Here is a new twist in the broker overtime pay lawsuits: The Department of Labor (DOL) says brokers are not entitled to overtime pay after all. Well, that is, unless the DOL is wrong, which it allowed could be the case. (No kidding.)

The DOL issued an eight-page letter in response to a request by the Securities Industry and Financial Markets Association (SIFMA, formerly the SIA), which asked the DOL to issue an opinion on whether registered reps are, in fact, entitled to overtime pay. (Lawyers, wielding a Depression-era labor law to protect unskilled hourly workers, have been arguing that brokers are entitled to receive overtime because, essentially, what they do is not creative nor is it a profession. (Click here to read more about Wall Street’s overtime fight.)

Brian Dixon, a labor lawyer with Nixon Peabody in Irvine, Calif., says courts do not have to abide by DOL opinion letters. “The opinions are given substantial weight, but they are not like statutes which have to be followed.”

After reviewing the duties and compensation practices of reps as presented by SIFMA, Paul Decamp, administrator of the Wage and Hour Division of the DOL, says that brokers are not covered by the Fair Labor Standards Act of 1938 under the “administrative exemption.” Essentially, those who fall under this exemption deal primarily with performance of office or nonmanual work directly related to the management or general business operations of the employer or the employer’s customers, and exercise discretion and independent judgment. Non-exempt employees, on the other hand, must be guaranteed a weekly salary of $455 per week.

The opinion was issued the same week Merrill Lynch agreed to settle its overtime suits with brokers nationwide. (For more on that settlement, click here.) The amount was not disclosed, but Merrill isn’t the only firm to spend millions to settle this new wave of wage and hour suits. In March, Morgan Stanley settled with about 5,000 brokers in California for $42.5 million. UBS and Smith Barney paid brokers nationwide $89 million and $98 million, respectively, to settle their overtime settlements.

Mark Thierman, the lawyer representing reps in several overtime cases, argues that brokers are salespersons driven by commissions and, therefore, cannot be considered administratively exempt. “Calling a broker, who earns most of his pay from commission on sales, administratively exempt is like calling a person who sells clothing at Men’s Warehouse a fashion textile consultant.”

However, the DOL indicates in a footnote that if a rep’s “primary duty is selling investments to clients” then he “will not qualify for the administrative exemption.” But based on the information provided by SIFMA, brokers’ duties are “collecting clients’ financial information (including assets, income, debts and other liabilities, cash flow and tax status), analyzing the information, comparing and evaluating possible investment options and identifying investment strategies and potential investments based on their knowledge of market conditions and clients’ particular circumstances.”

Further, the DOL says existence of other facts and background not included in SIFMA’s description “might require a conclusion different from the one expressed.”

Travis Larson, a spokesperson for SIFMA, says, “We’re pleased the DOL confirmed the understanding long held by SIFMA that employees who perform the duties of a registered representative do not fall within the category of employees who must be paid on an hourly basis. These litigation claims were contrary to the interests of registered representatives, who do not want to be treated like hourly employees who work only those hours approved by their employer and who are required to keep records of the time they work, including their break periods.”