Wall Street Assembly Line Workers Get Overtime
The California Workforce Resource Blog has a post lamenting the recent decision in Davis v. J.P. Morgan Chase & Co. In Davis, the court held that Chase erroneously classified its loan officers as exempt administrative employees. The court held that the loan officers were nothing more than financial production workers churning out the bank’s lending products and therefore were entitled to overtime. The bank had erroneously classified these workers as administrative employees who were salaried and exempt from overtime.
This decision means that thousands of wall street support personnel are likely being deprived of overtime. Now, loan officers, brokers, analysts, account executives and many other positions are entitled to overtime.
According to the Davis case, an employee qualifies for the administrative exemption under the Fair Labor Standards Act only if the employee’s primary purpose is devoted to the internal operations of the company such as human resources, accounting, or advertising. These positions are considered administrative because they deal with the administration of the company itself and not with producing the goods or services of the company.
In Davis, a group of loan underwriters were classified as administrative employees who were exempt from overtime. The court held that this classification was wrong because the loan underwriters work was focused principally on producing the bank’s product, loans and not geared to the internal operation of the bank itself. This ruling is likely to provoke a round of overtime lawsuits challenging wall street banks for misclassifying its employees.
