PNC Bank will pay its some of its mortgage loan officers $16 million to settle a lawsuit brought under the Fair Labor Standards Act. The mortgage brokers claimed they were denied overtime and proper commissions. The case was originally filed by 4 loan officers in August, 2015.
PNC employs loan officers throughout the United States. Until recently, they were paid strictly on commission with a monthly draw. The draw was subject to recapture after the commissions are calculated and distributed. Like many mortgage companies, the bank tried telling their brokers that they were “exempt” from federal overtime laws. Not so and PNC knew better!
A different group of PNC loan officers from Ohio previously sued the bank in 2011 for overtime violations. PNC settled that case in 2014 for $7 million. After that case resolved, PNC told loan officers they were now going to receive a $24,000 salary plus commissions.
According to the complaint, these folks were given no choice. Sign the new agreement or leave.
Most stayed but once again, paying workers salary doesn’t make them automatically exempt from overtime.
Breaking into the mortgage business isn’t easy. For most, success means long hours. It’s hard to work 9 to 5 when your prospective clients need to drop off paperwork after hours or can only meet on weekends. PNC knew, or certainly should have known, that their mortgage bankers were working long hours. Hours that exceeded 40 per week.
In some instances, loan officers worked so many hours that at $24,000 salary, they didn’t even make minimum wage!
PNC settled the case for $16,000,000 and was not required to admit liability. The settlement order says,
“PNC denies all of the allegations made by the Plaintiffs in the Litigation and denies that it is liable or owes damages to anyone… Nonetheless, without admitting or conceding any liability or damages whatsoever, PNC has agreed to settle…”
This settlement comes on the heels of another multimillion PNC overtime case. This one involving assistant managers. That case resolved for $6 million in November.
Fair Labor Standards Act and Overtime
Under the federal Fair Labor Standards Act (FLSA), employees that work more than 40 hours in a 7-day period are entitled to overtime pay. The overtime pay rate must be at least 150% of base pay (“time and a half”).
Congress enacted the FLSA to insure people are properly compensated for their work. Although passed at the tail end of the Great Depression, the law still has teeth. Unfortunately, outside sales reps and certain professionals are exempt.
Are mortgage loan officers exempt? Probably not. A series of recent cases suggests that private bankers and mortgage loan officers are not exempt. That means they qualify for overtime pay.
Are you required to give out a cell number and take calls outside work? Are you required to catch up on work in your off hours or check emails? Those overtime hours can quickly add up.
Takeaways for Mortgage Loan Officers
There are two takeaways from this case. First, simply because your employer says you are exempt from overtime is meaningless. That you are salaried or labeled a “professional” carries no weight either. The true test is your actual job duties, not the employer’s label.
Second, the PNC case shows that even if your employer recently settled an overtime case doesn’t mean they are now doing things correctly.
The wage theft and overtime fraud lawyers at MahanyLaw handle large, complex overtime cases. Whether you are part of a group of 50 or 1000+ workers, we can help. Failure to pay overtime or minimum wage is illegal. Workers are entitled to double damages and legal fees. And your employer can’t retaliate simply because you file a claim.
For more information, contact attorney Brian Mahany at or by telephone at (414)704-6731 (direct). There is no obligation and the call is completely confidential. (Check out our FLSA overtime information page too!)
Our FLSA lawyers can help whether you are in finance, construction, heavy industry or retail. Because of our decades of experience in the banking and lending areas, we especially welcome claims from loan officers and bankers.