Washington, DC Court of Appeals rules on exemption status
The Washington, D.C., Court of Appeals recently reversed its ruling on a U.S. Department of Labor Administrator's Interpretation that impacts time and attendance policy in the banking industry. As a result of the new decision, the FLSA currently defines mortgage loan officers as exempt employees. Initially, a 2006 decision supported the current status of loan officers, but the 2010 ruling determined this type of worker should be classified as non-exempt, meaning they had to be compensated for working overtime hours and must receive payment equal to federal minimum wage standards.
Brian Pedrow, partner at Ballard Spahr law firm, told HousingWire this ruling puts employers in a difficult situation. Should they continue treating employees as non-exempt or discontinue overtime payments? Richard Andreano, also of Ballard Spahr, explained that the current ruling reflects an older view of compensation for overtime hours, and that the mortgage industry's most logical response would be to appeal to the U.S. Congress to highlight the issue.
However, The National Law Review indicated the ruling is not impervious to change, meaning more rulings decided by the court of appeals could affect how the FLSA impacts mortgage loan officers. The Review recommended that employers follow the 2010 classification, as it is less financially risky for companies to continue with the 2010 decision.
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