The Fair Labor Standards Act dates back to 1938. Although many people have not heard of the law, they are familiar with its terms. Non management and not administrative employees are entitled to overtime pay for work in excess of 40 hours. That includes overtime pay for many mortgage, banking and stockbrokerage employees.
Many mortgage brokers and stockbrokers work long hours trying to meet sales quotas. Some single broker branch offices are required to be open a certain number of hours while other work long hours simply hoping to make a modest living. Either way, qualified employees are entitled to both minimum wage and overtime.
It’s ironic that the average laborer is more well versed in the overtime laws than financial services employees. White collar workers mistakenly believe that because they wear a suit and tie, they are exempt from overtime laws. They are wrong.
The U.S. Department of Labor issued a comprehensive statement on mortgage loan officers in 2010. In that review, the department said that loan officers do not fall within the management and administrative exemption to the Fair Labor Standards Act overtime requirements. While quality control workers might be administrative employees, those involved in production are not.
In recent years a number of mortgage lenders and banks have been hit with overtime suits. Previously we wrote about Merrill Lynch after it was forced to settle with 12,000 workers. There are hundreds of cases, however, involving smaller lenders and mortgage brokers that don’t receive much publicity. Despite the proliferation of these suits, there is still an attitude in the lending industry that mortgage brokers are exempt.
Some of that attitude is caused by the mortgage lenders themselves. Just because you are called an independent contractor or have a “management” title doesn’t mean you are exempt. When it comes to overtime and the Fair Labor Standards Act, it is the substance and not the label that counts.
If you are a mortgage broker and feel that you have not received proper overtime compensation, give us a call. Bank and brokerage firm employees should contact as well. The losses from working through breaks and meals, being forced to work weekends without overtime and the like can add up quickly. When brought as a class action there is a certain safety in numbers.
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