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January 11, 2005
State Farm to Pay $135M to Settle Overtime Suit
State Farm Insurance Cos. has agreed to pay $135 million to settle a lawsuit accusing the company of incorrectly classifying 2,600 claims adjusters as exempt from overtime, the Los Angeles Times reports.

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State Farm had argued that the calims adjusters were covered by an exemption for administrative employees.

The newspaper notes that in general, California's overtime rules are stricter than federal rules. California's exemption rule requires a higher salary, has stricter duties requirements, and has a 50 percent time requirement for the primary duty test.

When the newspaper contacted the company, a spokesperson confirmed the settlement but declined further comment.

An attorney for the plaintiffs tells the newspaper that the average award for each of the plaintiffs would be about $34,000.


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