AIG hit with overtime lawsuit disputing exempt status — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

AIG hit with overtime lawsuit disputing exempt status

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Two New Jersey claims adjusters for AIG Inc. in New York City have filed a class-action lawsuit against the insurer alleging it improperly classified them as exempt from overtime pay.

The adjusters contend they were not executive, administrative or professional employees as defined by the federal Fair Labor Standards Act (FLSA). They could not exercise independent judgment while assessing claims, the lawsuit says, and could not issue checks on their own.

The lawsuit, filed in U.S. District Court for the District of New Jersey, seeks back pay for overtime since January 2001 for all similarly situated AIG employees. If the adjusters win, the payout will probably be large—Allstate settled a similar suit in California for $120 million, and State Farm settled a back-wage suit for $200 million.

Final note: Re-evaluate the job descriptions of employees who routinely work more than 40 hours per week. Ask yourself if you could defend their exempt status under the FLSA.

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