Two American International Group adjusters in New Jersey have brought a prospective class-action against their employer, alleging the insurer illegally denied overtime pay to hundreds of non-supervisory workers.

Filed last week in the U.S. District Court in Camden, N.J., the suit charges that the insurer intentionally misclassified hundreds of employees who perform “basic clerical tasks” as qualifying for the federal overtime exemption that applies to executive, administrative or professional employees.

The action, brought under the Federal Fair Labor Standards Act, was announced by Philadelphia attorney David J. Cohen, who represents Sandy Dorofy and Angela Bonnett–two adjusters in AIG's Mt. Laurel, N.J. office.

No monetary figure is listed, but the complaint seeks back overtime, punitive damages, liquidated damages, interest and legal costs for the two women, who have worked at the firm since 2001–initially as bodily injury adjusters, and later as senior extended claim-handling representatives.

Prospective additional claimants with the same job categories number 200 employees in 26 states, but according to the complaint, that is expected to be larger because it includes people working in those job slots going back to 2001.

Mr. Cohen said the eventual claim against the company would depend on how many AIG employees decided to join the suit.

Chris Winans, AIG media relations vice president, said in a statement that the company believes “this action is without merit. These job classifications were established with legal advice from outside counsel and explicitly based on the Department of Labor's regulations and opinion letters. As a result, we are confident we exercised proper judgment with respect to the classification of these positions.”

The suit claims that under federal law, the adjusters should have been paid at least one-and-one-half times their regular hourly rate for working more than 40 hours in a given work week.

Ms. Dorofy and Ms. Bonett allege that to complete their assigned work, avoid supervisors' censure and retain their jobs, they “routinely worked more than 40 hours each work week.” The women's work was scrutinized by supervisors who assigned and directed their activities, and deprived them “of any significant discretion or independent judgment,” it was charged.

In announcing the suit, Mr. Cohen–who is with the firm of Saltz, Mongeluzzi, Barrett & Bendesky–noted that major insurers have settled overtime pay litigation in recent years.

In 2005, Allstate Corp. agreed to pay as much as $120 million to settle allegations it denied California workers overtime pay, and that same year State Farm agreed to pay $135 million to settle an overtime lawsuit by California claims adjusters. In 2004, Farmers Insurance Exchange agreed to pay as much as $210 million to resolve overtime claims.

“AIG appears to have knowingly and willfully denied plaintiffs and their colleagues overtime pay for no other reason than to improve its bottom line,” said Mr. Cohen

“I am committed to AIG's customers and to the company, but I also believe in getting an hour's pay for an hour's work and earning overtime pay for the overtime hours I worked,” Ms. Dorofy said in a statement.

Special Reports /

Adjusters Sue AIG For Overtime

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