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Loan Officer Compensation Arizona

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  • Loan Officer Compensation Arizona

    How should a Loan Officer be compensated when he/she does not earn any commission for that payperiod? I know they should at least receive minimum wage for the hours they worked. Can a company consider those wages a draw and deduct them from the next commission the Loan Officer makes? I don't think it's legal to make an employee pay back wages earned. So if this is not the correct process, what is?

    Is there a website specific to this area? I haven't been able to find much?

  • #2
    Employee compensated on a commission basis

    Every commission plan must have a settlement period, "a balancing the check book process". And once the settlement period is establish and follow, the employer can not go back behond the settlemant period to recover excess of min wage. Below are portions of the US DOL-Wage Hour Division, Field Operation Handbook (FOH).

    FOH 30b05 Employee compensated on a commission basis.

    (a) Many employers, especially in retail enterprises, compensate certain employees wholly or in part on a commission basis. The methods of computation and payment involving commissions vary widely (see IB 779.413) and the determination of minimum wage compliance must be made on the facts of each case. The general principles (except in circumstances where Set 7(i) is applicable) are as follows:

    (b) If an employee paid wholly or in part on a commission basis is subject to overtime, the principles set out in IB 778.117-122 shall be followed.

    (c) If an employee paid on a commission basis is exempt from overtime, such as salespersons referred to in Set 13(b)(10) of FLSA, the following shall be used in determining whether the employee is paid in compliance with minimum wage requirements:

    (1) There is no requirement that wages be paid weekly, as long as some regular pay period (such as biweekly or monthly) is established by the employer. The only requirement is that employees receive "prompt payment" of the minimum wage requirements: covering all hours worked during the pay period.

    (2) A "settlement period" does not have to coincide with the regular pay period. However, in the absence of strong evidence to the contrary, it must be assumed that an employer intended that a settlement period for commissions represent the pay period for the affected employees. Where a pay (settlement) period exceeds one month, the facts should be developed since the bona fides of the pay (settlement) period raise serious questions as to the validity of the pay arrangement.

    "A veteran - whether active duty, retired, national guard, or reserve - is someone who, at one point in his or her life, wrote a blank check made payable to The 'United States of America', for an amount of 'up to and including my life.'" (Author unknown)


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