Mortgage Loan Officers - Non-Exempt

Financial Institutions – Mortgage Loan Officers – Non-Exempt Status
I received the following update from a law firm we work with…

On March 24, 2010, the United States Department of Labor withdrew two prior opinion letters regarding the exempt status of mortgage loan officers under the administrative exemption, and announced that the DOL no longer considers mortgage loan officers as bona fide administrative employees under 29 U.S.C. 213 (a)(1) of the Fair Labor Standards Act, thus making them non-exempt employees entitled to overtime.
The DOL’s abrupt change in position on this issue will significantly impact mortgage lender, financial institutions, and other employers in the financial service sector that have relied upon the DOL’s prior determinations regarding the application of the administrative exemption to mortgage loan officers.
The DOL focused exclusively on the qualifier: “As his or her primary duty, perform office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers.”
The DOL relied on the following factors in reaching its conclusion:
• Mortgage loan officers are trained primarily in sales techniques and are evaluated on the basis on their sales volume.
• The “typical” mortgage loan officer’s primary job duties included collecting financial information from customers, entering the information into a computer program to determine particular loan products that might be available to the customer, and explaining the terms, advantages, and disadvantages of the available options to customers so that a sale could be made.
• Mortgage loan officers are paid primarily by commissions.
• Courts have repeatedly held that mortgage loan officers that work at their employer’s place of business have a primary duty of sales.
Because the DOL found that the second prong of the test was not satisfied, it did not analyze whether loan officers met the other two prongs of the administrative exemption.
The DOL’s interpretation makes numerous assumptions about the “typical” duties of a mortgage loan officer, which may or may not be applicable industry-wide


Sign In or Register to comment.