In response to growing litigation and concerns from the financial services industry, on November 27, 2006, the United States Department of Labor issued Opinion Letter FLSA2006-43, which opines that registered representatives employed in the securities and financial services industries as account executives, broker-representatives, financial representatives, financial consultants, financial advisors, investment professionals, and stock brokers generally are exempt from the overtime provisions of the federal Fair Labor Standards Act.

Under 29 C.F.R. § 541.200(a), an employee is deemed employed in a "bona fide administrative capacity" and exempt from overtime compensation if the employee:

(1) Is compensated on a salary or fee basis at a rate of not less than $455 per week;

(2) Whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and

(3) Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

The DOL opined that these financial services functions generally satisfy the salary and "primary duty" criteria for the administrative exemption and therefore need not be paid overtime as part of their compensation.

Follow this link to read the full text of the opinion letter. For more information about the DOL opinion letter or Jorden Burt's Employment Practices Risk Assessment Program, please contact James M. Sconzo at (860) 392-5022 or Irma Reboso Solares at (305) 347-6843.