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Salaried workers demand extra pay for extra work
LOS ANGELES - As companies cut payrolls, managers say the expanding workload is consuming their lives.

Low-level managers whose long hours on straight salary helped fuel the economic boom are now trying to settle the score in a tidal wave of class-action lawsuits charging employers with robbing them of overtime pay.

Despite such titles as store manager or team leader, many workers say, they spend more time assembling tacos, shoving merchandise onto display racks and running cash registers than doing anything that resembles managing the business.

And by borrowing the class-action muscle that pumped up tobacco and asbestos lawsuits, these white-collar workers are transforming hundreds of small wage claims into multimillion-dollar suits.

Rite Aid Corp. and U-Haul Co. agreed to settle cases for $25 million and $7.5 million, respectively, pending final court approval. Neither company admitted wrongdoing.

WHITE-COLLAR WORKERS say they've earned the money and, after legal expenses, the settlements aren't making them rich.

``There wasn't a whole lot of life outside working,'' said Robert McCorkle, a former salaried manager at U-Haul who believes he was paid less per hour than some subordinates. ``Ten hours was a short day.''

Many white-collar workers, who make up as much as one-third of the American work force, see themselves as slaves to jobs they blame for leaving them stressed, worn-out and rarely available for spouses and children or with little time and energy for other interests.

In every case, the issue is who, as a true manager, can be exempted from overtime pay?

And who is a manager in title only and therefore entitled to premium pay for extra work?

``There's a very common misconception that if someone is paid a salary, then they are not entitled to overtime, which is just simply not the case,'' said employment-law expert Larry J. Shapiro. ``The key is, what are their duties?''

IN A CASE with nationwide implications, 2,400 current and former claims adjusters are demanding overtime pay from Los Angeles-based Farmers Insurance Exchange. ``Being salaried meant there really was no start or stop time,'' said Rose Bell, lead plaintiff in the lawsuit.

When Bell interviewed for her job in 1989, she was told she would work 8 a.m. to 4:30 p.m., she said. But her weeks often hit 60 hours, said Bell, who is on disability leave. She said bosses blamed her organizational skills.

According to a survey for the court, the typical Farmers adjuster makes $30,000 a year and works 50 hours a week, said Steven G. Zieff, a San Francisco lawyer representing the adjusters.

The lawsuit contends adjusters are the equivalent of production workers and ought to be paid overtime. A judge in Alameda, Calif., agreed, and in March an appellate court upheld the ruling.

A hearing is under way to determine what Farmers owes the adjusters.

A Farmers spokeswoman said her company has done nothing wrong. It has asked the California Supreme Court to hear the case, arguing that it could ``add dramatically to a current explosion of class-action litigation.''

IN CALIFORNIA, exempt employees must be paid at least twice minimum wage, and they must spend more than half their time on exempt duties - work that is intellectual, managerial or creative and that requires discretion and independent judgment.

Because adjusters make settlement recommendations, Farmers' petition said, they should be considered administrators and exempt from overtime requirements.

``The benefit to the adjusters is they don't have to `punch a clock,' but can tailor their work schedules to fit their personal and family needs,'' the petition said.

Overtime class-action suits have taken off in California, propelled by favorable laws and court rulings. Many employers, particularly those with national operations, may not know the rules are tougher in California, said David Kadue, a Los Angeles employers' lawyer.

``It turns out they've misclassified them,'' he said. ``And then they find out it's not a matter of making it right for one employee. It's a matter of hundreds or thousands of employees represented by an aggressive plaintiffs' lawyer demanding millions on behalf of the class.''

Settlements often are dwarfed by the ongoing expense of paying overtime to whole tiers of workers previously on straight salary, said David Lewin, a professor at Anderson School of Management at the University of California, Los Angeles. ``The consumer ought to understand that they are going to be paying more,'' he said.

EMPLOYERS WHO ONCE gave little thought to overtime issues are now consulting lawyers. ``For many years, companies felt that they couldn't raise prices at all because the competition was too fierce, so the only way they could make money was to turn out more and more with the same people,'' said Alec Levenson, a labor economist with the Milken Institute. ``We're seeing the consequences of that.''

Labor groups are encouraging overtime lawsuits, advising nonunion white-collar workers nationwide on what the laws are and how to take employers to court, said Mike Gildea, head of the AFL-CIO's Department for Professional Employees. ``We believe there is a pretty widespread epidemic of employers misclassifying workers,'' he said.

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