California Supreme Court: Claims adjusters exempt from overtime laws
California's Supreme Court recently reversed a state appellate court's 2007 ruling that claims adjusters are nonexempt from earning overtime employee attendance compensation.
The issue was raised by class action lawsuits filed by adjusters employed by Liberty Mutual and its California-based Golden Eagle Insurance unit. The plaintiffs alleged that they had been misclassified as exempt from time and attendance legislation that afforded them overtime for work that exceeded 40 hours in a week.
State and federal statutes set specific standards for exemption from overtime compensation. Specifically, workers must be paid at a certain level, perform administrative work as part of their primary duties and regularly exercise independent judgment and discretion during the course of their jobs.
The state Supreme Court ruled that the appellate court "provided its own gloss to the administrative/production worker dichotomy" when it made its decision.
"What this should do is give insurance companies a safe harbor for designing the role of their claims adjusters to assure they are exempt from overtime rules," commented Paul E.B. Glad, a partner and head of the appellate practice in the San Francisco office of SNR Denton, as quoted by Business Insurance.
The issue was raised by class action lawsuits filed by adjusters employed by Liberty Mutual and its California-based Golden Eagle Insurance unit. The plaintiffs alleged that they had been misclassified as exempt from time and attendance legislation that afforded them overtime for work that exceeded 40 hours in a week.
State and federal statutes set specific standards for exemption from overtime compensation. Specifically, workers must be paid at a certain level, perform administrative work as part of their primary duties and regularly exercise independent judgment and discretion during the course of their jobs.
The state Supreme Court ruled that the appellate court "provided its own gloss to the administrative/production worker dichotomy" when it made its decision.
"What this should do is give insurance companies a safe harbor for designing the role of their claims adjusters to assure they are exempt from overtime rules," commented Paul E.B. Glad, a partner and head of the appellate practice in the San Francisco office of SNR Denton, as quoted by Business Insurance.
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