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ABA: The American Bankers Association
Compliance News

DOL Opens Door to Exempt Mortgage Loan Officers from Overtime Requirements

The Department of Labor on May 18 issued a final rule clarifying that employees in retail or service businesses who receive more than half of their compensation in commissions may be exempt from federal overtime pay requirements under Section 7(i) of the Fair Labor Standards Act. The rule opens the door for banks to treat commissioned mortgage loan officers as exempt employees, a result that ABA has sought.

The rule withdraws DOL’s list of businesses, such as banks, that are specifically excluded from the Section 7(i) exemption. Instead, a business’ employees may be eligible for the exemption if they work in a “retail or service establishment.” In a 2019 letter, ABA had urged DOL to conclude that MLOs are exempt employees.

For more information, contact ABA’s Jonathan Thessin.