Insurance Adjusters Held Exempt from Overtime Pay

In this class action, the class representative alleged that three categories of claims adjusters were improperly classified as administrative employees exempt from overtime pay under Washington?s Minimum Wage Act (MWA), RCW 49.46.010 et seq. ?Pemco conceded that the class of employees (auto? physical? damage? adjusters)? is? non-exempt; the trial court found the other two classes (casualty and property adjusters) exempt as administrative employees because the classes met both the duties test and the salary basis test.?? Finding the DOL regulation, 29 C.F.R. sec. 541.203(a), persuasive, the Court of Appeals affirmed holding that the adjusters? duties met the requirements of the administrative exemption because they interviewed witnesses, performed inspections, reviewed facts to prepare damages estimates, evaluated coverage of claims, determined liability and value of claims, negotiated settlements, and made recommendations about litigation. Likewise, finding ?guidance ?in ?the ?DOL ?regulation, ?29 C.F.R. sec. 541.202(a), the Court upheld the trial court?s conclusion that the adjusters exercised sufficient? discretion? and? independent? judgment by evaluating claims, hiring experts, offering initial payments, and independently negotiating settlement of claims even though the adjusters were supervised when handling ?more costly claims.??? Similarly,?? applying?? another?? C.F.R. relied on by the Washington Supreme Court, the appellate court found that Pemco paid the adjusters on a salary basis test regardless of whether plaintiff was correct in his assertion that Pemco ?had a policy of taking deductions from the pay of adjusters who missed work after exhausting accrued leave.??? Mitchell v. Pemco Mutual Ins. Co., No. 55834-0-I (Aug. 28, 2006).