Some companies seem determined to get as much as they can out of their employees while paying as little as they can. Even after remedying one labor law violation, companies sometimes find another way out of paying employees for all of the time that they work. This was allegedly the case after Allstate Insurance changed the status of its California-based claims adjusters from overtime exempt to non-exempt in 2005. The company allegedly followed that move by empowering managers of the 13 local offices “to file a timekeeping ‘exception’ or ‘deviation’ from the default expectation of 8 hours per day and 40 hours per week.” Allstate also allegedly maintained a non-negotiable compensation budget for each office. In effect, this meant that, “the amount of overtime a manager may approve is allegedly functionally limited.”
Under the federal Fair Labor Standards Act (FLSA) all employees working within the United States are entitled to one and one-half times their normal hourly rate for all time spent working after eight hours a day or forty hours a week. The Act does provide exceptions to this rule, but it is very specific about the types of workers that are entitled to the overtime exemption. The employees must earn an annual salary of at least $23,600 and fit into one of three categories: administrative, executive, or professional. Any employee that does not meet the requirements for one of these categories cannot be classified as exempt from overtime, even if they earn a salary.
Accordingly, Allstate’s move to classify its claims adjusters from overtime exempt to non-exempt would have been a good move if the employees did not meet the qualifications for overtime exemption. Unfortunately, requiring non-exempt employees to work overtime, without providing them with the proper overtime compensation, is not fair to the employees and is illegal.
According to a recent wage and hour class action lawsuit against the insurance company, this is exactly what it has been doing since 2005. Jack Jiminez, the lead plaintiff who originally filed the lawsuit, alleges that Allstate did not pay its claims adjusters overtime when they worked more than eight hours a day or forty hours a week, did not cover missed breaks (as required by California labor law), did not pay all wages due in a timely fashion after a worker’s employment had been terminated, and committed acts of unfair competition.
Jiminez sought to represent a class of all current and former claims adjusters who had worked for Allstate in California and worked overtime. Allstate sought to have the class decertified. The court ruled in favor of Jiminez and certified a class with respect to all claims except the meal breaks.
According to the U.S. District Court Judge John Kronstadt, the claim that stood out the most was the allegation that Allstate “had an ‘unofficial policy’ of denying overtime while requiring overtime work.” The case will proceed as a class action lawsuit to determine if Allstate did in fact have such a policy, and if so, if that policy resulted in nonexempt employees working overtime without receiving the proper overtime compensation. Allstate denies that it did anything wrong and denies the claims.The attorneys at Chicago Overtime Law Center have decades of experience litigating wage and hour cases, including overtime, vacation pay, meal breaks, and tips. We have offices conveniently located in Oak Brook and Chicago, Illinois. Contact the Berwyn and Chicago Heights overtime lawyers and attorneys at the Chicago Overtime Law Center today at 312-869-4095. We are looking to represent loan and mortgage brokers who have not been paid overtime and have been mis-classified as managers.