Determining whether a worker is exempt v. non-exempt is one of the more
crucial decisions employers can make. If a worker is categorized as “non-exempt”
the Fair Labor Standards Act (FLSA) provides that that employee must be
paid overtime for all hours workers in excess of 40 hours in any workweek.
Overtime pay is typically calculated at one and one-half times a worker’s
standard rate of pay. On the other hand, if you are considered to be an
“exempt” employee, then you will not be entitled to overtime
pay regardless of the number of hours you work. Generally, employees are
considered exempt if they perform certain types of “white collar”
work and make more than a certain amount of money each week.
Misclassifying workers as “exempt v. non-exempt” is a fairly
common – and potentially costly – error employers make. Labeling
a worker as exempt may deny a worker a substantial amount of take home
pay in the form of overtime compensation. If you believe that your employer
may have misclassified you it’s a good idea to consult with an experienced
Atlanta overtime pay attorney right away.
Recently, an overtime pay case highlighted the confusion that can occur
in determining whether an employee should be paid overtime.
The controversy began in 2006 when mortgage brokers were considered “exempt”
employees and the FLSA did not require employers to give them overtime
pay. However, in 2010 the Department of Labor determined that this analysis
was wrong and that loan officers should not be considered exempt. Instead,
their classification should be changed to “non-exempt” and
the workers would be entitled to overtime pay.
Based on this ruling the Mortgage Bankers Association filed a lawsuit,
MBA v. Harris, claiming that the Department of Labor failed to follow the proper procedure
for changing such a major rule. Recently, the U.S. Court of Appeals for
the District of Columbia agreed and vacated the DOL’s interpretation
(i.e. said that it no longer applies.)
However, this leaves an industry questioning what to do. Even though the
employers may think that it’s okay to classify mortgage brokers
as “exempt” and not pay them overtime, the reasoning behind
the Department of Labor’s initial interpretation from 2010 still
remains. That interpretation found that the mortgage brokers did not fall
within any of the exemptions because the primary activities they were
involved in – selling financial products – did not meet the
criteria for an exemption.
Here the interpretation was vacated for procedural errors, and not based
on the DOL’s reasoning. As a result, it’s not clear how courts
will interpret mortgage broker’s classification in the future.
This case shows some of the challenges employers and employees face in
trying to figure out the FLSA. If you have questions or believe that you
may not have been paid all the overtime compensation you may be entitled
to, please contact the top
Georgia wage and hour attorneys The Buckley Law Firm, LLC for an immediate consultation.