The White House is moving ahead with plans to require overtime pay protections to lower-salaried managers who don't qualify for them currently, and it could have a direct, deleterious impact on the mortgage lending space.
The move could affect millions of workers, including mortgage loan originators.
Under current labor rules, employers don’t have to provide overtime to exempt workers making more than $23,660 a year, classifying them as salaried.
This would apply to lower paid managers, administrators and to sales employees.
Analysts say they expect the Department of Labor will – supposedly in February but possibly in March – propose raising the threshold to somewhere between $40,000 and $55,000, along with new restrictions on what it takes to classify a position as “exempt.”
While employees could gain overtime pay, they might lose in terms of schedule flexibility, paid leave, merit-based incentives that come from salaried positions, and vacation plans.
National Association of Mortgage Bankers President John Councilman said that doubling the exception for overtime exemption would hurt employees more than anything.
“NAMB believes doubling the exception for managers, administrative positions and sales employees is both unnecessary and counterproductive. True sales people, such as mortgage loan originators, work best under commission,” Councilman said. “This prevents them from being laid off when business is slow while allowing them to make high wages when business activity is high.
“The proposal would push employers to artificially manipulate employees hours by such things as making them part-time or by preventing them from providing services to consumers when they neared the overtime threshold. We believe the greatly increased proposed overtime threshold will push employee compensation down rather than raise it and harm consumers,” Councilman said.
He also said that this potential change doesn’t square with the dynamic workplace of the 21st Century.
“While well intentioned, the Administration's latest plans to adjust the minimum wage with a one size fits all approach simply ignores the state of the mortgage origination industry and other similar sectors,” Councilman said. “Rather than increase worker's pay, the Administration plan will actually decrease opportunities, especially for workers who telecommute and are utilizing other 21st Century style work arrangements.”