President Barack Obama's reported proposal to require more businesses to pay their employees overtime has highlighted the grey area around what positions in the advice business should be for paid hours worked outside the traditional work week.
Although his plan, which was reported on Wednesday by The New York Times, hasn't been fully unveiled, many said that any effort to expand overtime could add to confusion in an industry that has struggled with how to classify certain workers, such as trainees, client associates and even financial advisers themselves.
“If there's a problem where people should be getting overtime pay and they're not, then maybe we should be looking closer at the rules that are already in place,” said Debra Girvin, president of Lochlyn Company, a human resources consulting firm. “We need to bring that in order, and then if we still think something's wrong, then change the rules to broaden the scope.”
News of the president's proposal arrives as a number of large firms, including JPMorgan Chase & Co. and Bank of America Merrill Lynch, continue to face class actions and multimillion-dollar settlements in cases where they were accused of misclassifying stockbrokers and advisers.
Most stockbrokers and advisers are presumed to be exempt under the administrative exemption in the Fair Labor Standards Act, according to Mary Dunlap, founder of an eponymous consulting fir
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