The DOL notes:

The financial services industry assigns a variety of job titles to employees who perform the typical job duties of a mortgage loan officer. Those job titles include mortgage loan representative, mortgage loan consultant, and mortgage loan originator.

The interpretation letter found that the typical mortgage loan officer’s duties begin with obtaining clients, collecting information about the clients (such as income, employment history, investments, and so forth), and then inputting this information into a computer program. The program sets forth appropriate loan products for the clients. The officer would then discuss the different pros and cons for each product with the client in order to match the client’s needs with one of the offered products.

The DOL noted that for the loan officer to qualify as exempt, their primary duty must be “the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers.” Work directly related to management or general business operations consists of work in areas such as accounting, budgeting, quality control, and human resources – not actually producing the product sold by the company or selling the product made by the company.

The DOL interpretation concluded:

Thus, a careful examination of the law as applied to the mortgage loan officers' duties demonstrates that their primary duty is making sales and, therefore, mortgage loan officers perform the production work of their employers. Work such as collecting financial information from customers, entering it into the computer program to determine what particular loan products might be available to that customer, and explaining the terms of the available options and the pros and cons of each option, so that a sale can be made, constitutes the production work of an employer engaged in selling or brokering mortgage loan products.

This new guidance from the DOL establishes that employers in the financial industry with employees – in particular loan officers – must review this new interpretation and evaluate whether certain employees can simply be paid a salary, or if the employees must be reclassified as non-exempt and receive overtime. The DOL letter can be read here (PDF).

As the Ohio’s Employer’s Blog points out, a DOL audit can feel like an unpleasant medical exam and employers need to be proactive about compliance. Except, I must add, one difference between the medical exam and DOL audit is that you can buy insurance to cover the costs of the medical exam.

In California, employers should review their pay practices, including that employees are paid on time and receive at least the minimum wage for California. For example, employers should insure they are complying with meal and rest break requirements, properly recording meal breaks and the employees’ time worked, properly paying overtime, and reimbursing employees for all business related expenses. Employers employing minors should also carefully examine the child-labor laws applicable to their business, as these requirements are extremely detailed and many well-intentioned employers may still be in violation.

Businesses should also audit whether they have properly classified their exempt employees and independent contractors. A misclassified employee can create a huge amount of liability for a business, as the misclassified employee is entitled to damages for overtime pay, penalties, interest, and their attorney’s fees.

Employers need to be proactive about complying with these complex wage and hour laws. If cost is a concern, complete an in-house audit and then have an attorney double check the policies and practices. It will cost a lot more to contact an attorney after the DOL is in your workplace or the lawsuit has already been filed.