I was asked an interesting question the other day: an insurance adjuster asked if he qualifies for overtime under Connecticut’s wage and hours laws. After researching the question, the answer shocked me. Simply put, no, insurance adjusters do not qualify for overtime under state and federal wage and hour laws.
Both the Fair Labor Standards Act and Connecticut wage and hour laws require that “each employer shall pay 1-1/2 times the employee's regular rate of pay after 40 hours in the workweek. Overtime pay is due for actual hours worked over 40.” However, as with everything in the law, there are exceptions. For the most part, the federal and state exceptions are very similar. The exemption that applies to insurance adjusters is the “ executive, administrative, professional employees” exemption.
An insurance adjuster is considered an “administrative employee” because they have discretion and exercise “independent judgment.” In fact, the Department of Labor specifically addresses “Insurance Claims Adjusters” in Fact Sheet #17L.
“Whether they work for an insurance company or other type of company, insurance
claims adjusters generally meet the duties and requirements for the administrative
exemption and are not entitled to overtime pay if their duties include activities such as interviewing insureds, witnesses, and physicians; inspecting property damage; reviewing factual information to prepare damage estimates; evaluating and making recommendations regarding coverage of claims; determining liability and total value of a claim; negotiating settlements; and making recommendations regarding litigation.”
On the other hand, insurance appraisers probably will qualify for overtime. Appraisers do not exercise the same level of discretion as adjusters. An appraiser is mainly responsible for estimating damages, which are subsequently provided to the adjusters to assist them in processing the claim.
This is unfortunate. Insurance adjusters are often referred to as the hardest workers in the industry. They are often saddled with quotas and deadlines, requiring them to work long hours and weekends. Furthermore, insurance claims adjusters are not highly paid employees. A simple internet search revealed a salary range of anywhere from $36,000 to $100,000 per year, depending on length of service and experience.
I suppose career insurance adjusters humbly have to accept the reality of it and try to negotiate a higher salary from the start.