|Two mortgage giants face lawsuits alleging the companies violated federal law by refusing to pay overtime.
Derrick Perry, a former Wells Fargo Home Mortgage employee who is now with National City Mortgage, filed lawsuits last month against Wells and National City claiming that he and other loan originators routinely worked more than 40 hours a week including regularly scheduled time on weekends but were only paid by commission in violation of the Fair Labor Standards Act.
Perry alleged in court documents that he and other loan originators are "victims of a uniform and companywide compensation policy ... in violation of the FLSA" that has been applied to all loan originators.
Perry said that he and the other loan officers are entitled to overtime going back as far as three years.
Wells has filed an answer in court explaining that its loan originators are not due overtime pay because they are exempt from the FLSA's overtime requirements. The FLSA regulates, among other things, overtime pay if none of several exemptions apply. However, the federal law provides that overtime does not have to be paid to employees who are properly classified under one of several allowed exemptions.
Wells has claimed in court documents that it does not have to pay loan originators overtime because several exemptions -- commissioned salesman, outside sales and highly-paid executives -- apply. Wells also said that many of the loan originators "misperformed their respective duties and/or failed to perform the duties which [Wells] realistically expected them to perform."
It's an area that has received a lot of attention in recent months. George Hanson, one of Perry's attorneys, said the Department of Labor has declared that loan officers are nonexempt under federal law and, thus, are entitled to overtime pay. He said that many of the nation's largest lenders including Countrywide, Ameriquest and Bank of America have settled such allegations.
Hanson disputed Wells' assertion that employees who are paid commission are not entitled to overtime. "That's just not the case," he said.
Perry is seeking, among other things, compensatory damages, attorneys' fees and costs and pre-judgment and post-judgment interest.
National City had not yet filed an answer as of publication.