Employment Advisory for Financial Institutions 
Published by Howard & Howard Attorneys PLLC

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June 25  2012
Greetings!
 

Thank you for taking the time to read this Howard & Howard Employment Advisory for Financial Institutions.  We are pleased to provide our clients and friends with periodic updates on issues, industry developments, and regulatory changes to help you address the changing challenges facing employers.  As always, if you have any questions, please feel free to contact any of the
Howard & Howard Labor, Employment and Immigration 
attorneys. 

FEDERAL COURT AGREES WITH DEPARTMENT OF LABOR THAT LOAN OFFICERS DO NOT QUALIFY FOR ADMINISTRATIVE EXEMPTION FROM OVERTIME PAY OBLIGATIONS

        

   

The Fair Labor Standards Act ("FLSA") generally requires a covered employer to pay overtime wages to employees who work more than 40 hours per week unless they are exempt. The FLSA provides such an exemption for any employee employed in a bona fide executive, administrative or professional capacity or in the capacity of an outside sales person.

           

 In March 2010, the U.S. Department of Labor created a considerable stir by issuing Administrative Interpretation 2010-1.   The Administrative Interpretation expressed that to qualify for the exemption, an employee's work must be directly related to management or general business operations of an employer, which includes work in functional areas such as accounting, budgeting, quality control, purchasing, advertising, research, human resources, labor relations, and similar areas. In essence, the 2010 Administrative Interpretation states that the administrative exemption was designed for employees whose work involves servicing the business itself, rather than selling the business' product or service.  The Administrative Interpretation concluded that most mortgage loan officers, because of their typical duties, do not qualify for the administrative exemption from overtime pay under the FLSA.

           

On June 6, 2012, a federal district court in the District of Columbia upheld Administrative Interpretation 2010-1. Unless there is a successful appeal of this decision, or unless other courts refuse to follow the logic of Administrative Interpretation 2010-1, many mortgage loan officers will be found to be entitled to overtime pay, depending on the nature of their day-to-day duties. Banks should immediately set about evaluating the job duties of their mortgage loan officers if they have not already done so after issuance of Administrative Interpretation 2010-1.

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Chicago, Peoria, Detroit, Ann Arbor, Las Vegas
In This Issue
Federal Court Agrees With Department of Labor That Loan Officers Do Not Qualify For Administrative Exemption From Overtime Pay Obligations
About Howard & Howard
Attorney Spotlight
Michael R Lied

Michael R. Lied is a Member of Howard & Howard Attorneys PLLC's Labor, Employment, and Immigration Practice Group.  Mr. Lied is the former Chair of the Illinois State Bar Association's

 Labor and Employment Law Section Council and represents employers throughout the Midwest.

Attorney Spotlight
Michael Gifford
is a Member of Howard & Howard Attorneys PLLC's Labor, Employment and Immigration Practice Group, and represents employers throughout the Midwest.
This Advisory is intended for informational purposes only, and is not offered as legal advice.  Please call a qualified attorney for counsel related to your particular situation.