Legal Ease is the weekly Q&A from the IBAT Bottom Line. Go to the Legal Ease Archive.
Latest Additions to Legal Ease:
We have a husband who is an authorized signer on his wife's account. She is the sole owner of the account, but the husband regularly deposits his paychecks into her account. Is this a problem? Would the funds in the account be subject to a garnishment or levy since he is depositing his funds into her account?
We have a certified appraiser on staff. Our question is in regards to whether or not this employee is an exempt employee or a nonexempt employee?
Employees whose jobs are governed by the Fair Labor Standards Act (FLSA) are either "exempt" or "nonexempt." Nonexempt employees are entitled to overtime pay. Exempt employees are not. Most employees covered by the FLSA are nonexempt. Some are not. You should regularly review the roles and classification of employee positions within your bank to ensure they are properly classified.
The risk is that an employee who is misclassified as "exempt" and not paid overtime will later file a legal action alleging that he or she worked more than 40 hours in a workweek, perhaps for a period of years and will demand all of the unpaid overtime, penalty damages, interest and attorneys' fees. Note also that an employee may not elect to be treated as "exempt." In addition, non-exempt employees must keep time records.
You will need to carefully review the specifics for your staff appraiser and should consider consulting with a Human Resource Professional, but they likely qualify for the "Professional Exemption". Below is from the Department of Labor Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA).
To qualify for the learned professional employee exemption, all of the following tests must be met:
- The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
- The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
- The advanced knowledge must be in a field of science or learning; and
- The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
Question regarding the new mortgage rules: We have always taken copies of tax returns provided by our customers. If we didn’t trust them, we wouldn’t be making a loan to them! Do the new mortgage rules (ATR/QM) require that we get the return from the IRS? How about payroll information to verify monthly income?
We have an executor of an estate requesting information on a joint account held by the deceased and another third party - specifically copies of checks. Does the executor(-trix) of an estate have the authority to obtain account history on joint accounts if the other joint account holder is not deceased?
Yes. Generally speaking an individual appointed by the court and having certified copies of Letters Testamentary has the right to account histories and to obtain, for example, copies of checks. That would apply to joint accounts as well. It is important that the executor have access to this information as he/she identifies and gathers the assets of the estate. As an example, the deceased may have a direct deposit into that account that the executor doesn't know about and access and examination of the account statements may be the only method of discovering it.
Important to note is that an executor named in the will has NO authority to act until he or she is issued Letters Testamentary. With Letters Testamentary, the executor or executrix can then go back to the bank and present the Letters Testamentary and a death certificate in order to claim the assets and accounts on behalf of the estate. If the decedent died without a will, the court may appoint an administrator and issue Letters of Administration which would give the administrator the same authority.
Additionally, this would not violate the privacy of any joint accountholder under GLBA.