Compensation

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A federal court in Texas put a hold on the implementation of the U.S. Department of Labor’s overtime rule.  That rule, which was scheduled to take effect on December 1, 2016, was intended to expand significantly the number of employees entitled to overtime pay under the federal Fair Labor Standards Act.  However, the court postponed that effective date until it can fully consider whether the Department is authorized to promulgate the rule’s increases in the salary-based exemptions. Continue Reading Court Blocks Expansion of Federal Overtime Requirements, at Least Temporarily

Kris Kully, of Mayer Brown’s Financial Services and Regulatory Enforcement group, will speak to credit union mortgage lenders at the 20th Annual Conference of the American Credit Union Mortgage Association in Washington, DC.

On September 19th, she will discuss the next wave of compliance regulations and enforcement priorities.  On September 20th, she will participate in a panel discussion of compliance matters ranging from the Department of Labor’s treatment of mortgage loan originators under the Fair Labor Standards Act, the Consumer Financial Protection Bureau’s regulation of originator compensation, and any other issues the audience requests!

The U.S. Department of Labor (“DOL”) has released its final rule addressing which employees are eligible for overtime pay under the federal Fair Labor Standards Act (“FLSA”).  The FLSA, among other requirements, mandates “time-and-a-half” for employees who work more than 40 hours in a week, unless an exemption applies.  The DOL’s final rule updates the criteria for the exemptions for “white collar” employees, raising the salary levels at which those employees have a right to such overtime pay.  The Obama Administration estimates that 4.2 million additional employees will be eligible for overtime pay, including those who make up to $913 per week ($47,476 per year).

In March 2014, the White House directed the DOL to modernize and simplify the “white collar” exemptions from FLSA’s overtime and minimum wage requirements.  Those white collar exemptions apply to employees who meet the established criteria for executive, administrative, professional, or outside sales employees, among other types of duties.  Generally, the criteria for those exemptions include a duties test (i.e., what do the employees actually do?) and a salary test (i.e., do they earn a salary that is high enough that they arguably do not need FLSA protection?).  The DOL had not updated the duties or salary tests for many of those exemptions in decades.

The “administrative” exemption recently sparked panic in the mortgage lending industry, since the DOL changed its stance and declared that the typical duties of a mortgage loan originator do not qualify those individuals for that exemption.  Although that interpretation was challenged, the Supreme Court decided that the DOL properly issued the interpretation, causing many mortgage lenders to re-examine the duties of their employees to ensure that they meet the criteria for an exemption.  Alternatively, the lender must track the hours worked by those loan originators, determine their “regular rate of pay,” and ensure that those individuals’ salaries and/or commissions result in the receipt of minimum wage, plus time-and-a-half for overtime. Continue Reading DOL Sets Salary Levels for Overtime Requirements