Insurance Investigators

Insurance investigators are often classified by their employers as Administratively Exempt – meaning they are not required to be paid overtime wages. To qualify under the Administrative Exemption to the federal wage laws, all of the following tests must be met:

The employee must be compensated on a salary or fee basis at a rate not less than $455* ($684 as of 1/1/20) per week;
The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

* The Department of Labor under the Obama Administration increased this salary amount to $913 per week effective 12/1/2016; however, this increase was blocked by a court ruling. Instead, the Trump Administration only increased the salary amount to $684 per week effective 1/1/2020. Please see this page for the latest updates.

Several recent lawsuits have challenged employers’ classification of insurance investigators as “exempt” from overtime pay based on the argument that their duties do not require independent judgment and discretion with respect to matters of significance as required by the exemption.

In a recent suit against Veracity Research, the court listed several factors to consider when determining whether an employee exercises discretion and independent judgment:

whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices;
whether the employee carries out major assignments in conducting the operations of the business;
whether the employee performs work that affects business operations to a substantial degree, even if the employee’s assignments are related to operation of a particular segment of the business;
whether the employee has authority to commit the employer in matters that have significant financial impact; whether the employee has authority to waive or deviate from established policies and procedures without prior approval;
whether the employee has authority to negotiate and bind the company on significant matters; whether the employee provides consultation or expert advice to management;
whether the employee is involved in planning long- or short-term business objectives; whether the employee investigates and resolves matters of significance on behalf of management; and
whether the employee represents the company in handling complaints, arbitrating disputes or resolving grievances.

Finding that Veracity’s written guidelines explained in great detail how investigators should conduct an investigation, that investigators were required to obtain all facts regardless of their impact, and that investigators did not include their own opinions, conclusions, or recommendations regarding deciding whether to pay or deny the claim, the court held that Veracity’s investigators’ duties did not equate to having discretion and independent judgment with respect to matters of significance.

In another case, one of Geico’s former Senior Security Investigator’s filed an an overtime pay claim alleging that investigators were not allowed to exercise independent discretion and judgment with respect to matters of significance. Geico’s Security Investigators are responsible for obtaining statements, interviewing witnesses, taking photographs and writing preliminary reports regarding their findings when investigating claim. However they do not decide or influence whether to pay or deny a claim they have investigated.

If you are an insurance investigator and believe that you have been misclassified as exempt, denied overtime pay or if you would like to get more information, please call us at 1-866-559-0400, email us at mlore@overtime-flsa.com or submit your information using our convenient Case Evaluation form for a FREE and CONFIDENTIAL review of your circumstances.