Loan Officers / Loan Originators
If you work as a loan officer (a/k/a loan originator, mortgage loan officer, etc.) for a bank or mortgage company, you may be entitled to overtime pay for hours worked over forty per workweek. It has been generally accepted by the courts that persons working in these positions should be getting overtime pay. If you are being paid pure commission, a set salary + commission, or an hourly draw + commission, you are most likely not being paid overtime as required under the law. This could be thousands of dollars of unpaid overtime throughout your employment. Donelon, P.C. has litigated and settled numerous overtime claims on behalf of loan officers.
Don’t be tricked by several tactics employers use to avoid proper payment of overtime. The following are some common illegal schemes employers use to avoid paying overtime to loan officers:
- The hourly draw to be offset against future commissions. Here, the employer will pay the loan officer a low hourly rate of pay. They will pay the loan officer time and one-half of this low hourly rate for hours worked over 40 per workweek. However, the employer will later deduct all of these hourly payments from future commission income. This violates the overtime laws. First, what overtime is paid is later deducted, so no overtime is effectively paid this employee. Second, when calculating the overtime rate of pay that should have been paid to the employee, the employer failed to include all the commission income earned. Under the law, commission income must be included in calculating the overtime rate of pay.
- Employer pays on a pure commission basis. This method does not include any overtime pay premium and is usually illegal. The only defense is for an employer to claim that the loan officer is an “outside sales person.” Under the law, such outside sales people are not entitled to overtime pay. However, an outside sales persons must actually be working outside a company or home office making sales or conducting marketing activity. This is typically not the case as most loan officers spend the vast majority of each day working on the phone/computer.
- Claiming that they pay overtime, but not allowing the loan officer to report more than forty hours. Several employers claim that they follow the law, but simply do not allow any loan officers to report more than 40 hours per week. However, the employer knows full well they are working well over 40 hours. So long as an employer has direct or indirect knowledge that its employees are working overtime hours, it is responsible for paying overtime.
For more information: contact us.