The U.S. Ninth Circuit Court of Appeals, which covers California, has ruled that insurance adjusters for Farmers Insurance Exchange qualified for the administrative exemption from overtime, according to the standards under the federal Fair Labor Standards Act. In so ruling, the appeals court threw out a $52.5 million judgment awarded by a federal trial court in Oregon to 1,039 adjusters in Colorado, New Mexico, Oregon, Washington, Minnesota, and Michigan covered by the class action lawsuit.
But the win doesn’t provide much comfort for California employers, who are covered by stricter state standards for determining overtime exemptions. In fact, just two years ago, Farmers agreed to pay $210 million to settle claims that its California claims adjusters were misclassified as exempt and owed back overtime. That settlement came after the company lost its appeal of a $90 million verdict awarded by an Alameda County jury.
Paying Overtime: 10 Key Exemption Concepts
Only one thing really matters in the determination as to whether or not an employee is exempt: The duties the employee performs. Learn how to avoid costly, preventable mistakes with our free White Paper, Paying Overtime: 10 Key Exemption Concepts.
Who’s Entitled to Overtime: How to Avoid Mistakes When Classifying California Employees, an exclusive Employer Guide from the California Employer Advisor