D.C. Federal Court Upholds DOL 2010 Flip-Flop on Exempt Status of Mortgage Loan Officers Under FLSA

Bracewell LLP

Revised Ruling Awards Overtime to Loan Officers; May Affect More Than 250,000 Employees Nationwide

Employers: beware when relying on Department of Labor Wage and Hour Division Opinion Letters. Even better, don’t rely on them.

In the latest in a series of flip-flops, the Department of Labor (DOL) unilaterally changed course in March 2010, withdrawing its September 2006 Opinion Letter to the Mortgage Bankers Association (MBA) affirming that certain mortgage loan officers were "administrative" employees and therefore exempt from the overtime and recordkeeping requirements of the Fair Labor Standards Act (FLSA). Administrator's Interpretation No. 2010-01. The specific loan officers covered by the Opinion Letter spent less than half their time working on "customer-specific persuasive sales activity." Absent an exemption, employers must pay these loan officers overtime for all hours worked over 40 in a workweek and record and maintain supporting documentation. The Bureau of Labor Statistics reports that there were some 289,000 loan officers employed in 2010.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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