Most employees agree to work overtime because they know they’ll be paid the premium overtime rate of one and one-half times their normal hourly rate for all the overtime they work. Sometimes they work extra hours because they believe they have no choice. Not all workers are eligible for the premium overtime rate, regardless of how many hours they work, but the federal Fair Labor Standards Act (FLSA) is very specific about the types of employees that can qualify as exempt.
For many years, appraisers and mortgage underwriters have been treated as nonexempt employees or independent contractors (which are also exempt from overtime rules). This changed for a lot of people in 2009 when a New York court ruled that JP Morgan Chase’s mortgage underwriters did not qualify for the overtime exemption. This ruling prompted many banks throughout the country to change the classification of their mortgage-industry employees to nonexempt.
Bank of America was not one of the companies that made this change and its appraisers responded by filing a wage and hour class action lawsuit alleging the bank had misclassified them as exempt from overtime compensation.
Under the FLSA, employees can only be legally denied overtime compensation if they fit into one of three categories: administrative, executive, or professional. The FLSA has certain requirements employees must fulfill in order to fit into one of these categories. For example, in order to qualify under the administrative category, an employee must perform primarily office work and provide administrative assistance directly to an executive. For the executive category, an employee must spend the majority of her time managing other employees, be able to discipline those employees, and have significant say in the hiring and firing of her employees. A professional employee is defined as a worker whose job requires a particular set of skills or level of education to perform.
Bank of America allegedly classified its appraisers as exempt under a combination of the administrative and professional categories, but the plaintiffs allege the bank did so illegally. According to the wage and hour lawsuit, the appraisers allegedly did not need any special academic degree to perform their job. Instead they only needed a state license. Despite this fact, Bank of America allegedly required them to work 16-hour days, often without a lunch break, without the proper overtime compensation.
Rather than let the dispute go to trial, Bank of America has agreed to settle the lawsuit for $36 million. The settlement will cover 365 current and former appraisers who worked for Landsafe Appraisal Services, which is a subsidiary of Bank of America. Part of the settlement will go to pay for the attorneys’ fees and legal costs associated with filing the lawsuit and negotiating the settlement. That will leave approximately $60,000 to $65,000 for each plaintiff, making it one of the largest wage and hour settlements on a per class member basis.
Bank of America has also agreed to reclassify its in-house appraisers as nonexempt employees, provided the planned sale of Landsafe to CoreLogic does not go through. If CoreLogic succeeds in buying Landsafe, it will then be responsible for properly classifying and paying all of Landsafe’s employees.The attorneys at Chicago Overtime Law Center have decades of experience litigating wage and hour cases, including overtime, vacation pay, meal breaks, and tips against Banks, Mortgage Brokerage, Real-Estate Brokerages, financial services companies and private security firms. We have offices conveniently located in Oak Brook and Chicago, Illinois. Contact the Berwyn and Oak Park overtime lawyers and attorneys at the Chicago Overtime Law Center today at 312-869-4095. We are looking to represent financial advisor associates, appraisers, loan and mortgage brokers who have not been paid overtime and have been mis-classified as managers.