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Wage and Hour
Division
United States
Department of Labor
Opinion Letter
Fair Labor Standards
Act (FLSA)
May 17, 1999
 This
is in response to
your letter
requesting an
opinion regarding
the exempt status of
loan officers
under section
13(a)(1) of the Fair
Labor Standards Act
(FLSA).
You
state that the
loan officers
are employed by your
client, a mortgage
brokerage company.
These loan
officers develop
new business for the
employer by
contacting
prospective
borrowers and
referral sources;
evaluate the
borrowers' financial
situation and
provide a
"prequalification
letter" that is used
by the borrower,
real estate agents,
and potential
sellers in
negotiating the
sale; consult with
borrowers to obtain
the best loan
package available
(e.g. best interest
rates, lowest points
and fees, maximum
affordable loan
amount); work with
approximately ten
different lenders in
selecting loan
programs for
borrowers; consult
with the borrowers
regarding the
desirability of
"locking- in" a
given interest rate;
assist the borrowers
in preparing a loan
application for a
selected loan
program; present and
obtain signature of
the borrower on
disclosures required
by federal and state
laws; submit loan
application to the
central office for
processing; and
consult with loan
processors or the
borrowers in
resolving problems
or in obtaining
additional
information
regarding the loan
package.
You
state that loan
officers report
to branch managers,
and are subject to
very little
supervision. The
branch managers do
not participate in
the selection of a
particular loan
program or review
the loan program
prepared for the
borrowers.
Section
13(a)(1) of the FLSA
provides a minimum
wage and overtime
pay exemption for
any employee
employed in a bona
fide executive,
administrative,
professional, or
outside sales
capacity, as those
terms are defined in
the enclosed
Regulations, 29 CFR
Part 541. An
employee may qualify
for exemption if all
the pertinent tests
relating to duties,
responsibilities and
salary, as discussed
in the appropriate
sections of the
regulations, are
met.
An
employee who is paid
on a salary or fee
basis of at least
$250 per week may
qualify for
exemption as a bona
fide administrative
employee if the
employee's primary
duty is office or
nonmanual work
directly related to
management policies
or general business
operations of
his/her employer or
his/her employer's
customers, and the
employee's work
requires the
exercise of
discretion and
independent
judgment.
Activities
contemplated by the
regulations as being
"directly related to
management policies
or general business
operations" of an
employer are those
related to the
administrative
operations of a
business, as
distinguished from
the basic tasks of
the employer's
business, that is,
the "production"
work of the
business. The
administrative
exemption is limited
to persons who
perform work of
substantial
importance to the
business of their
employer or the
employer's
customers, and
include "white
collar" employees
engaged in
"servicing" a
business. Examples
of such activity
include personnel
administration,
labor relations,
research, planning,
or assisting a
management official
to carry out the
executive or
administrative
functions of that
official. In general
"administrative
employee" means a
person who is
engaged in staff
functions as opposed
to the line
functions of an
employer.
From
the information
submitted, it
appears that the
loan officers
are engaged in
carrying out the
employer's
day-to-day
activities rather
than in determining
the overall course
and policies of the
business. These
activities also
appear to require
the use of skills
and experience in
applying techniques,
procedures, or
specific standards
rather than the
exercising of
discretion and
independent
judgment, within the
meaning of the
regulations. It is,
therefore, our
opinion that the
loan officers
would not qualify as
bona fide
administrative
employees within the
meaning of section
541.2 of the
regulations. Such
employees must be
paid in accordance
with the minimum
wage and overtime
provisions of the
FLSA.
This
opinion is based
exclusively on the
facts and
circumstances
described in your
request and is given
on the basis of your
representation,
explicit or implied,
that you have
provided a full and
fair description of
all the facts and
circumstances that
would be pertinent
to our consideration
of the question
presented. Existence
of any other factual
or historical
background not
contained in your
request might
require a different
conclusion than the
one expressed
therein.
We
trust the above
information is
responsive to your
inquiry.
Sincerely,
Daniel F. Sweeney
Office of
Enforcement Policy
Fair Labor Standards
Team
Enclosure
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