Underwriters Are Entitled to Overtime Pay
Recently, the United States Court of Appeals for the Second Circuit ruled that loan underwriters are not exempt from overtime. The judges said these workers follow strict employer guidelines. Because of that, they qualify as employees who can earn overtime pay.
Why the Administrative Exemption Failed
For years, many banks labeled underwriters as “administrative staff.” As a result, companies denied overtime using the Administrative Exemption defense. Yet, the court rejected that logic.
More importantly, the judges explained that underwriters do production work, not internal administration. They don’t design policies. They also don’t handle HR, marketing, or ads. Instead, their job focuses on loan approval. This is the core service a bank delivers to customers.
Production vs. Administration: The Key Difference
To clarify the rule, the court used simple reasoning:
- Unlike executive planners, these workers never control strategy.
- Rather than advising clients, they approve loans using preset rules.
- Since approval work is essential for the bank to operate, it belongs to “inside-the-business” labor.
- Therefore, companies must treat this role as production-based employee work.
Money Impact on Workers
Many underwriters reported they worked long hours on a salary. However, their employers never paid time-and-a-half. Because of this decision, affected staff may request pay audits. They may also reclaim unpaid overtime when employers apply the exemption incorrectly. This increases legal risk for financial firms that block earned wage rights.
Quick Self-Check for Underwriters
Ask yourself:
- Does your employer set the rules you follow daily?
- Do you approve loans instead of advising loan strategy?
- Does the bank depend on your approvals to deliver loans?
- Do you work 40+ hours but receive no overtime rate?
If most answers are yes, your job may meet overtime eligibility in this circuit.
Final Note
In short, the court confirmed that companies cannot use discretion or titles to cancel overtime rights. They must pay overtime when the job performs essential, rule-driven production work.
