Claims Adjusters and Others Likely Non-Exempt in California

Defense attorneys for large corporations in California have been trumpeting the case of In re Farmers Ins. Exch., 466 F.3d 853 (9th Cir. 2006) for the proposition that insurance claims adjusters are now exempt employees who are not entitled to overtime pay. However, this is not true when it comes to employees in California.

Case Brought in Oregon

Although the case is a 9th Circuit opinion, the case was brought in Oregon. Sometimes in California we forget that there are other states in the 9th Circuit besides us. As it happens, none of the Plaintiffs had a connection to California.

Case Decided Under Federal Law

This case was not only brought in another state, but also under federal (not state) overtime laws.

In 2004, the Bush Administration's Department of Labor issued new federal overtime regulations that were very anti-employee, resulting in many employees being re-classified as exempt from overtime pay.

Under these new laws, the employees who brought the In re Farmers Ins. case lost their case.

Ruling Does Not Effect California Employees

For virtually all intents and purposes, the In re Farmers Ins. case (and the 2004 change in federal law) does not affect the rights of California employees to overtime pay.

This is because California law is much more employee-friendly when it comes to guaranteeing overtime for most employees. Many employees who would be considered exempt under federal law are clearly non-exempt under California law.

The case of Bell v. Farmers Ins. Exchange, 115 Cal.App.4th 715 (2004) came to the opposite conclusion as the Court in In re Farmers Ins. While the defendant in both cases was actually the same company, the Bell case was decided based on California law (not federal).

So, in California insurance claims adjusters (and most other employees) are still entitled to overtime pay, despite what you may have read elsewhere.

Tags

California Employment Law | Cases | Wages : Overtime | Wages and Hours

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