GNYADA April 2019 Newlsetter

For Dealer Principals / General Managers / Sales Managers The Newsletter A Publication of Greater New York Automobile Dealers Association

New York Auto Show Special Newsletter!

APRIL 2019

COME SEE…

More than 50 world and North American vehicle debuts.

Over 1 million visitors checking out the latest vehicles and making purchase decisions.

NYS Governor Andrew Cuomo open the Show on Saturday, April 20th.

AND MUCH MORE!

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The Newsletter • New York International Auto Show Special Edition I April 2019

Discounted Dealer VIP Tickets on Sale Now!

As a dealer member of GNYADA, you are eligible for spe- cial discounts on Dealer VIP Tickets for the 2019 New York International Auto Show. Giving away New York Auto Show tickets is a perfect way to thank your most valuable customers and vendors. Tickets are available at up to 35% off for bulk purchases of twenty or more tickets. In addition to our Dealers VIP Customer ticket program, show posters and discount coupons are available to help you maximize the excitement of the Show for your customers. Contact Elba@autoshowNY.com or call 718.746.5300 for more info.

Bigger and better than ever, dealers are invited to see the 2019 NYIAS in a festive setting before it opens to the public, at our exclusive Dealer Preview Reception . Dealers from New York, New Jersey, and Connecticut will experience a VIP Sneak Peek at more than 1,000 of the best production, exotic and concept vehicles 2019 has to offer. Dealer Preview Reception: Play Ball at the NYIAS! THURSDAY, APRIL 18, JAVITS CENTER

The Dealer Preview Party will take place on April 18, in the Special Events Hall, Level 1 of the Javits Center. Invitations are in the mail. Please contact the Association at 718.746.5900 for more details. See you at the Show!

COCKTAIL RECEPTION: 5PM-7PM SHOW FLOOR OPEN: 5PM-11PM

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The Newsletter • New York International Auto Show Special Edition I April 2019

The New York Int’l Auto Show Motivates Buyers As excitement builds for this spring’s 2019 New York International Auto Show (NYIAS), now is a good time to remember why the Show is so important for manufacturers, dealers, and consumers. For almost 120 years, the New York Auto Show has been providing a glimpse into the future with innovative new products and features while showcasing nearly every make and model available at dealerships all under one roof. Auto shows are where buyers go to make decisions about their next purchases. In 2018, according to a third-party research firm, Foresight Research, 68% of NYIAS attendees were in the market to buy or lease a new vehicle in the next 12 months. Of those 12-month intenders, 40% added brands to their purchase consideration as a result of visiting the Auto Show. The Greater New York Automobile Dealers Association has published these findings, and more, about the importance of the New York Auto Show to the local market. For the complete report, visit gnyada.com and click on “NY Int’l Auto Show”. The Association encourages its members to remind their manufacturer representatives about the importance of the NYIAS to the car-buying public. If you would like printed copies of the report to share, please contact GNYADA at 718.476.5900.

68% of attendees intend to buy or lease in the next 12 months 40% added brands as a result of their visit 26% of attendees who did not plan to purchase changed their mind PURCHASING POWER OF THE NYIAS

NEW YORKERS LOVE THE NEW YORK AUTO SHOW!

56 % OF ALL VEHICLE

17 % OF NY AUTO PURCHASERS MADE THEIR FINAL DECISION AT AN AUTO SHOW (AS COMPARED TO 8% OF ALL BUYERS/13% IN GLOBAL MARKETS)

NEW YORK AUTOMOTIVE DMA IS THE LARGEST IN THE NATION 1.1 MILLION VEHICLE REGISTRATIONS

PURCHASERS WERE INFLUENCED IN THEIR DECISION BY THEIR ATTENDANCE AT AN AUTO SHOW IN THE PAST 12 MONTHS

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New York Automotive Forum TUESDAY, APRIL 16, 2019 - GRAND HYATT NEW YORK

The New York Automotive Forum is an annual conference for business leaders to learn and discuss the future of the auto- motive market. Hosted by J.D. Power, NADA and the NYIAS, this premier event attracts more than 500 attendees representing manufac- turers, dealers, analysts, suppliers and Wall Street. The 2019 Forum will offer a mixture of keynote addresses and panel discussions from top industry leaders such as:

n Anders Gustafsson President and CEO, Volvo Cars US Scott Keogh CEO, VW of America Erwin Raphael Chief Operating Officer, Genesis North America Joel Prakken , Ph.D. Chief U.S. Economist, IHS Markit We invite you to hear from these industry influencers, network with decision-mak- ers and leave with new insights to propel your business forward. Registration for the Automotive Forum is now open! Registration includes access to the 2019 NYIAS’ Press Preview days. Visit https://registration.experient event.com/ShowNAD195 to register. n n n

Bob Carter EVP – Sales, Toyota Motor North America Fred Diaz President & CEO, Mitsubishi Motors North America

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The New York International Automobile Show is sponsored by: The Greater New York Automobile Dealers Association 718.746.5900 gnyada.com GNYADA Chairman: Lee Certilman GNYADA President: Mark Schienberg Show Committee Chair: John LaSorsa, LaSorsa Buick-Chevrolet, Inc. Vice Chair: Brian Miller, Manhattan Motorcars, Inc. Committee: GNYADA Members’ Hospitality Suite GNYADA members are invited to join us at Hospitality on Level 4 of the Javits Center for beverages, light bites and a place to relax while visiting the New York International Auto Show. GNYADA’s Hospitality Lounge will be open and serving refreshments during the days and times listed here.

HOSPI TAL I TY HOURS

Mon, April 15: Tues, April 16: Wed, April 17: Thur, April 18: Fri, April 19: Sat, April 20: Sun, April 21:

Mon, April 22: Tues, April 23: Wed, April 24: Thur, April 25: Fri, April 26: Sat, April 27: Sun, April 28:

8am-5pm 8am-5pm 7am-7pm 7am-11pm 8am-8pm 7am-8pm 8am-7pm

8am-8pm 7am-8pm 7am-8pm 8am-8pm 8am-8pm 8am-8pm 8am-6pm

Robert Penn, Penn Toyota, Ltd. Randi Siegel, Legend Auto Group Jack Weidinger, Weidinger Automotive Group Andrew Weinstock, Biener Audi, Inc.

Oliver Brodlieb, East Hills Chrysler Jeep Dodge Gary Brown, Brown’s Jeep Chrysler Dodge Lee Certilman, Nardy Honda

AUTOSHOWNY.COM #NYIAS

Louis G. Giordano, Croton Auto Park Miles Miller, Porsche of Huntington

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The Newsletter • New York International Auto Show Special Edition I April 2019

To read these stories and get the latest news online, visit the GNYADA website at www.gnyada.com

For Dealer Principals / General Managers / Sales Managers The Newsletter A Publication of Greater New York Automobile Dealers Association

APRIL 2019 Volume 29, Issue 2

1 Gov. Announces His Support to Double the NYS Doc Fee

Governor Andrew Cuomo announced that DMV’s Doc Fee will double to $150.00 from the current level of $75.00. The Governor also expressed his willingness to investigate changes to the State Inspection Fee. These major announcements came at a breakfast meeting at the Governor’s Mansion in Albany with dealer representatives from across New York. The Governor acknowledged GNYADA’s recent study, mentioning the urgent need for a fee increase to address the competitive disadvantage New York dealers face against dealers in surrounding states, who can charge higher registration fees. The Governor also acknowledged that future Doc Fee adjustments are necessary in order to get the fee where it should be according to the GNYADA study.

HIGHLIGHTS

The Newsletter is published by GNYADA, a not-for-profit organization representing franchised automobile dealers in the New York metro area. 18-10 Whitestone Expressway Whitestone, New York 11357 New DMV Commissioner Sits Down with GNYADA Directors page 2 Sales Tax and Extended Warranties page 3 Rules on Shop Supplies and Waste Fees page 5

The Doc Fee increase will take effect after regulations are written and posted in the State Register. It is expected to be final in the next 2 to 3 months. GNYADA will keep dealers informed as to when it goes into effect. The Governor also addressed the short- age of qualified auto technicians and the importance of getting these jobs filled by committing to work with the industry on a statewide effort to promote and better educate people about this career path. GNYADA thanks Governor Cuomo for his support and for taking this important step in adjusting this fee.

3:55PM Page 1

RECALCULATING THE STATE’S REGISTRATION & TITLING PROCESSING FEE

How New York’s Dealers Sank to the Bottom – Yielding Declining Sales & Employment

January 31, 2019

Dealer Hotline 718.746.5900

Greater New York Automobile Dealers Association • www.gnyada.com www.gnyada.com

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New DMV Commissioner Sits Down with GNYADA Directors 2

agency’s efforts to bring the state’s over 10,000 car dealers onto VERIFI. Higgins acknowledged that the Association’s members and personnel have been extremely helpful in launching and suggesting improve- ments to VERIFI. Another key agen- da item for both GNYADA and the Department of Motor Vehicles has been notifying vehicle owners whose vehicle’s still require repair of an open recall. Higgins discussed how the agency, working with the Association, now provides a written report for consumers at the time of their annual safety inspection. While there are no hard stats about the impact of the new program, DMV is confident the effort will lead to a sub- stantial increase in recall repairs at dealerships. The Acting Commissioner concluded his visit by agreeing to partner with dealers and the Association to main- tain open lines of communication regarding issues impacting dealership operations.

Acting DMV Commissioner Mark Schroeder Attends recent GNYADA Board Meeting

Acting DMV Commissioner Mark Schroeder joined GNYADA’s Board of Directors on Thursday for its quar- terly board meeting at the Associ- ation’s Education Center in Queens. Mr. Schroeder, who was nominated for the Commissioner post in January and awaits confirmation by the State Senate, was joined by DMV Deputy Commissioner for Compliance Thomas Higgins. The Acting Commissioner also con- veyed Governor Andrew Cuomo’s personal appreciation for all dealers’ do. The two officials led a lengthy con- versation with dealers and President Mark Schienberg that covered several important issues. During the conver- sation, GNYADA secured a key com- mitment from the Acting Commissioner that DMV will create a workgroup to study the lack of com- pliance with the state’s relatively new Broker Law that requires brokers to register with DMV and to adhere to extensive disclosure requirements. Schroeder committed to working with GNYADA on a task-force to address this issue.

Mr. Schroeder acknowledged the importance of dealers contributing billions of dollars to the state’s econo- my and charitable efforts across the Metro New York Region. Both Commissioner Schroeder and Higgins gave a thorough briefing to the Board of Directors on the

GNYADA Chairman of the Board Lee Certilman, Acting DMV Commissioner Mark Schroeder, and GNYADA President Mark Schienberg

2 Greater New York Automobile Dealers Association • www.gnyada.com The Newsletter • April 2019

Sales Tax Reminders

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A. ExTENDED WARRANTIES

Retail Purchase The fair market value of the trade-in is the amount applied to reduce the selling price, which reduces the amount used to calculate sales tax due. Lease Transaction Regardless of the value of the trade-in, the sales tax credit will be based on the amount of the equity the customer has less the trade-in vehicle value. Trade-In Remember, the buyer or the lessee of a new vehicle does not have to own the vehicle or personal property being used as a traded-in in order to receive the sales tax credit. Eligible Property In addition, any property, not just a vehicle, being traded in (a boat, motorcycle, diamond ring, painting, livestock), can be eligible for the trade-in credit as long as the dealer accepts the property for the purpose of resale and applies the credit to the purchase of the new or used vehicle the dealer is selling or leasing to the buyer. GNYADA publications, A Guide to Sales Tax for Automobile Dealers (Pub. 838) and A Dealer's Guide to Sales and Use Taxes on Long-Term Motor Vehicle Leases in New York State (Pub. 839), are a great resource for dealerships. Contact GNYADA today if you need a copy.

This is a reminder on how sales tax applies to service contracts and extended warranties, which can be confusing. Here are a few items to keep in mind: Sales Sales of extended warranties or service contracts are subject to sales tax. Repair work To keep things as simple as possible, any deductible or other payments made by the CUSTOMER for repairs under an extended warranty ARE SUBJECT to sales tax.

B. SALES TAx DEDuCTIoNS oN TRADE-INS

Calculating the correct sales tax on a deal involving a trade-in is important because this is often an area subject to audit. Below is a summary of the difference between a retail purchase and lease transaction with a trade-in.

Avoid Violations – Follow License Plate Laws

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Customers may ask you for reim- bursement if they receive a ticket or fine, which can range from $25 to $200.

Here are the best practices, and top three concerns, when it comes to installing license plates. Glass or Plastic Coverings Dealers should not offer to coat or cover license plates with any glass, plastic, or synthetic material. Providing such covers is considered a violation for concealing or obscuring part of the plate. The Vehicle and Traffic Law says that license plates must be kept clean, be easily readable, and cannot be cov- ered by material that distorts recorded or photographic images of the plates.

Front Plates New York law requires a set of dis- tinctive number plates"conspicuously displayed, one on the front and one on the rear of such vehicle." Dealers should attach both a front and rear license plate. License Plate Frames It is illegal to cover license plates in a manner that obscures the letters, num- bers, or other markings. Dealers should examine their plate frames to ensure that any words, numbers, or letters on the license plate are not blocked or obstructed by the frame. Check with your supplier to make sure you receive compliant plate frames.

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Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • April 2019

5 CFPB Inactivity Leads to States Reviewing Credit Compliance Policies

creed, color, national origin, sexual orientation, military status, age, sex, marital status, disability, or familial status. Guidance Targets Dealers This guidance specifically addressed dealer markup. Because dealer markup is part of the credit transaction, it must be charged non- discriminatorily to comply with the Fair Lending Law. Dealers should review the guidance, which can be found here: https://www.dfs.ny.gov/ legal/industry/il180823.pdf.

while operating a dealership vehicle, the ticket is the employee’s responsi- bility and the dealership does not have to reimburse them. Camera-issued tickets If a violation caught by a “red light camera” (for example) gets issued to the dealership as the owner of the vehicle, the dealer should follow the same procedure as for parking viola- tions. Code violations Vehicle code violations such as a bro- ken taillight or excess emissions are similar to “breakage” or “spoilage” and, therefore, must be paid only by the dealer. The employee may not be asked to reimburse the dealer for these tickets, unless the breakage resulted from a negligent act by the employee. disclosure forms. GNYADA suggests that your dealership have a policy in place to ensure your financing practices are compliant with existing laws. NADA’s Fair Credit Compliance Policy & Program will help your dealer operate in a compliant manner. https://www.nada.org/faircredit/ Although the CFPB generally lacks authority over franchised new car deal- ers who engage in indirect financing, it does have authority over financing sources. The CFPB recently ordered an automotive financing company to pay nearly $12 million in fines and restitu- tion to resolve claims regarding loan add-on products and loan extensions.

New York, like several other states is looking to expand consumer financial protection laws and enforcement since the CFPB in Washington has not filed any new enforcement actions in more than a year. In New York the Department of Financial Services (DFS) continues to propose legislation that would increase State DFS Guidance Prohibits Discrimination Earlier this year, the DFS issued guidance to ensure compliance with New York’s Fair Lending Law, which prohibits discrimination in the granting, withholding, extending, or renewing, or in the fixing of the rates, terms, or conditions of any form of credit on the basis of race, oversight on dealers and add protections for consumers.

Best Practices Legislative and regulatory

enforcement activity are expected to increase in New York. Dealers in New York City must already complete additional financial

6 Dealership Vehicles: Liability for Tickets

ticket costs, nor can they demand that the employee pay the summons. Here is a breakdown of various vehi- cle violations, as well as dealers’ responsibilities for each: Parking violations If an employee receives a summons for parking a dealership vehicle ille- gally, the dealer is prohibited from requiring the employee to reimburse the dealership as a condition of employment. A dealer may ask for reimbursement, while clarifying that the employee will not be retaliated against or disciplined should they choose not to. Moving violations Moving violations are usually issued to the driver of the vehicle, not the owner. Accordingly, if an employee is issued a ticket for a moving violation

Dealership employees sometimes receive tickets for parking or moving violations, when operating dealership vehicles. As the official owners of the vehicle, dealers are generally on the hook for tickets assigned to the vehi- cle; they cannot deduct from the employee’s wages, in order to cover

4 Greater New York Automobile Dealers Association • www.gnyada.com The Newsletter • April 2019

EPA Issues Rule Regarding Recalled Airbags RuLE ExEMPTS DEALERSHIPS FRoM CERTAIN HAzARDouS WASTE MANDATES

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costs into the price of the new tire. An official sign must be posted. Shop Supplies: If your dealership does not include the price of supplies in the repair, you may charge for shop supplies used (nuts, bolts, solvents, cleaners, etc.) if you itemize the cost of each item separately on all estimates and R.O.s and disclose the charges in ads. Preprinted fees or percentage based fees are not approved by DMV. Advertising: If you advertise a price for a service, include any shop fees in your price, or waive them in connection with the advertised offer. Call GNYADA if you need Oil, Tire and Battery disposal signs. They are available at no charge to members. monthly hazardous waste genera- tor quantity. No more than 250 airbag parts may be accumulated at one time and for no more than 180 days. Airbag parts being shipped offsite must comply with hazmat ship- ping rules and be marked “Airbag Waste: Do Not Reuse.” Airbags must be shipped to a facility under a vehicle manufac- turer’s control or otherwise arranged pursuant to a recall, or to a permitted hazardous waste treat- ment, storage or disposal facility. Record Retention Airbag waste shipment records must be kept for at least three years.

DMV’s Repair Shop Regulations require dealers to provide customers with an invoice that contains a list of every part supplied and labor performed, including the cost for each part used on the repair job. used oil: New York Environmental Conservation Law prohibits dealers from charging for waste oil. During regular business hours, dealers must accept up to five gallons of used oil per day from an individual. Dealers are required to post a sign stating “We Accept Used Oil for Recycling at No Charge.” Batteries: New York Law also requires retailers to accept up to two batteries per month from an individual at no charge. Again, a sign is required that states: “It is illegal to The Environmental Protection Agency (EPA) recently published a rule on safe management of recalled airbags. The rule addresses various waste management scenarios that apply to undeployed airbag parts subject to federal safety recalls including those that may not be safe to deploy in a dealership or may be unsuitable for installation in automobiles. The rule aims to help facilitate Takata airbag parts recalls by exempting dealerships from certain hazardous waste management mandates. What does this mean for dealers? Non-Takata recalled and non- recalled waste (“discarded” or no longer suitable for use) airbag modules may be safely deployed onsite and the resulting residue n 8

discard vehicle batteries. State law requires us to accept vehicle batteries at no charge for recycling.” Hazardous Wastes: Be careful not to label your disposal fees as a hazard- ous waste fee. A lot of the waste you are generating is not, and labeling it hazardous could require you to treat it differently. For instance, oil filters are not hazardous waste if properly drained and crushed prior to disposal. Tires: Dealers may not charge for accepting waste tires that are similar in size and quantity to the number of tires purchased by your customer. NYS requires sellers of new tires to collect a $2.50 Waste Tire Fee for every new tire sold. The fee must be itemized on all estimates, R.O.s and in ads. You may incorporate disposal should be recycled along with other scrap metal. Takata-related airbag parts should be managed according to vehicle manufacturer instructions as set out in dealer recall notices. If it’s unclear how a vehicle man- ufacturer wants specific recalled Takata airbag parts handled, the dealer should contact the manu- facturer for clarification. Note: vehicle manufacturers should be compensating their dealers for the cost of proper recalled airbag parts management. NADA’s Dealer Guide to Federal Hazardous Waste Law: Since dealerships are considered “airbag waste handlers” they do not count toward the dealership’s n n

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Rules on Shop Supplies and Waste Disposal Fees

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Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • April 2019

9 Congratulations Bernard Curry, GNYADA Nominee for TIME Dealer of the Year Award

is one of the automobile industry’s most prestigious and highly coveted honors. Curry was one of only 51 auto dealers nominated for the annual award out of more than 16,000 dealers nationwide. “Being a business owner gives me the wonderful opportunity to give back to my community through charitable work, to provide good jobs for more than 1,000 people, including 450 here in Westchester County, and to enhance the lives of their families,” nominee Curry said. “I greatly appreciate this recognition and share it with the entire Curry team.” Curry was recognized for applying his management expertise and personal philosophy to community causes. When he was recruited to serve on his local hospital’s board of directors after it hired a new CEO, he jumped at the chance to have a

positive impact. Now known as New York-Presbyterian Hudson Valley Hospital, it is a highly rated institution that brings great medical care to the entire region. Curry was also instrumental in creating the Westchester Children’s Museum, in the landmark boathouses at Playland Amusement Park in Rye, NY, as a founding board member and museum benefactor. He currently sponsors an educational exhibit called Toddler Beach at the park. A recipient of numerous honors for his philanthropic work, Curry is equally committed to bettering the lives of his employees. The Greater New York Automobile Dealers Association thanks Bernard for representing GNYADA at this prestigious ceremony.

Bernard F. Curry III, dealer principal of Curry Acura in Scarsdale and owner of Curry Automotive, LLC, joined 50 other nominees on stage during an awards ceremony announcing the 2019 TIME Dealer of the Year. The TIME Dealer of the Year award

Spring Labor Law Seminar Leaves of Absence – Beyond the Bermuda Triangle Managing FMLA, Disability, Workers’ Comp, Paid Family Leave

Save the Date

Date: Time: Place: Speaker: Fee:

May 16, 2019 9:30am – 12:00pm Center for Automotive Education & Training James E. McGrath, III, Esq. First ERP member free, $50 each additi on al attendee Non-ERP members: $175

ReseRve youR seat: CoNtaCt Kelsey at Kelsey@GNyaDa.CoM oR 718.746.5900

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Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • April 2019

10 NYC Bans Hair Discrimination

perceived discrimination against peo- ple of color. Examples of such poli- cies include employers who previ- ously asked employees to chemically straighten their hair, limit the size of their hair, or take other steps to change their hair from anything natural or closely associated to their identity. The guidance states that forcing employees to change their hairstyle is perceived as a form of racism and, therefore, prohibited under New York City Human Rights Law. Examples of discrimination on the basis of hair include: An employer asking a person of color to change their hairstyle from one that is considered natu- ral or closely associated with their identity, such as twists or braids, to one that conforms to the company’s appearance stan- dards. An employer banning hair that extends a certain number of inch- es from the scalp, thereby limit- ing Afros, or requiring people of n n

Dress codes and appearance policies are important tools that dealers can use to set expectations about the dealership’s image, culture, and goals. For example, dealers can pro- hibit piercings and tattoos to project a professional image to clients, but only if done so in a consistent man- ner. Notably, if an employee asserts a religious basis for a piercing or tat- too, an exception must be granted depending on whether the request for an exception is based on a sincerely held religious belief and, if so, whether allowing the exception would create an undue hardship to the dealer. Recent developments highlight how important it is for employers to pro- tect themselves from discrimination claims while protecting the rights of their employees. In New York City, employers can no longer ask employ- ees to change their hairstyle after guidance from the NYC Commission on Human Rights banned the practice last month. Although the ban speaks to hair in general, it is clear from the examples provided by the City that the impetus for the legislation was

color to straighten or relax their hair. An employer forcing people of color to obtain a supervisor’s per- mission before changing their hairstyle, but not requiring the same from other people. An employer refusing to hire a person of color with a hairstyle closely associated with their iden- tity, such as cornrows, because the hairstyle does not fit the “image” the employer is trying to project for sales representatives. Additionally, employers cannot use a health or safety concern as a way to ask their workers to change a hair- style. Instead, employers must exhaust every other possible alterna- tive before imposing a ban or restric- tion. Alternatives can include hair- nets, ties, and other options. Dealers should review their existing grooming and appearance policies to eliminate any policy that may violate this recent guidance interpreting the city human rights law. n n

Key Fob Replacement Service Contracts 11

Key fobs are costly to replace in the event they are inoperable, lost, damaged or stolen. These fobs use sophisticated theft deterrence technology which involves microchips uniquely programmed for each individual key and, often allow for convenient keyless entry and keyless or remote start. GNYADA supported a Senate bill which would allow dealers to sell key fob replacement service contracts.

Service Contracts Dealers Can Now Sell Currently dealers may offer service contracts to consumers that cover: n Tire damage from road hazards; n Chips and cracks to windshields, and n Paintless dent repair.

The bill allowing dealers to sell key fob replacement service contracts passed the Senate and GNYADA is working on getting the bill through the Assembly and signed by the Governor.

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Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • April 2019

12 I’m Quitting – Leave Now

employee to give advance notice of the resignation (e.g., two weeks or more) as a courtesy. If the employee does not work and is not paid during the notice period, the Department of Labor (DOL) may find that the employee was terminated, which means they will be entitled to unem- ployment! In these situations, the DOL has ruled that unemployment benefits are not limited to only the notice time period. Termination If an employee is terminated, they will usually qualify for unemploy- ment benefits, unless the termination was for misconduct. Misconduct includes serious transgressions such as theft, violence, on-the-job drug use, job abandonment, or violation of

company policy rules, to name a few. Misconduct does not include perform- ance-related terminations or tradition- al layoffs. Resignation If an employee voluntarily leaves the dealership, they will not usually qual- ify for unemployment insurance bene- fits. Before risking turning a resignation into a termination, dealers should consider how this may impact their obligation to provide unemployment insurance coverage. There are times when it is important to have an employee leave the premises immedi- ately after giving notice. Steps to take when an employee gives notice

Requiring an employee to leave immediately, may convert a resigna- tion into a termination. When an employee gives two weeks’ notice and the dealership asks them to leave immediately . . .what happens? Dealers must be careful about treating a resignation as a termination for the purposes of unemployment eligibility. It is customary for a resigning

As GNYADA Field Reps, Len Telvi and Aaron Brown, vis- ited dealerships this month, they were asked if a dealer may deduct from an employee’s wages to cover property or equipment damage caused by the employee. For example, if an employee damages a vehicle due to their own irre- sponsible act, such as speeding. The answer is: No. Deductions cannot be made from a worker’s wages unless it is required by law, such as child support payments; or unless the employee has expressly authorized a deduction to cover services like health clubs or daycare centers. According to the New York State Department of Labor’s website: “… if an employee takes or damages property belonging to the employer, the employer may not recoup the value of that property by withholding all or a portion of that employee's wages. The employer, like any other party aggrieved by the negligent or criminal behavior of another, must pursue whatever remedies are available [under the] law. He may not simply confiscate wages due to his employee without a court order permitting him to do so.” Can Wages Be Withheld to Cover Losses? Questions from the Field

NEW FEATURE!

GNYADA Membership Services: GNYADA’s Field Services team keeps dealers aware of current and pending issues. They assist dealers daily, keeping them updated with the information they need to run their businesses. This personal contact helps ensure our programs are relevant to dealers and their employees. During visits, members stock up on labor, service and shop posters. DMV forms, seminar registra- tion materials, and other useful items are available through the field team. Representatives may also complete a walk-through of the dealership, inspecting each area for potential EPA, OSHA, and Privacy Act violations as well as proper signage. If you would like to schedule an appointment with our Field Services team, please call the Association at 718.746.5900.

8 Greater New York Automobile Dealers Association • www.gnyada.com The Newsletter • April 2019

13 Form I-9 Employment Documentation Requirements

Employers are required to complete and retain a Form I-9, in paper or electronic form, for every employee. Form I-9 verifies the identity and employment authorization of individ- uals hired in the United States. For each new hire, employers must ensure proper completion of the form, which is completed by both the employer and the employee. On the form, an employee must: Attest that he/she is authorized to work. Present documents demonstrating their identity and employment authorization. n n

The employer must then examine and verify the employee’s documents and record the information on the form. If the documents appear genuine upon examination, you must accept them. To do otherwise could be an unfair immigration-related employ- ment practice. If the documents don’t appear on their face to be genuine or to relate to the person presenting them, do not accept them. Employers are required to retain completed I-9 forms for at least three years following the employee's date of hire or for one year following their separation from the company, whichever is later. Since these forms contain personal

identifying informa- tion, they should be kept in a sepa- rate file, not the employee's person- nel file, and stored in a secure space that only authorized personnel can access. If a dealer uses electronic storage, access should be limited to authorized personnel only. Proper retention is essential, as dealers may be required to submit the original form during an audit.

We Need Your Assistance PLEASE CoMPLETE AND RETuRN ENCLoSE D SuRVEY

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The Economic Impact Study is one of the most important surveys the Association does. The data collected allows GNYADA to demonstrate the positive impact dealers have on metro NY and to inform legislators about dealers’ importance to the economy. The purpose of the GNYADA Economic Impact Report is to focus attention on the immense contributions made by the retail automotive industry to the State’s economy. The report touches on the contribution’s dealers make in their communi- ties through the creation of jobs, and the generation of sub- stantial tax revenue for State and local governments. Please take a few minutes to complete the survey and for- ward it to our third-party partner, Auto Outlook, as soon as possible. If you have multiple rooftops, please complete a form for each dealership. Keep in mind that this survey is strictly confidential. GNYADA will never see any completed survey, and all analysis and reporting will be handled by Auto Outlook. Please contact Jennifer Berman at jennifer@gnyada.com for more information.

201 ECONOMIC IMPACT STUDY SURVEY

This study is an important legislative and public relations tool for the Greater NewYorkAutomobile DealersAssociation. If you operate more than one dealership, please us one form for each

VEHICLESALES (dollars) - 2018RESULTS NewVehicleSales (Including Leasing) $ UsedVehicleSales $

VEHICLESSOLD (UNITS) - 2018RESULTS NewVehicleSales (Including Leases) UsedVehicleSales

SERVICEANDPARTSDEPARTMENTS - 2018RESULTS TotalServiceDepartmentSales $ TotalParts andAccessoriesSales $

REPAIRWORK - 2018 TotalNumber ofRepairOrders

PERSONNEL (asofDec. 31, 2018) NewVehicleSalesDepartment UsedVehicleSalesDepartment ServiceDepartment Parts andAccessoriesDepartment Title andRegistration (Billing) $%# %! * VehiclePrep Other Approximate # of current job openings:

TOTALDEALERSHIP - 2018RESULTS TotalSalesAllDepartments $ TotalExpense $ TotalAdvertising $ TotalPayroll $ !% # *%$ $ CAPITAL IMPROVEMENTS 2017& 2018 2017Capital ImprovementExpenses $ 2018Capital ImprovementExpenses $

%OFADVERTISINGEXPENSESBYMEDIATYPE Digital % Radio

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CHARITABLECONTRIBUTIONS - 2018 TotalCharitableContributionsMade $

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TAXESCOLLECTEDANDREMITTED - 2018 FederalPayrollTaxes (S.S.& income) $ State/LocalPayrollTaxes $ RealEstateTaxes $ StateSales andUseTaxesCollected $ OtherState/LocalBusinessTaxes $

DEALERSHIPLOCATION Bronx

Putnam Queens

Dutchess

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Richmond Rockland

Manhattan

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Westchester

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ALL SURVEY RESULTSARE STRICTLY CONFIDENTIAL

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Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • April 2019

Employee Steals $250,000 in Parts BEST PRACTICE: CoNDuCT REGuLAR PARTS AuDITS

15

To avoid a similar situation, dealers should do the following: 1. Implement proper inventory counting procedures. Split responsibilities so different staff members are responsible for distribution and receiving, and control access to inventory. 2. Monitor all inventory at irregular dates, including slow moving products (these items are more susceptible to theft as it may take time to notice missing items). 3. Hire a professional. Increase productivity and detect fraud by outsourcing inventory counting services, particularly for large jobs. 4. Install security systems and instill a work environment focused on over the phone, collect as much information about the card as possible. In addition to the expiration date, get the cardholder’s full name, the address and phone number associated with the card, also ask for a driver’s license number. The higher the likelihood of being caught in a lie, the more likely a criminal is to abandon the scam. Watch for these red-flags: first time customers (those who are not in the dealership’s customer database) attempting to make large purchases over the phone, or making large transactions at the parts counter. If a purchase doesn’t “smell right”, enlist third-party help! Ensure all employees are trained on your dealership Red Flags Rule n n

Ineffective inventory controls and internal fraud can have a significant impact on a dealership’s bottom line. Recently, a dealership was the victim of a car parts fraud which was run by one of its own employees. For nearly four years, the employee stole parts – totaling nearly $250,000 – to sell online and falsified inventory to cover their tracks. Controlling inventory may have additional benefits. Dealerships that manage assets and physical inventories can reduce inventory storage costs and better service customers by having the right inventory on hand when orders come in. Last month, GNYADA learned that a dealer was a victim of credit card fraud. The parts department received a phone order for $25,000, which the customer paid in full, using a credit card. When the parts arrived at the dealership, the customer sent a courier to pick up the order. Two weeks later – when the parts were long gone –it was learned that the transaction had been fraudulent and the entire $25,000 was charged back to the dealership. Chargebacks are a costly and unfortunate fact of life for many businesses that accept credit cards. However, there are ways dealers can protect against chargebacks, reduce your risk, and provide higher levels of security for your dealership and your customers: 16

integrity where employees feel valued. 5. Treat physical assets like monetary assets, taking appropriate steps to protect and easily assess them. While computer programs make inventory management easier, they can also be used to hide fraud. Nothing can replace physical inventory counting as an essential process to protect against fraud and loss. GNYADAAllied Member, H and H Dealer Services can help audit your parts inventory. Email Devon Hodgson devon@handhdealerservices.com or call 908.979.9717 or 908.929.9001. Policy’s Identity Theft Protection Plan (ITPP). Dealers are required to: 1. Identify the Red Flags that affect your dealership 2. Determine how you will detect those Red Flags, and 3. Decide how will you respond when you detect a Red Flag. Dealers must evaluate their ITPP each year and make changes to improve security where necessary. All GNYADA members can contact Xenex Payment Systems, a GNYADAAllied Member, if an employee isn’t getting the proper information on a cardholder. Xenex’s support team (888.918.4409) can offer coaching tips on what questions to ask and how to prevent a fraudulent transaction from occurring. For information on how Xenex can help secure your credit card transactions contact the Association, at 718.746.5900.

Credit Card Fraud Cost Dealer $25,000

When taking credit card payments

n

10 Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • April 2019

17 Auto Dealers Deliver 50,000th Coat to New Yorkers in Need

Once again, dealers went above and beyond in their efforts, displaying decorated drop-off bins in their showrooms, promoting the drive on their websites, and creating videos and social media posts to encourage customers to donate. “I’m extremely proud that our New York auto dealers continue to be the top multi-location coat collecting partner for the New York Cares Coat Drive and that we have achieved a tremendous milestone like this: helping 50,000 New Yorkers in need stay warm in the winter,” said Mark Schienberg, President of GNYADA. GNYADA offers an enormous thank you to the dealers who participated in the 2018-2019 coat drive, helping the Association remain New York Cares’ single largest corporate coat donor. GNYADA also thanks the students from Lincoln Technical Institute who assisted with loading the trucks and a special thank you to Freeman Decorating for providing extra helpers and the two 26-foot trucks used to deliver the 8,000 coats to New York Cares.

GNYADA President Mark Schienberg, Volvo Manhattan President Brian Miller, & Bronx Borough President Rubén Díaz Jr. deliver GNYADA's 50,000th donated coat to New York Cares Chief Program Officer David DeLuca

In the thick of this winter’s bitter cold, franchised new car dealers in the New York metro area have hit an impressive milestone by collecting 50,000 winter coats for those in need. This year, GNYADA delivered more than 8,000 coats our members donated and collected to New York Cares, bringing our all-time 7-year total to over 50,000 coats.

GNYADA commemorated this milestone at Volvo Cars Manhattan joined by its President Brian Miller, New York Cares Chief Program Officer David DeLuca and Bronx Borough President Rubén Díaz Jr. This year, 180 GNYADA dealerships signed up as collection sites. The coats these dealerships collected and donated make up 10% of the total coats collected by New York Cares.

Congratulations!

It’s a boy! In the very early morning of December 4th Kelsey Hering, Dealer Services Coordinator and her fiancé Ryan Kuil, welcomed Dylan Thomas. Dylan made his entrance at 8 lbs. and 19.5 inches long. Later that same day, GNYADA receptionist, Saphia Virapen and her partner Glenford David welcomed welcomed Sethford Lee Wyatt David. Seth weighed in at 7.4 lbs. and was 19.7 inches. It’s a girl! GNYADA’s In-House General Counsel, Julie Mercer and her partner Armin Hamidovic welcomed Stella Elizabeth to their family on February 17th. Stella weighed in at 7 lbs. 3oz. and was 19.5 inches.

Seth

Dylan

Stella

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Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • April 2019

IN MEMORIAM Condolences We are saddened to inform you Henry Pollak II, passed away last month at the age of 96. Henry, father of GNYADA outside counsel, Bill Pollak is survived by his devoted wife of 70 years, four of his five sons and their wives, 11 grandchildren, 16 great grandchildren; and a sister. A man of many talents, quick wit, ready humor. Graduate of the Taft School and Yale University. During WWII, he served in the army in New Guinea and Pacific theatre in Office of Strategic Services (OSS). Third generation President and Chairman of importing firm, Henry Pollak Inc. (Pollak Import/Export). Dedicated to his community, he served 50 years on the Board of White Plains Hospital, 6 years as its President, and 18 years on the Board of Jewish Home Life Care Sarah Neuman Center. According to his family, his love and enjoyment of his close expanding family will remain his greatest legacy. Donations can be made to White Plains Hospital.

Make Full use of Your GNYADA Benefits

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For over a century, GNYADA has committed to ensuring the success and profitability of its members with services that refine and enhance dealers’ operations. We encourage you to utilize each of our benefits and programs for your business. Below are some of the crucial services GNYADA provides to its members:

The GNYADA Insurance Brokerage covers all of your deal- ership’s insurance needs, including health and dental coverage, workers’ comp, disability, life insurance, medicare and flexible spending accounts. The Brokerage also consults dealers on mandated changes to their insurance offerings and helps them stay compliant with IRS form filing. Learn more at gnyada.com/dealers/insurance/overview . DMV-DIRECT processes titles and registrations for dealers and can handle rush duplicate titles in as little as three days. In addition to helping dealers with plate transfers, renewals, and VIN searches, DMV-DIRECT is also the only partner outside of Connecticut that can issue Connecticut plates. Visit gnyada.com/dealers/registration/overview . The Association’s Bond Program secures required bonds for dealers throughout our region. In addition to offering members the lowest rates on new car dealer surety bonds ($300 for a two-year, $50,000 bond), the Association helps dealers with Permit Bonds, Utility Bonds, and many others. To learn more, email jennifer@gnyada.com . Each year, GNYADA holds more than 60 specialized Workshops & Seminars for dealers. Trainings are conducted by expert instructors and are designed to improve dealership operations and enhance profitability. To review upcoming courses at GNYADA’s Center for Automotive Education & Training, visit gnyada.com/dealers/professional/overview.

PROGRAM OND A AD GNY B

Greater New York Automobile Dealers Association 18-10 Whitestone Expressway l Whitestone, NY 11357

Dealer Hotline: 800.245.4640 Headquarters: 718.746.5900 email: assistance@gnyada.com DMV-DIRECT: 718.747.0400

GNYADA Insurance Brokerage, LLC: 718.746.8100 New York International Auto Show: 718.746.5300 Center for Automotive Education & Training: 718.640.2000

The information contained in this newsletter may not be relied upon for the avoidance of tax penalties. Readers are urged to discuss any issues raised in this newsletter with their legal and tax professionals.

Printed on FSC certified material. All original material except where noted. © GNYADA 2019

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Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • April 2019