Hoosier Banker 37 the commission earned or presumed earned each workweek). Therefore a reasonable and equitable method must be used. For example (if appropriate under your incentive plan and assuming the MLO’s hours do not fluctuate greatly from week to week), you could assume that the MLO earned an equal amount of commission in each workweek of the computation period. The commission is multiplied by 12 (months in a year), and then divided by 52 (weeks in a year) to get the workweek equivalent of the commission. This number is then divided by the total hours worked in that workweek to get the increase in the hourly rate. The additional overtime payment is then computed by multiplying half of this figure by the number of overtime hours in the workweek.3 Managing Overtime All hours worked are included in the overtime calculation. This includes time spent working “off the clock,” such as responding to phone calls and emails. Consequently it is important that you have an overtime policy – most employers mandate that an employee may not work any overtime without prior approval of a supervisor and are subject to disciplinary action for any violations – and procedures for reporting all time worked. Like other nonexempt employees, MLOs must be responsible for accurately recording their total hours worked each week. Failure to pay MLOs for overtime has resulted in lawsuits. In one case, the MLOs alleged that they were working more than 40 hours a week, because they were required to receive and answer phone calls, emails and text messages from managers, customers and Realtors at night and on the weekends. The employer did not require the MLOs to clock in and out and keep accurate time records, like other nonexempt employees. Compliance With Regulations To ensure compliance with the loan originator compensation requirements under the Truth in Lending Act (Reg Z), financial institutions should set out their incentive plan for chicago indianapolis st. louis milwaukee A full service business law firm with a simple promise -- put you first 201 North Illinois Street, Suite 1400 Capital Center, South Tower Indianapolis, Indiana 46204-4212 T: 317.464.4100 | F: 317.464.4101 | salawus.com Growing in Indiana to meet your company’s legal needs ANDREW PODGORNY | LARRY TOMLIN | STEPHEN STITLE | MARK WENZEL | BRANDT HARDY | PHIL FOWLER ELIZABETH TRAYLOR | MARTHA LEHMAN | DEBRA MASTRIAN | JOHN TANSELLE MLOs clearly in writing – whether pursuant to a plan or agreement – and properly structure the plan so that it falls within one of the safe harbors (such as dollar amount of the loan, total number of loans originated, or fixed amount for each loan). Reg Z prohibits an MLO from being paid compensation based on loan terms or conditions, or if the MLO has received compensation from a borrower or another person, such as a creditor. Having a clear compensation plan, including describing overtime and requiring employees to record and report all hours worked, will help ensure that MLO compensation is properly paid under both the FLSA and TILA. HB The information in this article is provided for general information purposes only and does not constitute legal advice or an opinion of any kind. You should consult with legal counsel for advice on your institution’s specific legal issues. 1 29 C.F.R. §778.200 2 29 C.F.R. §778.119 3 29 C.F.R. §§ 778.119, 778.120
RkJQdWJsaXNoZXIy MTg3NDExNQ==