Mortgage Loan Officers Not Exempt from Minimum Wage and Overtime Requirements
For financial service companies seeking to determine a method of compensation for inside mortgage loan officers, the last few years have been confusing with conflicting rulings from the U.S. Department of Labor ("DOL") and the Courts. On March 24, 2010, the DOL instituted a new policy of issuing broad administrative interpretations, rather than fact specific opinion letters, and addressed this issue in its first such Administrative Interpretation. In that Interpretation the DOL has withdrawn a previous opinion letter (FLSA2006-31), which stated that inside mortgage loan officers could be deemed exempt where the employer could establish that their primary job was not sales and that they received a salary. Now, the DOL has stated that inside loan officers, even if salaried, are not exempt because almost universally their primary responsibility is sales. (One bright spot for the industry is that the interpretation does not reject the 2006 opinion letter (FLSA2006-11), which stated that some mortgage loan officers could be deemed outside salespersons exempt from overtime requirements.) The March 24, 2010, Administrative Interpretation can be found at: http://www.dol.gov/WHD/opinion/adminIntrprtnFLSA.htm
Financial service companies that have relied upon the withdrawn 2006 opinion letter and have assumed compliance by paying a salary, with or without additional commissions, but not paying overtime, ought to immediately review that practice for compliance under this new Administrative Interpretation. Shumaker Williams, P.C. stands ready to assist as may be needed. Our Labor and Employment section has extensive experience in the industry and its unique FLSA issues. For more information please contact:
Marc G. Tarlow
717.848.5134
Michael E. Rowan
410.825.5223
This Legal Alert should not be construed as providing specific legal advice.
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