After many years of issuing and publishing “opinion letters” interpreting the Fair Labor Standards Act, the Wage and Hour Division of the Department of Labor announced in March that it has stopped this practice, and will instead begin issuing “Administrator Interpretations.” Rather than responding to specific questions raised by employers -- as it did in the old opinion letters -- the Department’s Administrator Interpretations will reportedly “set forth a general interpretation of the law and regulations, applicable across-the-board to all those affected by the provision in issue.” The Department’s intent is to provide advice useful to an entire industry or category of employees, instead of engaging in fact-specific analyses that may not be helpful to other employers with a slightly different set of facts.

So far the Wage and Hour Division has issued one Administrator Interpretation. In Administrator Interpretation 2010-1, issued March 24, 2010 (available here), Deputy Administrator Nancy J. Leppink wrote that employees who perform the typical job duties of mortgage loan officers generally do not meet the administrative exemption under Section 13(a)(1) of the Fair Labor Standards Act, and therefore must be paid overtime for hours worked over 40 in a week. A key factor in this analysis was the conclusion that the primary job duty of mortgage loan officers is sales. If this is the case, then officers are involved in the “production side” of a business rather than the “management” or “operations” side of a business, and therefore cannot meet the primary duties test of the administrative exemption (i.e., that the employee’s primary duties must be directly related to management or general business operations).

This marks a change in course on the topic for the Department of Labor, at least compared to prior Opinion Letters. In fact, the Administrative Interpretation explicitly withdraws Opinion Letters 2006-31 and 2001 WL 1558764, both of which had concluded the administrative exemption did apply to mortgage loan officers based on the specific facts presented.

Employers should take care to note the first and future Administrator Interpretations. Not only might these Interpretations withdraw prior Opinion Letters on which employers may be relying, but they might reach conclusions that have industry-wide implications.