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November 5, 2008 DOL Home > ESA > WHD > News Releases > Chicago > 06-605-CHI |
Wage and Hour Division (WHD) Press Releases
U.S. Labor Department Recovers More Than $186,000 in Back Wages and Damages for 70 Employees of Middleburg Heights, Ohio, Mortgage FirmCLEVELAND -- Federal District Court Judge Donald C. Nugent ordered payment of the back wages to resolve a complaint filed by the U.S. Department of Labor’s Wage and Hour Division. “The Labor Department is committed to vigorously enforcing the law and ensuring that workers receive all of the wages they are owed,” said George Victory, district director of the department’s Wage and Hour Division in Columbus. The Wage and Hour Division investigated First National Lending Corp. under the Fair Labor Standards Act (FLSA), the federal law that establishes minimum wage and overtime standards. Loan officers were paid solely on commissions, and in some weeks, failed to earn the minimum wage for the hours they worked. Some loan officers received no pay during the entire period of their employment with First National Lending. The violations occurred from December 2001 through December 2004. At issue in the case was whether loan officers are exempt from minimum wage and overtime as “outside salespersons” under the FLSA. After hearing testimony from loan officers who worked for the firm, as well as the company president Lisa Scherzer, Judge Nugent rejected First National’s contention that loan officers who originated customer loans were engaged in “outside sales” and therefore exempt under the FLSA. The regulations that provide for the “outside sales” exemption were updated in August 2004. The court found that the loan officers did not qualify for exemption under either the old or new regulations because evidence in the case indicated they were not customarily and regularly performing sales away from their office. The FLSA requires covered employees to be paid the minimum wage for all hours worked and time and one-half the regular rate of pay for hours worked over 40 in a week. Employees who are paid commissions, just as those paid by the piece, are protected by the FLSA minimum wage and overtime provisions unless they qualify for an exemption. Employers must also maintain accurate time and payroll records. For more information about the FLSA, call the Department of Labor’s toll-free help line at 1-866-4USWAGE (1-866-487-9243). Information is also available on the Internet at www.wagehour.dol.gov. Information on the regulations governing exemptions – including an on-line tool for determining overtime eligibility – is available at www.dol.gov/fairpay. ### U.S. Department of Labor releases are accessible on the Internet at www.dol.gov. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at (202) 693-7828 or TTY (202) 693-7755. The Labor Department is committed to providing America’s employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit www.dol.gov/compliance.
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