In the recent case of Perez vs. Mortgage Bankers Association (MBA), the Supreme Court issued their final ruling on March 9, 2015, stating that the Department of Labor (DOL) had the right to change its interpretation, with or without public comment or notice, of the law pertaining to the administrative exemption under the federal Fair Labor Standards Act (FLSA).
This further resulted in a determination that Mortgage Loan Officers are not exempt from overtime under the administrative exemption of the FLSA. Mortgage Loan Officers are required to be paid overtime, as non-exempt employees, unless the employer can prove that their position fits the requirements under a different FLSA exemption (such as outside sales or highly compensated). A long running issue, in 2010 the DOL reversed an earlier decision in which loan officers were granted an exempt status under the FLSA.
How does this apply to you? If you are a financial institution, it means that your Mortgage Loan Officers should not be classified as exempt under an administrative exemption. A professional and thorough evaluation of job descriptions, analyzing job duties and essential functions should be the first step in reviewing these positions, determining if they fall under a different exemption, or should be reclassified as non-exempt.
As an employer in a non-finance industry, this should be a reminder of the necessity of well written and accurate job descriptions for all of your positions and employees. If you’re uncertain as to whether or not certain positions should be classified as exempt or non-exempt, or have concerns with how current positions are classified, a professional, in-depth audit of the job descriptions to ensure compliance with federal regulations may be necessary. Compliance with these regulations is vital in ensuring that your organization is not subject to potential lawsuits pertaining to wage-and-hour law.