The U.S. Supreme Court handed the U.S. Department of Labor (DOL) a victory in a battle over whether the agency’s reversal of its stance on the exempt status of mortgage loan officers was subject to public notice and comment. In Perez v. Mortgage Bankers Association, the Court held that the DOL’s 2010 Administrator’s Interpretation concluding that mortgage loan officers do not qualify for the Fair Labor Standards Act (FLSA) administrative exemption was not subject to the notice-and-comment requirements of the Administrative Procedure Act (APA). The decision has implications far beyond the question of whether mortgage loan officers are exempt from the overtime requirements of the FLSA. In rejecting the argument that a federal agency must use the APA’s notice-and-comment procedures when it wishes to issue a new interpretation of a regulation that deviates significantly from a previously adopted interpretation, the Court removed a significant potential impediment to an agency making important policy changes through so-called “sub-regulatory” guidance.
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