CATA News

On January 10, 2023, the Illinois legislature passed the Paid Leave for All Workers (PLFAW) Act and sent it to a Governor Pritzker for his signature. The Governor has stated that he intends to sign the bill into law. Once signed, it will become effective January 1, 2024.

The law would require nearly all covered Illinois employers to provide covered employees up to 40 hours of paid leave per year to be used for any purpose. This will make Illinois the third state with a mandatory paid time off law, following Nevada and Maine.

On January 1, 2024, or whenever employment begins, whichever is later, covered employees will accrue one hour of paid leave for every 40 hours worked. Employees can accrue up to 40 hours in a twelve-month period, which is any twelve-month period designated by the employer in writing at the time of hire. Employees may carry over up to 40 hours of paid leave from one twelve-month period to the next. Employees cannot use their paid leave until they have completed 90 calendar days of employment, or March 31, 2024, whichever is later.

The law expressly prohibits employers from requiring documentation or certification to support an employee’s need for leave. Employees must receive their hourly rate of pay when using paid leave, which does not include commissions or gratuities. However, an employee’s hourly rate of pay for leave cannot drop below the applicable minimum wage.

Employers may use other types of paid leave policies (vacation or sick pay) to satisfy their obligations under the law. The law states that an employer is not required to modify its leave policy if it satisfies the minimum amount of leave required AND the employee is permitted to take paid leave for any reason.

The law provides that an employer cannot require that an employee seek or find a replacement worker to cover his paid leave time.

There are record keeping requirements and posting and notice requirements in the law (if an employer has a workforce that primarily does not speak English, the employer must post the notice in the appropriate language spoken by the employees). Additionally, the law prohibits employers from taking adverse action against employees for exercising their rights under the law; opposing practices the employee believes to be in violation of the law; or supporting others’ exercise of rights under the law.

We expect that additional guidance will be forthcoming from the Illinois Department of Labor prior to the law’s January 1, 2024 implementation.

CATA dealers are urged to take the NADA’s Winter 2023 Dealer Attitude Survey. The deadline for filing is TODAY, Feb. 3. Click here to take the survey.

Brilliance Subaru in Elgin will be featured in a commercial that will air during the Puppy Bowl airing on Animal Planet during halftime of the Super Bowl. The dealer principal at Brilliance is former CATA Chairman and current Chicago Auto Show Chairman Kevin Keefe. Brilliance hosted several large dog adoption events over the last 12 months and the commercial will tell the story of one special adoption. Click here to watch the commercial.

The Chicago Automobile Trade Association, producer of the Chicago Auto Show, exclusively invites you to attend the show’s Social Media Preview on Friday, Feb. 10 (8 a.m. – 2 p.m.). Many automakers are planning special events to showcase their latest vehicles, innovative technology, new safety features and industry trends. Click here to register.

This is a great opportunity to gather content for your brand(s) – especially geared towards a social media audience – while seeing the latest from the auto industry before the public show opens the following day.

Secondly, please consider adding the 2023 Chicago Auto Show and First Look for Charity website graphics and social media assets to your dealership’s website and social media pages. We’ve uploaded all assets here including graphics, photos and videos.

Please reach out to Hayley Feichter with any questions.

Tickets and coupons that admit the holder to the 2023 Chicago Auto Show free or at a reduced price can be ordered by CATA members using the order form posted at www.CATA.info.

The passes promote goodwill with customers and even can help persuade a prospect to close a deal. Two kinds of passes are available, General Admission tickets and Weekday Discount coupons. The former, which costs CATA members $7 each for a minimum 100 tickets, admits the holder to the auto show free, without a box-office wait. The coupon costs members $100 for 100 and admits the holder for $10 during the week. Regular adult admission is $15.

Click here to download the order form.

It has come to the CATA’s attention that a provider out of Chesterfield, Missouri, is selling customers a “Compass Protection Plan” and inferring that the plan is being recommended by and/or sold through the dealership when this is not the case. The customer of a complaining dealer, which dealer had no knowledge of nor connection to the company selling this product, received a letter stating:

 “[XYZ Dealer] would like to thank you for protecting your [vehicle]. We congratulate your decision to protect yourself from the escalating costs of mechanical repairs.” The false implication that the dealer sold or recommended the product, or was otherwise involved in the transaction, is obvious.

Furthermore, when this customer attempted to cancel the policy after less than 30 days, he was allegedly given the run-around and told he had to come into the dealership (which didn’t sell the contract) to cancel.

If any of your customers experience similar issues, we suggest you encourage them to complain to the Illinois Attorney General’s Consumer Protection Division.

Volkswagen Group, Inc, (VWGoA) the distributor of Volkswagen and Audi new motor vehicles, parts, and accessories throughout the United States, filed a lawsuit last month in the U.S. District Court for the Northern District of Illinois against the Illinois Secretary of State, the Illinois Attorney General, and members of the Illinois Motor Vehicle Review Board, challenging the constitutionality of the recent warranty reimbursement amendment to the Illinois Motor Vehicle Franchise Act.

Referring to the Warranty Reimbursement amendment as the “Multiplier Act,” inasmuch as it allegedly “requires motor vehicle manufacturers to compensate dealers for time that the dealers never actually spend performing warranty work”(ie, at 1.5%), VWGoA describes the law as “crony capitalism at work: redistributive legislation that takes hundreds of millions of dollars from some (but not all) motor vehicle manufacturers and, for no public purpose, deposits that money directly into the pockets of politically favored Illinois dealers.” VWGoA claims the law is unconstitutional under the Commerce Clause of the United States Constitution, the Special Legislation Clause of the Illinois Constitution, and the Takings, Due Process, and Equal Protection Clauses of both the US and Illinois Constitutions.

The lawsuit attacks the very foundation and current relevancy of the Illinois Motor Vehicle Franchise Act, which was initially passed in 1979. The complaint states: “Today, the new motor vehicle market looks very different. Competition among manufacturers is widespread and dynamic, fueled by generational changes in consumer preferences, transformative innovations in electric vehicle technology, and the rise of new entrants (such as Tesla) that are not subject to the statutory restraints that confine legacy manufacturers…[yet] the Motor Vehicle Franchise Act persists, providing Illinois dealers-some of the state’s most remunerative businesses-with greater statutory benefits and protections than virtually any other interest group in any industry, while imposing an array of unusual constraints on manufacturers.”

One claim made by VWGoA is that when Governor Pritzker signed the “Multiplier Act,” he announced in a press release that the purpose of the Act was to increase technicians pay, but VWGoA alleges that the law neither ensures higher pay for technicians nor compels or incentivizes dealers to increase employee compensation. However, the requirements of the new law were incorporated into the wage provisions of the current 701 contract. Non-union dealers customarily match the 701 contract’s wage provisions in order to stay competitive in such a tight labor market – especially for techs.

The CATA will be reaching out to the defendants (the Illinois Secretary of State, Illinois Attorney General, and the Illinois Motor Vehicle Review Board) to discuss how the CATA may be of assistance in helping to defend against these meritless allegations.

With the CATA Staff moving down to McCormick Place in preparation for the 2023 Chicago Auto Show, the last day for CATA Member Dealers to order dealer forms (odometer statements, used-car warranties, and used-car buyer guides) is Jan. 31.

Forms must be ordered online through the association’s new member portal, which can be accessed at www.cata.info. If you are receiving this email, you likely have access to the portal. To set or reset your password, click the login button on the top right corner of the site and use the “Forgot Password” link to set/reset your password. Once you have done that, login and click on the “Member Area” in the navigation to access the order form.

New links to IRS information on the Inflation Reduction Act’s clean vehicle and refueling infrastructure tax credits, together with updated sample federal EV credit seller report forms (in both PDF and Word versions), have been posted to the NADA Regulatory Affairs Alternative Fuel Vehicle and Refueling Incentive webpage (NADA login required).

NADA has created the 2023 IRC Section 30D Clean Vehicle (NADA login required) form for qualifying new vehicles and the 2023 IRC Section 25E Previously Owned Clean Vehicle Tax Credit Report for used vehicles as templates for dealers to provide to their customers and file with the IRS. 

In addition to becoming familiar with this information, dealers should pay close attention to any EV tax credit communications they receive from their OEMs and the finance sources with whom they work.

Finally, consumer leases may also qualify for tax credits. More information can be found here. The IRS released a list of eligible OEMs here.

The National Automobile Dealers Association (NADA) issued its analysis of 2022 U.S. auto sales and the economy.

2022 ended with new light-vehicle sales reaching 13.7 million units, the lowest full year sales total since 2011. Year-over-year 2022 sales decreased 8.2% compared to 2021 with the decrease primarily attributed to the ongoing semiconductor microchip shortage and additional supply chain disruptions.

In 2022, light-trucks accounted for nearly 80%, 79.4%, of all new vehicles sold, up 1.6% from 2021. Crossovers remained the most popular segment representing 45.2% of all new light-vehicles sold. Alternative fuel vehicles also gained market share with sales of hybrids, plug-in hybrids (PHEVs) and battery electric vehicles (BEVs) accounting for 12.3% of all new vehicles sold, an increase of 2.7% compared to 2021.

Franchised dealerships nearly doubled the number of BEVs they sold in 2022, reaching 259,728 in 2022, an increase of 92.1% compared to 2021. Franchised new-car dealerships captured 35.2% of the total new vehicle BEV market with continued BEV sales growth in 2023 as new models from legacy automakers hit showrooms and more BEV inventory is available.

When contrasting vehicle sales to inventory, inventory levels at the end of December 2022 totaled 1.67 million units, a 49% increase compared to the total 1.12-million-unit inventory at the end of 2021.According to Wards Intelligence, North American light-vehicle production is expected to total 14.2 million units in 2022 with production forecasted to rise to 15.4 million units in 2023 as supply chain issues improve gradually.

Read the full article here: NADA Issues Analysis of 2022 Auto Sales and 2023 Sales Forecast | NADA