In the first of its administrator’s interpretations, the DOL stated an apparent change in its position with respect to the exempt status of mortgage loan officers. While the DOL had previously taken the position that mortgage loan officers can qualify as exempt from the overtime and minimum wage requirements of the FLSA under the administrative exemption, the DOL narrowed its analysis of this exemption in a March 24, 2010, administrator’s interpretation. Click here to view that interpretation.

In overruling and withdrawing two opinion letters it had issued on the subject (one in 2006 and one in 2001—both viewed as favorable to employers), the DOL stated that the “typical” job duties of a mortgage loan officer do not qualify for the administrative exemption. The DOL also reiterated that it is the employee’s actual job duties and compensation, and not the job title, that determine whether an employee is exempt.

The DOL assumed that the primary job duties of mortgage loan officers include receiving leads for potential customers, collecting financial information from such customers, entering the collected financial information into a computer program that helps the loan officer identify available products, assessing the loan products available and discussing the terms and conditions of the available options with customers in order to make a sale. Based on the analysis of these duties, the DOL concluded that the “primary duty” of these “typical” mortgage loan officers is “making sales” and engaging in the production work for their employers.

Because the administrative exemption applies only to workers who are primarily engaged in work directly related to the internal management or general business operations of their employer or their employer’s customers, and not the day-to-day production or selling of the employer’s products, the administrator’s interpretation is that employees who perform the typical job duties of a mortgage loan officer do not qualify as bona fide exempt administrative employees.

The DOL acknowledged that it is possible that a mortgage loan officer may meet the requirements of the administrative exemption; however, employers must closely examine employees’ job duties and compensation to determine whether the requirements of the administrative exemption, or any of the other recognized FLSA exemptions, are met. 

Employers who are required to reclassify mortgage loan officers as non-exempt employees must ensure that the compensation system meets the minimum wage and overtime requirements of the FLSA. In addition, employers must keep accurate records of hours worked and comply with other recordkeeping requirements of the FLSA.