Rod Cotner, owner of Jericho Mortgage in Lancaster, Ohio, was shocked when the U.S Department of Labor showed up at his door to investigate a wage-and-hour lawsuit filed on behalf of his 54 loan officers and sales managers.

His company was growing - sales exceeded $4 million that year - and his employees were profiting: "Some of the staffers named in the lawsuit were making over $150,000," he says. "After working in the industry for years, I'd never heard of this happening. Everyone pays their officers on a commission basis. How can someone who makes six figures a year demand back wages for his time?"

Cotner, 37, incorrectly assumed that his employees were exempt under the U.S. Fair Labor Standards Act, which mandates time-and-a-half wages for any hours worked beyond 40 a week. The FLSA exempts white-collar workers who make more than
$100,000 a year but calculates those earnings on a weekly basis - many of Jericho's loan officers went unpaid during the weeks they didn't close loans.......