Quantcast

Judge determines financial advisers are exempt from overtime

NORTHERN CALIFORNIA RECORD

Thursday, November 21, 2024

Judge determines financial advisers are exempt from overtime

Debt

SAN FRANCISCO – While lawsuits over unpaid overtime are frequently filed, the complaints mostly come from lower-wage workers. But a recent suit in the U.S. District Court for the Northern District of California involved financial services professionals – workers who don't raise this issue "nearly as much," Allan Bloom, an attorney at Proskauer Rose, told the Northern California Record.

In Tsyn v. Wells Fargo Advisors LLC, the judge determined that two financial advisers primarily performed duties that are exempt from overtime pay under the Fair Labor Standards Act.

“It’s a helpful decision, it’s the right result and it’s what the (Department of Labor) itself has been saying for nearly 70 years,” Bloom said. “A financial adviser who is making recommendations to a client should be exempt from the overtime requirements.”

The proposed class action centered on the financials advisers’ primary duties. Wells Fargo claimed that the plaintiffs’ most important tasks involved “collecting and analyzing customer information, assessing which financial products and services would best suit a client’s needs, and giving clients appropriate advice,” according to the decision. That would fit the advisers under the administrative exemption in the FLSA. While the plaintiffs agreed that they performed those duties, they claimed that their primary duty was sales, and should qualify them for overtime pay.

Judge Laurel Beeler agreed with Wells Fargo and offered summary judgment in the suit.

“An employee’s 'primary duties' are the 'main, major, or most important duties that the employee performs' when you look at the character of his or her job as a whole,” Bloom said, citing a Department of Labor definition.

In determining what is “primary,” useful factors to consider can include the relative importance of the duty compared to others or the amount of time spent on each.

In the decision, Beeler pointed to previous court decisions and a DOL opinion letter from 2006. The DOL letter concluded that licensed financial professionals tasked with analysis, judgment and advice fall under the FLSA administrative exemption. Sales were an “incidental” aspect of the job, the decision stated.

More News