Business Counselor August 1, 2013 David R. Fernstrum

Mortgage Loan Officers Can Once Again Be Exempt From The Fair Labor Standards Act

In 2006, the U.S. Department of Labor issued a formal Opinion Letter determining that the duties of mortgage loan officers satisfied the test for the administrative employee exemption from the minimum wage and overtime requirements of the Fair Labor Standards Act. In 2010, the Department issued an “Administrator Ruling” in which it reversed that previously definitive position. Last week, a United States Circuit Court of Appeals invalidated that ruling, effectively reinstating the earlier position that mortgage loan officers can be exempt.

In essence, the Court ruled that the Department of Labor could not change an established definitive position on the issue unless it complied with the Administrative Procedures Act, which requires a lengthy public process of analysis, comment, review and revision. Because the Department did not go through the required process, the Court vacated the Administrator Ruling. The case is Mortgage Bankers Association v. Harris.

If you have questions about the effect of this decision, please contact one of the labor and employment lawyers at Mika Meyers PLC.

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