimlaw.com/index.php?option=com_content&view=category&id=53) The Federal Arbitration Act (FAA) encourages the use and enforcement of arbitration agreements, although the Act contains an exception for… [Read more](https://wimlaw.com/index.php?option=com_content&view=article&id=1599:scotus-drivers-exempt-faa-arbitration&catid=53) [ ![3](https://wimlaw.com/media/yootheme/cache/a0/marcel-eberle-FGYv8CDQBmg-unsplash-a0ece82f.jpg) ](https://wimlaw.com/index.php?option=com_content&view=article&id=1600:nlrb-member-trump-nominee-change&catid=53)### [Trump Nominates Third NLRB Member, Whose Confirmation Signals Potential for Change ](https://wimlaw.com/index.php?option=com_content&view=article&id=1600:nlrb-member-trump-nominee-change&catid=53) [Employment Law Newsletter: A Monthly Report On Labor Law Issues](https://wimlaw.com/index.php?option=com_content&view=category&id=53) On April 13, 2026, President Trump nominated James Macy to fill the third vacant Republican seat on the National Labor Relations Board (NLR… [Read more](https://wimlaw.com/index.php?option=com_content&view=article&id=1600:nlrb-member-trump-nominee-change&catid=53) ### Additional Legal Resources [### Newsletter Explore ](https://wimlaw.com/publications/newsletters) [### Books Explore ](https://wimlaw.com/publications/books) [### Alerts Explore ](https://wimlaw.com/alerts) [### Articles Explore ](https://wimlaw.com/articles) [### Audits Explore ](https://wimlaw.com/audits) [### Events Explore ](https://wimlaw.com/events)