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Supreme Court to Hear Administrative Exemption Case

Earlier this year a California Court of Appeal reaffirmed that insurance claims adjusters not exempt from California’s overtime laws. (See Harris v. Superior Court) This was not a surprising decision considering two other cases in the last 6 years came to the same conclusion. (See Bell cases. See Bell v. Farmers Ins. Exchange (2001) 87 Cal.App.4th 805 and Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715)

What was significant about Harris is that the court analyzed the administrative exemption very thoroughly. The court held that exempt administrative work must involve office work that is directly related to policy making or higher level work. Since an employee must spend at least 50% of his or her time performing this higher level work, many employees previously believed to be exempt will not fit the seemingly higher requirements.

Attorneys familiar with the Labor Commissioner’s position on the administrative exemption viewed the Harris decision as no great surprise because the Labor Commissioner has routinely held that the administrative exemption only applies to persons that spend the majority of their time performing fairly high level work.

Some claimed the Harris court went to far and set too high of a bar for the administrative exemption. Others claimed the Harris court hit the mark. Well, the Supreme Court of California has decided to review the case so we will hopefully find out if the Harris court’s analysis is correct.

This serves as one more lesson to employers that they should review each of their job positions to ensure compliance with California’s overtime laws. Any employee who does not fit squarely within at least one of the exemptions should receive overtime pay.

The Law Office of Phillip J. Griego
95 South Market Street, Suite 520
San Jose, CA 95113
Tel. 408-293-6341
Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.

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Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.