Dealer regulatory trends for 2016, Part 3

Dealer regulatory trends for 2016, Part 3

This is the last in a series of articles on regulatory trends to watch out for in 2016.

Franchise Relations

1. Insist on proper labor and service reimbursement for warranty and recall work. Repairs to remedy recalls have increased dramatically. If state law requires retail reimbursement for labor and/or parts, be sure to insist on it.

2. Protect the dealerhipês rights in audits. If audited, dealers should fight for their money. They should challenge the auditorês findings and use the franchisorês internal appeal process. The dealer should use his rights under state law to challenge a chargeback that he feels is improper.

3. Protect against chargebacks for exports. Manufacturers continue to impose chargebacks for sales of vehicles that wind up being exported. The dealer should know his customers and do what is necessary to prevent exports. He can also use the manufacturerês known exporter list. If the manufacturer has issued due diligence recommendations, the dealer should use them.

Administrative Issues

1. What is the dealerhipês policy on doc fees? A recent case in South Carolina has brought prominence to doc fees (which may be called processing fees or some similar term under the state law). Plaintiffsêlawyers are looking for reasons to challenge doc fees. Follow the state law carefully. If the state does not have such a law, the dealer should determine and charge a reasonable price for the items for which the doc fee is designed to compensate him.

2. Comply with the Fair Labor Standards Act. The Obama administration has made FLSA enforcement a priority.

a. The government assumes that everyone who works in the dealership should be an employee. The dealer should make sure those who are treated as independent contractors are truly in business for themselves.

b. Every nonexempt employee must earn minimum wage for all hours worked.

c. Every employee entitled to premium overtime must earn that.

Thanks to attorney and WANADA Kindred-line member Michael Charapp, Charapp & Weiss, LLP, for providing this information.