In its first Administrative Interpretation issued since announcing its movement away from Opinion Letters, the United States Department of Labor (“DOL”) has determined that mortgage loan officers typically will not qualify for the Fair Lair Standards Act’s (“FLSA”) administrative exemption.  As a result, employers will now be required to pay overtime and meet the Act’s minimum wage requirements. 

The DOL’s interpretation is limited to employees spending the majority of their time working inside their employer’s place of business.  In examining the duties of typical mortgage loan officers, the DOL focused on the officers’ primary duty.  Because the officers’ primary duty is making sales of loan products rather than performing administrative work related to the company’s “management or general business operations,” the administrative exemption is inapplicable.  In so finding, the DOL interpretation invalidated two opinion letters issued in previous years suggesting that mortgage loan officers were exempt employees. 

The administrative interpretation does not address the FLSA’s outside sales exemption, which applies to certain employees primarily engaged in making sales away from the employer’s place of business.  It does, however, clarify that the administrative exemption could be available to the extent commercial mortgage loan officers primarily serve companies as general financial advisors or as consultants on the proper way to conduct business.  Outside of these possible exceptions, the DOL has made its position clear that mortgage loan officers are generally entitled to the FLSA’s minimum wage and overtime provisions.

For more information about the DOL’s Administrative Interpretation, please see Kilpatrick Stockton's Legal Alert here.