Lawyers Fighting Illegal Compensation Practices For Bank And Home Loan Employees
Loan officers, home mortgage consultants, external home loan consultants, account managers, account executives, retail mortgage account executives and bank officers holding similar job titles engaged in selling financial products in the lending industry are often subject to improper overtime and expense reimbursement practices and policies. At Cohelan Khoury & Singer, we understand the laws governing compensation in these industries and regularly help professionals fight for the money they are owed.
For example, loan officers paid strictly on a nonguaranteed commission basis and working predominantly at branches, call centers, home offices or on-site at construction developments are generally entitled to overtime pay. The amount owed is calculated by taking total commissions, dividing by the number of hours worked and multiplying half that amount by the number of overtime hours.
Example: Using 10 hours of overtime (50-hour week): 15 loans x $150 per loan = $2,250 / 50 hours = $40.00 / .5 = $20.00 per overtime hour x 10 hours = $200 owed to the employee.
Commission guarantees or draws that do not cover the minimum requirements of $455 per week qualify employees for overtime pay, and pay totaling less than $7.50 per hour in a given week qualifies employees for minimum wage payments.
Loan consultants who perform outside sales work are owed overtime if they spend less than 50% of their time engaged in actual outside sales and related activity. Under 29 CFR § 541.502, outside sales do not include sales made by mail, telephone or the Internet unless such contact is used merely as an adjunct to in-person sales visits with clients. Thus, any fixed site, whether home or office, used by a salesperson as a headquarters or for telephonic solicitation of sales is considered one of the employer’s places of business, even though the employer is not in any formal sense the owner or tenant of the property and does not constitute time engaged in outside sales. Sales that originate by telephone generally do not qualify as outside sales.
Should You Have Been Reimbursed For Work Expenses?
The nature of business in the lending industry is such that loan officers often incur expenses for automotive, cell phone and marketing costs in performing their job duties and securing loans for their employers. Yet, commissioned bank home loan sales employees and others in both retail and wholesale groups are often not permitted, as part of their compensation package, to submit expense reports, though they pay out hundreds of dollars per month in expenses generating business for the lender.
Generally, in California, employees must be reimbursed for all expenses incurred in connection with their work. This cannot be altered by contract; that is, the employer cannot require employees to agree to pay for expenses incurred in discharging job duties and cannot put a weekly or monthly cap or dollar limit on expenses and refuse to pay reasonable and necessary expenses above the limit. Employees are entitled to recover un-reimbursed expenses dating back up to four years, with interest.
Some examples of covered expenses include:
- Training costs
- Seminar costs
- Telephone charges
- Mailing costs
- Postage
- Subscriptions
- Office supplies
- Mileage
- Cell phone
- Advertising
- Business development
- Business lunches
- Office equipment
- Wages of the support staff
- Costs associated with transaction errors
- Costs to settle disputes with customers
In general, if you paid out of pocket, you should be reimbursed for any necessary business-related costs or expenses that resulted from your employment.
Seeking Restitution For Improper Deductions
Often, loan officers are illegally required to pay portions of their commissions to production assistants or associates. Employers may not deduct any sums from an employee’s wages to pay salaries, bonuses or wages of other employees. Also, companies are not permitted to make deductions from commissions or other wages to pay for uncollected third-party fees (appraisal fees, credit reports, etc.), transaction lock rate shortages or differentials, negative pricing exceptions or loan lock rate extension fees. Employees are entitled to recover improper deductions dating back up to four years, with interest.
Contact Us To Discuss Your Legal Options For Free
Cohelan Khoury & Singer offers free initial consultations to workers throughout California who believe they have an actionable employment-related dispute, including disputes related to compensation. To schedule yours, call our San Diego office at 888-652-2201 or submit an online contact form.