Ninth Circuit Holds Mortgage Underwriters Are Entitled To Overtime Compensation Under Federal Labor Standards Act
The Federal Court of Appeals for the Ninth Circuit issued a published decision on July 5, 2017, stating that mortgage underwriters at Provident Savings Bank don’t qualify for overtime administrative employee exemptions under the Fair Labor Standards Act (FLSA), and are thus entitled to receive overtime pay.
The case is McKeen-Chaplin v. Provident Savings Bank, 2017 S.O.S. 15-16758, D.C. No. 2:12-cv-03035-GEB-AC.
The Court reasoned that since the underwriters’ job duties, such as reviewing loan applications using guidelines established by the bank/investors — don’t relate to the bank’s management or general business operations, they don’t meet the administrative employee overtime pay exemption under the FLSA. The Court reasoned that the underwriters’ duties go to the heart of Provident’s marketplace offerings, not to the internal administration of Provident’s business, the panel said.
“Thus, we conclude that where a bank sells mortgage loans and resells the funded loans on the secondary market as a primary font of business, mortgage underwriters who implement guidelines designed by corporate management, and who must ask permission when deviating from protocol, are most accurately considered employees responsible for production, not administrators who manage, guide, and administer the business,” the panel said.
The decision reversed the district court’s grant of summary judgment and remanded the case with instruction to find in favor of the mortgage underwriters.
If you or someone you know is a mortgage underwriter that is regularly required to work more than 8 hours per day or 40 hours per week without getting paid the overtime rate, or required to work without receiving uninterrupted thirty-minute meal breaks or ten-minute rest breaks, contact Srourian Law Firm for a free consultation to discuss claims you may have.