On March 24, 2010, the United States Department of Labor, Wage & Hour Division (“WHD”) issued an “Administrator’s Interpretation” declaring that employees who perform the typical job duties of a mortgage loan officer do not qualify for the administrative exemption under the Fair Labor Standards Act (“FLSA”)1.

The WHD determined, based upon its own investigations and the facts set out in case law, the following are typical mortgage loan officer job duties:

  • Receive internal leads and contact potential customers or receive contacts from customers generated by direct mail or other marketing activity.
  • Collect required financial information from customers they contact or who contact them, including information about income, employment history, assets, investments, home ownership, debts, credit history, prior bankruptcies, judgments, and liens. 
  • Run credit reports. 
  • Enter the collected financial information into a computer program that identifies which loan products may be offered to customers based on the financial information provided.
  • Assess the loan products identified and discuss with the customers the terms and conditions of particular loans, trying to match the customers’ needs with one of the company’s loan products.
  • Compile customer documents for forwarding to an underwriter or loan processor, and may finalize documents for closings.

Additionally, the WHD issued the following statement with regard to Administrator Interpretations:

“Administrator Interpretations will set forth a general interpretation of the law and regulations, applicable across-the-board to all those affected by the provision in issue. Guidance in this form will be useful in clarifying the law as it relates to an entire industry, a category of employees, or to all employees. The Administrator believes that this will be a much more efficient and productive use of resources than attempting to provide definitive opinion letters in response to fact-specific requests submitted by individuals and organizations, where a slight difference in the assumed facts may result in a different outcome.”

On July 2, 2013, the DC Circuit Court of Appeals decided Mortgage Bankers Association v. United States DOL 2, and therein vacated FLSA 2010-1. As the Court noted, in 2006 the WHD issued an opinion letter “concluding on the facts presented that mortgage loan officers with archetypal job duties fell within the administrative exemption.” The Court reasoned that WHD had issued a definitive interpretation in the 2006 opinion letter, and although it is free to adopt a later, conflicting interpretation, it must comply with the Administrative Procedures Act notice and comment rulemaking to do so.

The question remains for employers: does WHD have a list of “borderline” positions for which it is reviewing existing opinion letters and case law to glean “typical” job duties, so as to make broad, sweeping pronouncements about the exemption status of entire classes of jobs with a view toward causing mass reclassification by employers? It is difficult to predict whether this is the case, however, employers can always proactively review jobs that have traditionally been difficult to classify and have been the subject of significant debate and litigation.