Overtime wages for mortgage loan officers depend on their job duties and how they are classified under the Fair Labor Standards Act (“FLSA”) and applicable state laws.
In March 2010, the Department of Labor issued interpretative guidance that mortgage loan officers are non-exempt hourly employees. In 2015, the United States Supreme Court ruled that mortgage loan officers are entitled to overtime pay under the FLSA, with some exceptions.
In 2020, the Wage and Hour Division of the U.S. Department of Labor unveiled a pair of definitive regulations under the Fair Labor Standards Act, focusing on overtime compensation. The initial rule revision targeted the FLSA’s overtime exemption applicable to commissioned employees engaged in retail or service roles. The second regulation aimed to refine the approach of compensating overtime to salaried, non-exempt employees through the “fluctuating workweek” method as outlined by the FLSA.
Overtime Wages for Mortgage Loan Officers
Over the years, there have been many disputes and court cases regarding the classification of mortgage loan officers under the FLSA. It is still a murky area for employers and employees. However, most all mortgage loan officers are entitled to minimum wage and overtime compensation.
Currently, the Wage and Hour Division (“WHD”) categorizes the vast majority of mortgage loan officers/loan officers as legally entitled to overtime pay. Mortgage loan officers often work outside of regular hours and long hours, which qualifies them for overtime wages.
Consequently, they are required to maintain records of their working hours and receive additional compensation for overtime hours exceeding 40 in a workweek. However, it’s up to the employer to evaluate the employees’ job duties and responsibilities to ensure they comply with FLSA overtime laws.
Thus, you should contact us if you are a mortgage loan officer and do not receive overtime pay. Your employer is very likely violating federal and state wage laws.
Who is Exempt From Overtime Wages?
Mortgage loan officers don’t qualify for overtime pay under some very limited FLSA exemptions.
Highly Compensated Employee Exemption
The Highly Compensated Employee (“HCE”) exemption provides an exemption from overtime pay requirements for certain high-earning employees who meet specific criteria.
An employee must meet the following criteria to qualify for the HCE exemption.
Salary Threshold: The employee must receive a total annual compensation of at least the threshold amount set by the Department of Labor (“DOL”). Proposed changes to the HCE are expected in April 2024. The minimum salary for application of the HCE exemption would jump by 34%, from $107,432 per year to $143,988 per year.
Primary Duty: The employee’s primary duty must include performing office or non-manual work. This can consist of executive, administrative, or professional responsibilities defined by the FLSA regulations. Mortgage loan officers do not qualify for this duties test because their primary duty is sales, and not administration or professional.
Customarily and Regularly Perform Exempt Duties: The employee must customarily and regularly perform at least one of the duties of an exempt executive, administrative, or professional employee, as defined by the FLSA regulations.
Outside Sales Exemption
This exemption applies to employees whose primary duty involves making sales or obtaining orders for goods or services while regularly working away from their employer’s place of business. Many mortgage sales employers try to use this exemption as an excuse not to pay loan officers overtime. However, the current nature of the mortgage business does not require mortgages to be sold at the customer’s home or place of business. Indeed, refinance mortgage sales occurred at an all time high during Covid when no one was traveling to conduct face to face business. Furthermore, mortgage companies continue to digitize their processes which further limits inperson contact between loan officers and clients.
Common Overtime Violations
Unfortunately, Rowdy Meeks LLC sees many employees who have been the victim of overtime violations.
Common violations are:
- Misclassification of employees
- Failure to pay overtime
- Off-the-clock work
- Automatic deductions for meal breaks
- Miscalculation of overtime rate
Have You Been Denied Overtime Pay?
You may be entitled to back wages and overtime if you are a mortgage loan officer who has been denied overtime pay.
Knowing your rights can help you get the pay you deserve. Contact Rowdy Meeks Lega Group LLC to discuss your overtime wages.