The whole controversy over broker overtime has always been a bit of an enigma. Stock brokers are professionals, and certainly do not want to be considered hourly wage earners. Yet here they are, taking millions of dollars, collectively, from the wirehouses, through settlements of class actions because they were not paid overtime. In fact, that is the underlying legal theory - brokers are not professionals.
Before anyone jumps on me, I understand the legal issue, I don't understand the political, or public relations issue. It is not good for brokers. And does anyone have a handle on how much money the average class member received in these class actions?
What is even more puzzling is the fact that the Department of Labor is having a tough time with the legal issue. In this month's issue of Registered Rep, Halah Touryalai has a story reporting that the DOL issued an eight-page letter in responding to the SIA inquiry as to whether registered reps are, in fact, entitled to overtime pay.
According to the article, registered reps are not covered by Fair Labor Standards Act of 1938 under the “administrative exemption" and thus are not entitled to overtime. However, in the same letter the DOL indicates in a footnote that if a rep’s “primary duty is selling investments to clients” then he “will not qualify for the administrative exemption.”
Confused? Apparently so is every one else. Merrill Lynch just announced this week that it is the latest firm to pay money to settle an overtime lawsuit.
Both stories are at the Brokers Legal Center at SECLaw.com
