SOURCE: Nichols Kaster, PLLP

Nichols Kaster, PLLP

March 25, 2010 12:51 ET

Nichols Kaster, PLLP: DOL Reverses Course, Confirms That Loan Officers Are Entitled to Overtime Pay

WASHINGTON, DC--(Marketwire - March 25, 2010) -  Yesterday, the U.S. Department of Labor Wage and Hour Division (DOL) issued the first ever "Administrator's Interpretation," finding that loan officers are not covered by the administrative exemption and are entitled to overtime pay under the Fair Labor Standards Act (FLSA).

In this unexpected turn of events, the DOL reversed its prior interpretations of the FLSA as it applies to loan officers and withdrew its prior guidance "because of its misleading assumption and selective narrow analysis." The DOL found that "mortgage loan officers typically have the primary duty of making sales on behalf of their employer; as such; their primary duty is not directly related to the management or general business operations of their employer or their employer's customers." In other words, loan officers are typically not exempt under the administrative exemption and are entitled to overtime pay. 

In response to the development, attorney Rachhana Srey of Nichols Kaster, PLLP commented, "This interpretation was long overdue. Opinion letters issued previously by the DOL were based solely on one-sided and misleading descriptions of loan officers' job duties by attorneys and lobbyists for mortgage companies. The DOL's previous position that loan officers could be exempt under the administrative exemption was inconsistent with opinions from courts across the country that were based on a balanced and accurate description of the loan officers' primary duty of selling mortgages."

The DOL's Administrator's Interpretation relies heavily on the 2002 decision in Casas v. Conseco Finance Corp., in which the U.S. District Court for Minnesota held that loan officers were not covered by the administrative exemption. The loan officers in the Conseco case were represented by Nichols Kaster. Since the Conseco decision, attorneys from Nichols Kaster have represented thousands of loan officers from across the country in numerous cases for unpaid overtime wages against banks and mortgage companies like Aames Home Loan, Accredited Home Lenders, Ace Mortgage Funding, American Home Mortgage, Ameriquest, Bank of America, Chase, CTX, Decision One, Delta Financial, First NLC, Heartland Home Finance, Homeowners, New Century, Oak Street Mortgage, Premier Mortgage, Washington Mutual Bank, and Wells Fargo. Nichols Kaster is currently representing loan officers in cases for unpaid overtime against Guardian First Funding, HSBC Mortgage, Paychex, Quicken Loans, and Rock Financial. Individuals may find additional information on the FLSA and Nichols Kaster's experience representing employees at www.overtimecases.com or by calling Nichols Kaster, PLLP toll free at (877) 448-0492. The DOL Administrator's Interpretation is available at http://www.dol.gov/WHD/opinion/adminIntrprtn/FLSA/2010/FLSAAI2010_1.pdf.

Contact Information

  • Contact:
    Rachhana Srey, (612) 256-3239, Nichols Kaster, PLLP