Pub. 15 2016-2017 Issue 3

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 15 new jersey auto retailer W W W . N J C A R . O R G 2017 will probably bring more consumer protection proposals regarding recalls. There is good reason to believe that the Leg- islature will continue to act reasonably and won’t pass some “feel good” provision that would be burdensome and costly to the industry and ultimately bad for consumers. NJ CAR has been successful in convincing legislators that disclosure is the key, and has suggested that codifying the disclosure obligation would not be objectionable, provided there is some kind of “safe harbor” under which dealerships should be protected as long as they provide buyers with any information on recall status that is available from the NHTSA website (www.safercars. gov) which allows consumers and dealers to search for recall information by vehicle VIN. One area involved with recalls that NJ CAR will be pursu- ing is the issue of dealership reimbursement for the costs of recalls. New Jersey’s Franchise Practices Act makes a general statement that manufacturers must reimburse dealers for all costs associated with recalls. In addition, federal law states that manufacturers who require dealerships to accept deliv- ery of new vehicles which cannot be sold must reimburse the dealerships for their carrying costs at the rate of 1% of factory invoice per month. NJ CAR believes that manufacturers should be required to reimburse dealerships for ALL costs, as New Jersey’s statute requires, and this should include carrying costs on any used vehicles the manufacturer tells the dealerships not to sell, as well as lost opportunity, diminution in value, and other consequential damages suffered by dealerships as a result of these widespread recalls. Wage and Hour Wage and hour is subject to both State and federal regulation and, within New Jersey’s regulations, is a “catch all” provi- sion which incorporates all regulations adopted by the federal Department of Labor. The massive increase to the “minimum wage” for employees falling into the “white collar” overtime exemption would have been enforced by both State and federal regulators. Fortunately, we have dodged that bullet, through the combination of a federal court decision staying the imple- mentation of the regulation, and the results of the Presidential election, which make it unlikely that the DOL will even try to uphold the regulation during a Trump administration. We still live in a “blue state,” however, and among the propos- als put forth during the Presidential election was an increase in the minimum wage to $15.00 an hour. Notwithstanding the results of the Presidential election, it is always possible that the State Legislature will latch on to the idea. Through the remainder Christie’s term as Governor, any such measure COMPLIANCE REPORT  continued from page 13 would likely be vetoed, but watch for it to become an issue in the next gubernatorial election. On a positive note, the longstanding controversy over the exempt status of service writers has likely been settled. For decades, service writers had been considered exempt as auto- motive salespersons, who just happened to sell service, rather than vehicles. But in 2011 the Obama DOL announced that it just wasn’t going to accept this argument any more. In re- sponse, the GOP-controlled Congress inserted a measure in a spending bill which prohibited the DOL from spending any funds to enforce this change of stance, leaving the status of service advisors completely up in the air. On June 20, 2016, the U.S. Supreme Court reversed a lower court ruling that service advisors are entitled to overtime pay, and rejected the 2011 Department of Labor (DOL) advisory opinion which had held that service advisors are not exempt. NOTE: In order for a Service Writer to be exempt from overtime under New Jersey law they must earn at least $455 per week and at least 50% of their earnings must come from commissions. Patrick Cox, Esq. is NJ CAR’s Director of Legal & Regulatory Affairs. He can be reached at 609.883.5056, ext. 350 or via email at pcox@njcar.org . D.T. MURPHY & CO. 973 809-9311 • dan@dtmurphy.com • www.dtmurphy.com Dan Murphy Dan Murphy DAN MURPHY MATCHING BUYERSWITH SELLERS SINCE 1989 ~~~ SELLINGYOUR STORE? I HAVETHEWILLING, READY AND ABLE BUYERSYOU’RE LOOKING FOR CONFIDENTIALITY ASSURED. ~~~ WHAT’SYOUR STOREWORTH? MY COMPREHENSIVE BUSINESSVALUATION COMPLIESWITH IRS GUIDELINES FOR ESTATETAX PURPOSES & PARTNERSHIP LITIGATION D.T. MURPHY & CO. 973 809-9311 • dan@dtmurphy.com • www.dtmurphy.com Dan Murphy D.T. MURPHY & CO. 973 809-9311 • dan@dtmurphy.com • www.dtmurphy.com Dan Murphy . . . 973 809-9311 • dan@dtmurphy.com • www.dtmurphy.com Dan Murphy