Federal and state overtime laws exempt certain employees from overtime wage pay based primarily on their job duties. Oftentimes, employees assume that all highly compensated employees are exempt from overtime wage pay; however, that is not the case. A primary example of this is the overtime wage pay misclassification that occurs in the financial services industry.
The financial services industry has created a myriad of job titles for employees who perform a variety of duties, for example stock broker, mortgage loan officer, mortgage loan representative, loan processor, financial services consultant, and other, similar titles that imply an administrative function. Employers often misclassify these employees as exempt from the requirements and protections of the wage and hour laws based on a misunderstanding of the “administrative” exemption from overtime wages.
Under the administrative exemption, an exempt employee’s primary job 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.” To be directly related to the management or general business operations of the employer, the work must be “directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment.” The administrative exemption is limited to employees whose work is in serving the business itself (e.g. in accounting, quality control, human resources).
In the financial services industry, job titles often imply an administrative function when, in fact, the primary job duty is production (selling) for the business, not administering the business. For example, a mortgage loan officer’s job duties can include contacting potential customers or receiving contacts from potential customers. They collect required information from customers, run credit reports, and identify and assess loan products based on that information. They meet with potential customer and compile loan documents. These activities are not performed in the administration of the business itself, but rather are the business of the employer. These duties are in production of business, not administration.
Similarly, stockbrokers buy and sell orders of shares and securities, keep abreast of the market, give advice to their customers about financial opportunities, and manage customers’ portfolios. Their job duties are not in administering the business of their employer, but are in the production of the business of the employer. Stockbrokers, financial services advisors, and the like are not exempt employees if their primary duties are related to conducting the business of and producing income for the employer.
Thus, many financial services industry employees are entitled to overtime pay at 1.5 times their regular hourly pay for all hours worked in excess of 40 per week. Based upon an analysis of their job duties, they may not be exempt from the wage and hour requirements of the law, and may be misclassified. If you work in the financial services industry and believe that your position has been misclassified as exempt, contact an experienced attorney for a free consultation.
MANY EMPLOYEES IN THE FINANCIAL SERVICES INDUSTRY ARE ENTITLED TO OVERTIME WAGE PAY