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Administrative exemption controversy

What is an administrative exemption and why is it such a big deal for mortgage industry employees? The Fair Labor Standards Act (FLSA) already has criteria for administrative employees, but the interpretation of these criteria has proven to spark some disagreement and controversy.

Some Circuit Courts in the United States have ruled that mortgage company employees such as loan officers, processors and underwriters are exempt, and others have ruled that they are non-exempt. Recently, the Supreme Court refused to make a definitive ruling on exempt status, leaving inconsistency in its wake.

Why Non-Exempt?

The designation of non-exempt could gain you the compensation that you rightfully deserve. When your job definition is non-exempt, you are required by law to receive overtime for the extra hours you put in. Without the exempt status, you only get paid your salary, no matter how long you work.

FLSA Requirements

Here are the requirements that the FLSA stipulates for exempt administrative employees:

• The main duties of the job must be office work that relates to management of the business or general business operations

• The weekly salary must be at least 455 dollars

• The main part of the employee’s job must incorporate independent judgment with significant matters to the company

Administrative Exemption Opinions

Of course, it is to the employer’s advantage to define employees as exempt and not pay them overtime, but is that fair? Because opinions are so divided in the courts and at companies across the country, it can be to your advantage to pursue legal consultation regarding your case.

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