July 10, 2015
Per Origination News, “The Supreme Court upheld the 2010 opinion letter, in which the DOL (Department of Labor) determined that loan officers were not exempt administrative employees and were therefore subject to overtime, minimum wage and timekeeping rules under the Fair Labor Standards Act.”
The Scotsman Guide shared the industry’s disappointment and quoted Fred Glick, chief executive officer at U S Loans Mortgage Inc. Glick “said the ruling will cause some confusion in the industry. Glick believes that large companies typically keep a tight lid on the hours of their employees and probably will not be affected. He said smaller mortgage shops, however, tend to compensate their employees by paying commissions. These companies let loan originators work as much as they want to drum up business.”
Glick shared with author Victor Whitman of the Scotsman Guide that “Loan officers are usually on commission”. He explained further “that it is difficult for loan officers to track their hours because the nature of their job requires working irregular hours to accommodate meeting with real estate agents, attending open houses, etc.”
Scotsman Guide also noted “As of May 2013, there were an estimated 301,860 loan officers, according to the Bureau of Labor Statistics.”
Time and Commission Tracking
Employers in the mortgage lending industry commonly seek to pay loan officers either a guaranteed salary or a draw with a commission. For many small to mid-size agencies the administrative responsibility for managing this scenario is a huge burden and exceeds the ability of most spreadsheets.
QCommission.com fortunately manages both sales commission and time management so that the greater of commissions due or hourly rate are paid in accordance with Exempt Status rules.
Your options are to automate or reclassify your loan officers as exempt, as provided by the FLSA’s administrative exemption. If you take no action, your firm might be exposed to a potential liability for the failure to pay overtime to your loan officer employees.
Currently, Steve is Vice President of Marketing and Channel Development for sales provider CellarStone, Inc. Steve also runs a LinkedIn group called "QuickBooks and Business COaches".
Latest posts by Steve Peterson (see all)
- U.S. Supreme Court Ruling on Loan Officers Exemption Status - July 10, 2015
- Moving Beyond Spreadsheets - July 7, 2015
- Our New e-Book: “The Great Accounting Cloud Land Rush” - December 17, 2014