Mortgage Daily Logo
mortgage news from industry experts

Broker Baffled Over Overtime Lawsuit

Broker Baffled Over Overtime LawsuitDepartment of Labor sues Jericho Mortgage

February 28, 2006

By LISA D. BURDEN
Washington, D.C., correspondent for MortgageDaily.com

The Department of Labor has filed a lawsuit against two Ohio-based mortgage companies which it claims failed to pay their sales agents more than $220,000 in back wages. But the companies’ owner has vowed to fight the action, claiming that his employees were properly paid on a commission basis.The filing in Ohio federal court followed an investigation by the department into Double Eagle Financial Corp. and Platinum Brokerage Ltd., which both do business in the Columbus area as Jericho Mortgage.

The government said that from May 2003 the companies failed to pay the minimum wage rate, failed to pay overtime compensation for hours worked in excess of 40 a week and failed to maintain accurate records of the hours worked for 54 employees who worked as loan officers or sales managers. They were all paid on a commission basis and received no pay during periods when no loans were closed.

The agency is attempting to recover between $45 to $17,000 per employee.

Rodney K. Cotner, the companies’ owner, said he is unfairly being singled out as his pay practices for loan officers mirror what others in the other industry are doing. He pointed out that he worked as a loan officer several years ago before putting together his own business and that he was paid on a commission-only basis. Cotner also said that some of the employees named in the lawsuit worked for him less than 40 hours a week and made more than $150,000 a year. “It’s not like these people got abused and used,” he said.

Department of Labor spokesman Brad Mitchell said that it’s a large case because of the amount of money involved.

The Fair Labor Standards Act requires employers to pay employees the federal minimum wage for all hours worked and time and one-half the regular rate of pay for hours worked over 40 in a week unless the employee is exempt from overtime pay. Employers must also keep accurate time and payroll records.

Mitchell said the government finds out about alleged violations in one of three ways: a business competitor complains, a complaint is made by a worker or former worker or alleged violations are discovered during a routine scheduled investigation. In keeping with the department’s policy of protecting the privacy of the complaint, he declined to specify how the federal agency found out about the alleged violations involving Jericho.


Lisa D. Burden is a legal analyst for MortgageDaily.com and holds a law degree from the University of Maryland. She is currently a freelance journalist who previously wrote for Institutional Investor publications and the Baltimore Daily Record.

e-mail Lisa at: burdenlisa@yahoo.com

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts

THE TRUSTED PROVIDER OF ACCURATE RATES AND FINANCIAL INFORMATION