5
sales, the work performed incidental to sales should be also be considered sales work. See Pontius v.
Delta Financial Corp., 2007 WL 1496692, at *9 and n.20 (loan officers compile and analyze potential
customers’ financial data because “doing so is necessary to evaluate the customers’ qualifications for a
loan, i.e., to make a sale.” They are not analyzing the information to provide advice to the customer,
which the customer could take and use elsewhere. Rather, the loan officers are performing “screening
for the benefit of the employer, rather than servicing for the benefit of the customer.”) (emphasis in
original); see also 29 C.F.R. § 541.500(b) (“work performed incidental to and in conjunction with the
employee’s own outside sales or solicitations, including incidental deliveries and collections, shall be
regarded as exempt outside sales work. Other work that furthers the employee’s sales efforts also shall
be regarded as exempt work including, for example, writing sales reports, updating or revising the
employee’s sales or display catalogue, planning itineraries and attending sales conferences”).
3
Applying
these factors to the job duties mortgage loan officers typically perform leads to the conclusion that they
have a primary duty of making sales.
Further, in addition to the job duties described above, the facts set out in the case law demonstrate that
historically mortgage loan officers were often compensated entirely by commissions, and that today
many mortgage loan officers continue to be paid primarily by commissions, sometimes with a base
wage, salary, or draw against the commissions. The commissions are based upon sales that are
completed (i.e., loans that actually close), with the commission amount typically based upon the value of
the loan. See, e.g., Underwood v. NMC Mortgage Corp., 2009 WL 1269465, at *1 (D. Kan. 2009)
(repayable draw against commissions of $1,400 per month until early 2005; afterwards a minimum
salary of $1,000 per month plus commissions); Henry v. Quicken Loans Inc., 2009 WL 596180, at *10
(E.D. Mich. 2009) (minimum base salary plus commissions); McCaffrey v. Mortgage Sources Corp.,
2009 WL 2778085, at **2-3 (D. Kan. 2009) (commissions only); Yanni v. Red Brick Mortgage, 2008
WL 4619772, at **1-3 (commissions only, based on loans that closed); Pontius v. Delta Financial
Corp., 2007 WL 1496692, at *2 (base salary plus commissions, with commissions earned subject to off-
set for failure to meet a minimum sales goal in a prior pay period); Saunders v. Ace Mortgage Funding,
Inc., 2007 WL 1190985, at **2-3 (D. Minn. 2007) (commissions only until June 2005, with a minimum
guarantee treated as a draw against future commissions after that); Chao v. First National Lending
Corp., 516 F. Supp. 2d 895, 904-05 (commissions only, based on loans that closed). Such payment
methods support the conclusion that a mortgage loan officer’s primary duty is sales.
In addition, employers often train their mortgage loan officers in sales techniques and evaluate their
performance on the basis of their sales volume, factors that also are relevant to the analysis of mortgage
loan officers’ primary duty. For example, in Epps v. Oak Street Mortgage LLC, 2006 WL 1460273, at
*5, loan officers were required to meet a production goal of closing three loans per month, and were
evaluated using a form that focused in part on whether they met their sales requirements. They were
required to work on Saturday if they did not meet their sales requirements, and numerous loan officers
were disciplined or terminated for failing to meet their sales requirements, as were their managers. See
Pontius v. Delta Financial Corp., 2007 WL 1496692, at *2 (such employees “are hired, trained, earn
commissions, and are otherwise successful in their positions, on the basis of their sales performance”);
Belton v. Premium Mortgage, Inc., 2006 WL 561489, at *1 (employees “were trained as salespeople in
order to learn the mortgage business and to increase their individual sales efforts”); Casas v. Conseco
Finance Corp., 2002 WL 507059, at *9 (numerous separation notices showed that their “performance
3
Because work performed incidental to and in conjunction with the employee’s own sales or
solicitations is considered exempt sales work, the Administrator rejects the September 8, 2006 Wage and
Hour Opinion Letter FLSA2006-31’s inappropriately narrow definition of sales as including only
“customer-specific persuasive sales activity,” which is the time that a loan officer spends directly
engaged in selling mortgage loan products to customers.