The United States’ Supreme Court recently unanimously ruled that mortgage loan officers are entitled to overtime pay when they work more than 40 hours in a workweek. The ruling did have some exceptions, but generally the question as to whether or not mortgage bankers are entitled to overtime pay has been resolved. According to the Supreme Court’s decision, mortgage loan officers are covered under the Fair Labor Standards Act (FLSA).
The Supreme Court Case
The FLSA is the federal law which sets the minimum wage and overtime pay regulations for the country and applies to most employers. In order for an employer to deny an employee overtime, the employee must meet the requirements for one of the exemptions from overtime within the FLSA. From time to time, the Department of Labor (DOL) will issue opinions which are intended to clarify what job positions meet FLSA exemption standards.
In 2001, the DOL’s opinion was that mortgage loan officers were not exempt and were entitled to overtime. In 2004, the Mortgage Bankers Association (MBA) requested clarification on the opinion, and in 2006, the DOL reversed its initial opinion and stated that mortgage loan officers were actually exempt from overtime. Finally, in 2010, the DOL reversed its position again and, in the DOL’s opinion, mortgage loan officers were not exempt from overtime.
Because the decisions were so inconsistent and without warning, the MBA filed a lawsuit claiming the DOL failed to follow proper “notice and comment” procedures when issuing their opinions. The Supreme Court determined that agencies are intended to have the flexibility to interpret and revise their interpretations without completing the more complicated and time consuming process the MBA wanted. As a result, the DOL may continue to issue opinions on how its rules are interpreted.
Administrative Exemption
The MBA was seeking clarification and application of the administrative exemption for mortgage loan officers. Under the FLSA, the requirements for the administrative exemption include a minimum salary of at least $455 per week. Additionally, the exempt employee must have a primary duty of performing office or non-manual work directly related to the management or general business operations of the employer or customers. Finally, the employee must exercise discretion and independent judgement on important matters as part of their primary duty. The DOL’s 2010 opinion stated that mortgage loan officers’ primary duties were sales, which did not meet the administrative requirements.
If you are a mortgage loan officer or mortgage banker who has been denied overtime, you may be entitled to back wages and overtime. Our knowledgeable team of overtime pay lawyers can be reached at (855) 754-2795. Or you can complete our Free Unpaid Overtime Case Review form and our experienced legal team will evaluate your claim. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.