Settlement Reached in Case Seeking Overtime Wages for Loan Officers
As have numerous other financial institutions over the past several years, RBS has agreed to resolve a pending unpaid overtime class action lawsuit brought on behalf of its Mortgage Loan Officers who claimed they had been misclassified as exempt employees. The settlement provides $3 million in back wages, attorneys’ fees and costs and is pending court approval. Settlements in wage and hour cases require the review and approval by the judge handling the case.
The loan officers had been paid on a commission basis, with no overtime pay, for years, although they were switched to being paid hourly plus overtime after the case was filed. The case alleged that they should have been classified as non-exempt employees (meaning entitled to receive overtime pay) all along and sought to recover the unpaid back overtime pay for the statutory time period preceding this change in pay structure.
In addition to claims under the federal Fair Labor Standards Act (FLSA), the case also asserted state labor law claims on behalf of the class of loan officers who worked in New York, New Jersey, Massachusetts, Rhode Island, Ohio, Illinois, and New Hampshire. These states have labor laws on overtime wages that provide additional protections and remedies, beyond those provided under federal law, and allow such claims to be brought as a class action instead of a collective action.
While RBS denied the allegations and asserted that it had properly classified its loan officers as exempt employees pursuant to several exemptions, including the administrative exemption, the executive exemption, the professional exemption and the highly compensated exemption, all of these require that the employee be paid on a salary basis. Where employees are paid on a straight commission basis, with no guaranteed minimum weekly salary, this requirement is not satisfied.
Almost 600 RBS loan officers are covered by this settlement and, if approved, will receive individual payouts of back overtime calculated based on the number of weeks worked while classified as non-exempt.
This case was not the first and will certainly not be the last brought to recover unpaid overtime pay owed to loan officers and other financial services employees paid on a commission basis. If you have any doubts as to your entitlement to overtime, contact the overtime pay experts at The Lore Law Firm for a free and confidential review.
Call 1-866-559-0400, email firstname.lastname@example.org or submit your information using our convenient Case Evaluation form for a FREE and CONFIDENTIAL review of your circumstances, because time is money.