A lawsuit involving California insurance claims adjusters working for Liberty Mutual Insurance Co. and Golden Eagle Insurance Corp., was passed back down from the California Supreme Court with guidance.
Previous to this Supreme Court decision, the original trial court had granted a summary judgement for the insurance companies. Later, the appeals court had stated references to federal FLSA regulations in determining their reversal of the lower court’s decision.
In remanding the case, the Supreme Court instructed the lower courts to utilize the state labor codes in determining overtime eligibility. Only in the case of a lack of guidance, should the federal FSLA codes be considered. The state Supreme Court instead referred to a 1999 amendment to the California Labor Code and a state regulation.
Harris v. Superior Court, 2011 WL 6823963 (Cal.S.Ct.2011), (Dec. 29, 2011).
As a business owner, the relevant lesson to learn from this situation is to understand your overtime exposure. It may vary depending on which state you have a business presence and the state-level labor laws. In the case of insurance claims adjusters, much of the debate focused on whether they are administrative workers (exempt), or production workers (non-exempt).

Modern Business Associates is an HR company that focuses on payroll and HR outsourcing. We routinely work with clients on labor issues and employee benefits. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.