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Guaranteed Rate Faces Wages and Overtime Class Action

San Diego, CA: An employment class action lawsuit has been filed against Guaranteed Rate Inc, alleging that the mortgage lender has violated the rights of loan officers under the California Labor Code. The lawsuit against Guaranteed Rate for Labor Code violations was filed in San Diego Superior Court, entitled North v. Guaranteed Rate Inc.

The class action complaint alleges that the mortgage lender unlawfully paid loan officers below minimum wage, failed to compensate them for overtime hours worked and unjustly deducted expenses from previously earned wages, in violation of state wage and hour laws. The complaint asserts that Guaranteed Rate incorrectly and intentionally classified loan officers as “outside salespeople,” making them exempt from some minimum wage and overtime regulations. However, these outside sales employees claim to have spent more than 50 percent of their working time in their homes, which the employees argue is considered the employer’s places of business for purposes of the outside sales exemption from minimum and overtime wage laws.

The Guaranteed Rate Loan Officer class action lawsuit further alleges that the mortgage lender intentionally misclassified the loan officers as outside salespeople in order to avoid overtime and minimum wage requirements in violation of California employment laws. Specifically, the complaint states, the sales plaintiff was paid a “percentage of the profit obtained from the sale of the loan” and as a result “there were pay periods during which the Plaintiff received less than minimum wage or no compensation.” This compensation structure caused the loan officers to often work more than 8 hours per day and/or 5 days per week, which was allegedly known by the the Mortgage Loan Company. According to California overtime laws, employers are required to pay employees overtime compensation for all hours worked in excess of eight hours in a single workday or forty hours in a workweek.

The loan officer class action against Guaranteed Rate further alleges violations for unlawful deductions of earned wages in the form of “loan processing rush fees, marketing charges, loan appraisal overages and other related chargebacks on loans which the [loan officers] had already earned compensation.” According to the California Labor Code, it is unlawful for an employer to take back any portion of an employee’s wages previously paid to said employee.

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Last updated on Jul-28-11