Pub. 4 2013 Issue 4

winter 2013 11 West Virginia Banker Should you require more information, please feel free to contact Jill E. Hall. Ms. Hall is a partner with Bowles Rice LLP. Ms. Hall focuses her practice on the areas of employment law and employee benefits, ERISA and ERISA litigation and she has significant experience in advising employers, insurers and third-party administrators on the requirements of the Affordable Care Act. Bowles Rice LLP is general counsel to the West Virginia Bankers Association. The authors present these materials with the understanding that the information provided is not legal advice. Due to the rapidly changing nature of the law, information contained in this publication may become outdated. Anyone using these materials should always research original sources of authority and update this information to ensure accuracy when dealing with a specific matter. No person should act or rely upon the information contained in this publication without seeking the advice of an attorney. Inc. , 698 F.3d 897 (6th Cir. 2012).  The court focused on the administrative exemption requirements and found that testimony at trial supported a jury’s verdict that the primary duties of the employees at issue included the activities listed in the financial services example found in the FLSA regulations (collecting and analyzing data and exercising independent judgment in advising regarding various products, etc.).  The court noted that the 2010 opinion letter was not controlling in every instance because, in each case, the law regarding the administrative exemption must be applied to the particular facts at issue. In July 2013, the United States Court of Appeals for the D.C. Circuit reversed a district court order that had dismissed the Mortgage Bankers Association’s challenge to the 2010 opinion letter.   Mortgage Bankers Association v. Harris , 720 F.3d 966 (D.C. Cir. 2013).  Essentially, the court held that the 2010 letter is invalid due to a lack of notice and rulemaking comments, but the court did not comment on the substance of the opinion letter and thus did not opine whether or not mortgage officers and lenders satisfy the administrative exemption.  Despite these wins for the banking industry, our own federal appeals court in the Fourth Circuit has not addressed the issue.  Absent controlling authority from our own circuit, banks should be wary of ignoring the Department of Labor’s opinion.  It is important to note that, even if the 2010 opinion is withdrawn, the example provided in the FLSA regulations specifically provides that employees whose primary job function is selling financial products will not satisfy the administrative exemption. In sum, banks should be analyzing whether the actual primary duties of their mortgage officers and lenders satisfy the FLSA’s administrative exemption test.  The title given to an employee is not determinative of whether the position is legally exempt.  If a position is heavily geared toward sales, it is less likely the posi- tion is properly exempt.  Given that the risks of misclassification can be significant, banks should consult with legal counsel to determine whether their mortgage officers and lenders are truly exempt employees. n Scott N. Drake, CPA Scot E. Orndorff, CPA Michael P. Manspeaker, CPA 717-263-3910 888-272-7351 www.sek.com sdrake@sek.com Camp Hill, PA Carlisle, PA Chambersburg, PA Hagerstown, MD Hanover, PA PROVIDING SERVICES TO COMMUNITY BANKS FOR OVER 50 YEARS INSIGHT. INTEGRITY. RESULTS. TM Smith Elliott Kearns & Company, LLC Certified Public Accountants & Consultants