Another ‘close call’ on who gets overtime

One factor in deciding whether employees are eligible for overtime is whether they exercise judgment and discretion in the course of doing their work. Employees who are empowered to make independent decisions typically don’t qualify for time-and-a-half.

When there’s a dispute about overtime eligibility, this sometimes leads to an ironic situation in which bosses claim in court that their workers are highly skilled decisionmakers, while the workers themselves argue that they’re just mindless drones.

The latest battle of this type occurred in a federal appeals court in Ohio when a group of bank employees who worked as residential loan underwriters claimed they should be paid overtime.

The employees were in charge of deciding whether home mortgage applicants should get a loan. According to the employees, they weren’t making these decisions on their own; rather, they relied on software programs that crunched the applicants’ financial information and compared it to the bank’s lending criteria and relevant government regulations.

But the court sided with the bank, and said the underwriters were in fact using their own judgment in making decisions, even though they consulted published guidelines in the course of doing so. The court said that while the underwriters weren’t allowed to determine how much risk the lender was willing to take on mortgage loans in general, they did pass judgment on how risky a given loan was to the bank in each particular case.