Department of Labor Reverses its Position on Exempt Status of Mortgage Loan Officers

Basically, for those of us who do class action work, the United States Department of Labor ("DOL") declared yesterday that commissioned loan officers are entitled to overtime pay. In so doing, it reversed a 2006 ruling that favored the mortgage firms that employed them. A DOL ruling in September 2006, requested by the Mortgage Bankers Association, classified Loan Officers as exempt "administrators" under the Fair Labor Standards Act. In its new ruling, however, the DOL found that a mortgage loan officer's primary duty is sales, which "falls squarely on the production side of the business" under the Administrative Exemption under Section 13(a)(1) of the Fair Labor Standards Act, 29 U.S.C. § 213(a)(1).

This could be another major area for class actions, as the prevailing mode of compensating Mortgage Loan Officers in California remains one of "commission only." Quintilone & Associates and some associated law firms obtained a $16.65 million dollar class action settlement on behalf of a large group of mortgage loan officers. Please feel free to contact us at req@quintlaw.com if you have any questions about what this new opinion may mean for you.