Court Says Mortgage Loan Officers Not Exempt from Overtime Pay

A federal district court decision in June indicates mortgage banking loan officers do not qualify as being exempt from receiving overtime compensation under the federal Fair Labor Standards Act. 

The issue will likely be settled in a court of appeals, according to analysis of the case by K&L Gates attorneys Thomas Petrides and John Longstreth. 

The Mortgage Bankers Association had challenged a previous interpretation of the rule that reversed an earlier Department of Labor opinion letter concluding mortgage loan officers were generally exempt under the administrative exemption. A judge later ruled in June 2012 that the 2010 interpretation was not inconsistent with the FLSA regulations and was not unlawful. 

“The court thus let stand the DOL’s Interpretation that employees performing the typical duties of a mortgage loan officer do not qualify for the administrative exemption and are therefore entitled to receive minimum wages and overtime compensation under the protections of the FLSA,” the K&L Gates analysis states. “The MBA has the right to appeal this decision to the D.C. Circuit.”

The decision marks one more step in resolving the issue, but is likely to be determined in the court of appeals. 

“While the District Court’s decision is unfavorable to employers seeking to use the administrative exemption to classify loan officers, ultimate resolution of the validity of the 2010 Administrator’s Interpretation will likely be in the Court of Appeals,” K&L writes. 

Read the alert from K&L Gates

Written by Elizabeth Ecker

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