Margaret R. Miglietta
A California court has ruled insurance companies must pay their insurance adjusters overtime. Pursuant to Wage Order 4-1998 and Wage Order 4-2001, regulations promulgated by California’s Industrial Welfare Commission (ICW), as well as the Eight-Hour-Day Restoration and Workplace Flexibility Act of 1999 employers do not have to pay overtime to administrative employees. Interpreting the statute and the wage orders, the court stated an administrative position must meet both a qualitative and quantitative test in order to be exempt from overtime compensation. Qualitatively, the work performed must “directly relate to management policies” or deal with “running the business itself or determining its overall course or policies,” and not just with carrying out the day-to-day business. Quantitatively, an administrative position’s work must be primarily involved with such management or operational policies, not just on a limited or sporadic basis. The court found insurance claims adjusters primarily performed day-to-day tasks involved in adjusting individual insurance claims, and were not involved with running the general operations of the insurance companies or in deciding the companies’ overall course or management policies. Therefore, claims adjuster do not qualify as “administrative” employees exempt from overtime compensation. See, Harris v. Superior Court (Liberty Mutual Insurance Co.) 2012 DJDAR 10103 (CA-2nd Dist.)
