Wage and Hour Division Begins Issuing Administrator Interpretations, Concludes Mortgage Loan Officers Are Not Administrative Employees
On March 24, 2010, the Wage and Hour Division (WHD) of Department of Labor announced that the Administrator will no longer issue definitive fact-specific opinion letters submitted by individuals and organizations. WHD will now issue Administrator Interpretations intended to be “general interpretations of the law and regulations, applicable across-the-board to all those affected by the provision in issue.” In response to requests for opinion letters, WHD will provide “references to statutes, regulations, interpretations and cases that are relevant to the specific request but without an analysis of the specific facts presented.”
In its first such Interpretation, the Deputy Administrator concluded that issued that mortgage loan officers do not qualify as administrative employees exempt from the provisions of the Fair Labor Standards Act (FLSA). The Interpretation states that the “primary duty” of mortgage loan officers is sales and therefore, “mortgage loan officers perform the production work of their employer,” namely, selling financial products akin to loan officers, who are consistently described as outside sales people. This Interpretation does not address whether the sales duties of any particular loan officer fall within the outside sales exemption or are limited to inside sales.
The Interpretation also withdrew Wage and Hour Opinion Letter FLSA 2006-31 (Sept 8, 2006) and other with the same analysis. The 2006 opinion letter misinterpreted 29 C.F.R. §541.203(b) by assuming that an alternative standard for the administrative exemption applied to the financial services industry. The regulation is intended only to provide an example distinguishing financial sector employees whose primary duties are related to management or general operations with those who sell financial products.