Wednesday, March 11, 2015

Supreme Court Upholds Rule Requiring Overtime for Loan Officers

The Supreme Court upheld a Department of Labor rule that required lenders to pay mortgage loan officers overtime, finding in a unanimous decision that the Administrative Procedures Act (APA) does not require federal agencies to employ notice-and-comment rulemaking when it issues a rule interpreting an existing regulation.

In the case of Perez v. Mortgage Bankers Association, the court overturned a lower court ruling that the department could not change its determination of exemption under the Fair Labor Standards Act without going through a formal rulemaking process. The Supreme Court rejected the precedent relied on by the lower court, arguing that it would impose obligations on federal agencies not envisioned by the text of the APA.

The Labor Department had ruled in 2006 that mortgage loan officers were exempt employees under the FLSA, but it reversed itself in 2010. The Mortgage Bankers Association sued DOL, arguing that the government could not “significantly revise” its “definitive interpretation” without conducting an official rulemaking with notice and comment.

Read the decision.

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