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Are Mortgage Loan Officers Entitled to Overtime Pay?

Legal Update, Mortgage & Lending Law, Real Estate Agent & Broker Representation, and Real Estate Law by Peter N. Brewer, Esq.

The answer is … maybe.  At one point the industry had some certainty on this issue when, in 2006, the Department of Labor (DOL) issued an opinion letter on September 8, of that year stating that loan officers qualify as exempt from overtime pay under the administrative exemption.  At that point the answer was clear to employers that loan officers were NOT entitled to overtime pay.

However, some years later, on March 24, 2010, the DOL issued an administrator’s interpretation withdrawing its 2006 opinion and instead opining that loan officers do NOT qualify for the administrative exemption and can be entitled to overtime pay.

This was such a critical issue for the industry that in 2011, the Mortgage Bankers Association (MBA) sued the DOL challenging the validity of the 2010 reversal. MBA prevailed and on July 2, 2013, the Washington DC Circuit Court of Appeals issued a decision in Mortgage Bankers Association v. Harris, invalidating the DOL’s 2010 interpretation.  However, the decision focused on a technicality of notice rather than the merits.  So the question still remained, was the 2006 opinion letter valid?

In June of 2014, the United States Supreme Court granted review so the briefs will be going forward in the next few months.  Until a decision from the Supreme Court, even the 2006 DOL opinion seems to be in limbo.

Generally California courts apply our own state law overtime exemption requirements as provided for in industry wage orders.  As with any type of compliance work, the safest course of action when trying to comply is to adhere to the most stringent or conservative  requirement, whether state or federal.  California’s wage laws are generally more strict than other jurisdictions. Regardless of how it turns out, it will continue to be a very fact-specific analysis, such as the independent contractor analysis.

If you or a friend is seeking real estate legal counsel regarding a California based property, don’t hesitate to contact our law firm at (650) 327-2900 x 10 or to learn more about our firm and read attorney bios, visit us on the web at

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