Loan underwriters are not exempt from overtime compensation requirements established by the Fair Labor Standards Act the Second Circuit has ruled in Davis v. JP Morgan Chase & Co., No. 08-4892-CV (November 20, 2009). The court framed the question as follows: "whether underwriters tasked with approving loans, in accordance with detailed guidelines provided by their employer, are administrative employees exempt from overtime requirements of the Fair Labor Standards Act." In answering this question in the affirmative the court identified the following primary factors:
- Chase expected an underwriter to evaluate each loan application under its credit guide and approve the loan if it met the guide's standards
- exemptions from overtime requirements are to be narrowly construed against the employers seeking to assert them and their application limited to those establishments plainly and unmistakably within their terms and spirit
- the administrative exemption applies to an employee performing work directly related to management policies or general business operations and customarily and regularly exercises discretion and independent judgment
- production and sales work does not fall within the administrative exemption
- nonexempt production work does not require production of tangible goods
- the loan underwriters did not advise customers; they determined, based on criteria established by the bank, whether the customers financially qualified for their loans
- the payment of production incentives supported the conclusion that the underwriters job function was production rather than management related
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