Mortgage Industry Fallout Leads to FLSA Violations
As most of us are painfully aware, the mortgage industry is facing a restructuring period in light of previous sub-prime lending practices. The lending business as a whole is tightening lending standards and cutting costs. It is common knowledge that the mortgage industry’s crisis is directly affecting the housing and consumer loan markets.
Less common is the knowledge that the mortgage industry fallout is affecting how and if workers in the industry are being paid. Some employers are cutting corners by not paying mortgage brokers, lenders, loan officers, and staff what they are entitled to, either under law or under contract.
In some cases, brokers have not been paid in months – or longer. While it may be disheartening to be in this position, the law does afford you protection even if you are normally paid by commissions.
The Fair Labor Standards Act, a federal law, regulates the minimum wages that employees are entitled to. Generally, non-exempt employees are entitled to receive the federal minimum wage, even if they are ordinarily salaried or work on a commission, as many in the loan industry do.
The FLSA also lays out certain minimums when it comes to pay for over-time. Non-exempt employees are entitled to time and a half (1.5) of thier normal pay rate for hours worked over 40.
An exempt employee is one that falls into one of the FLSA’s exempt categories and allows the employer to avoid the minimum standards set by the FLSA. Because employers often incorrectly label employees as exempt, it is important to have an attorney review with you your employment conditions. Job labels are not determinative. Nor is classification as an independent contractor.
Remedies under the FLSA are substantial. The FLSA grants back pay (the amount that you are owed under the law), liquidated damages equal to your back pay, and attorney’s fees.
In addition, Ohio law provides for even more generous remedies (not to mention Ohio’s minimum wage is higher than the federal minimum wage). Ohio provides for back pay, liquidated damages equal to two times your back pay, and attorney’s fees.
It is important to note that you are protected by law from being retaliated against for asserting your rights under either law.
Determining whether you have a case under either the FLSA or the Ohio version (the Minimum Fair Wage Standards Act) is best done by a trained lawyer, but some basic indicators include:
1. Have you been paid at least the Federal minimum wage each week that you worked?
2. Have you been paid at least time and a half for overtime worked? Overtime is anything over 40 hours per week.
If the answer to either question is no, then you may have a case under either federal or Ohio law. This can be true even if you are salaried, work on commission, or are labeled an “independent contractor.”
Links of Interest
U.S. Department of Labor's FLSA information pageFLSA Regulations
Ohio's Minimum Fair Wage Standard's Act
Ohio Constitution (see Article II, Section 34(a) for information on Ohio's minimum wage)
If you feel you have not been paid for all of the hours you worked, please call my office at (614) 939-9022 for a free consultation.