Wage and Hour Division (WHD)

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CLEVELAND, OH --

The U.S. Department of Labor announced today the filing of a lawsuit in federal district court against Mortgage Edge Inc., Middleburg Heights, Ohio, for alleged minimum wage and overtime violations of the Fair Labor Standards Act (FLSA).

The complaint, filed in Federal District Court, Cleveland, alleges that the commercial mortgage business failed to pay minimum wage and overtime compensation to workers who were seeking new customers through direct phone solicitation. The complaint also alleges that the employer failed to keep adequate records of employees’ hours worked.

The department also alleges that the company paid telemarketers and loan officers on a strictly commission basis and failed to pay the loan officers any amount if the loan they were marketing did not close during a pay period. The department contends that the workers are not exempt from the overtime pay and minimum wage provisions and should have received at least the federal minimum wage and time and one-half overtime pay for hours over 40 in a single workweek. The alleged violations cover a period from February 2002 through mid-February 2004. Amounts to be paid to workers at the company will be determined by the court.

Enforced by the Labor Department's Wage and Hour Division of the Employment Standards Administration, the FLSA requires that covered employees be paid the minimum wage for all hours worked and time and one-half their regular rate of pay for hours worked in excess of 40 in a week. The FLSA also requires employers to maintain accurate time and payroll records.

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