Fair Labor Standards Act (FLSA) Overtime Rules for Insurance Claims Adjusters

If you work as an insurance claims adjuster, chances are you’ve logged plenty of long weeks, often more than 40 hours. And like many adjusters, you’ve probably wondered: Should I be paid overtime?

The answer depends on a few key factors set by the Fair Labor Standards Act (FLSA), a federal law that establishes minimum wage, overtime pay, and other labor protections.

The Exemption Question

Claims adjusters are often classified as exempt employees, meaning they don’t receive overtime pay. But that classification isn’t automatic; it’s based on specific salary thresholds and a job duties test.

Where Things Stand Now

In 2024, the Department of Labor proposed an update to the salary thresholds for exempt employees. However, a federal court blocked those changes, so we’re still operating under the 2019 guidelines:

• Minimum salary: $684 per week (about $35,568 annually)
• Highly compensated employee: $107,432 annually

To be exempt, adjusters must earn at least the minimum salary and meet the requirements of the duties test, which evaluates the nature of their work, not just their job titles.

Where Insurance Claims Adjusters Fit

Many insurance claims adjusters are classified under the “administrative exemption”—one of the white-collar exemptions recognized by the Fair Labor Standards Act (FLSA).

To qualify for this exemption, all of the following must be true:

• You’re paid on a salary or fee basis of at least $684 per week
• Your pay isn’t docked hourly for partial-day absences; salary means consistency.
• Your primary duties involve non-manual, office-related work tied to general business operations
• You regularly exercise independent judgment and make decisions on matters of significance

In most cases, adjusters meet these criteria, particularly when evaluating claims, determining liability, and authorizing payments without constant supervision.

But not all adjusters qualify. You may not meet the exemption if your role is heavily scripted, closely monitored, or limited in decision-making authority. And that could mean you’re entitled to overtime pay under federal law.

Duties That Often Qualify for Exempt Status

If your job primarily involves tasks like the ones below, you likely meet the criteria for exempt status under the FLSA:

• Interviewing policyholders, witnesses, or medical providers
• Inspecting accident scenes or property damage
• Reviewing reports and documentation to prepare damage estimates
• Evaluating whether the insurance policy covers a claim
• Determining claim value and liability
• Negotiating settlements with claimants or their attorneys
• Deciding whether a case should proceed to litigation

These responsibilities typically require independent judgment and discretion. You’re not just following a script; you’re interpreting evidence, making critical decisions, and influencing outcomes. That level of autonomy is a key marker of exemption under the administrative category.

Why Your Job Title Doesn’t Tell the Whole Story

Just because your title says “Claims Adjuster” doesn’t automatically make you exempt from overtime. Under the FLSA, your actual job duties determine whether you qualify, not what’s on your business card or in your job description.

For example, if most of your work involves clerical tasks, data entry, or following strict procedures without room for independent decision-making, you might not meet the exemption requirements. That’s why employers are expected to evaluate job roles based on what you actually do, not just what the role is called.

Unfortunately, not every employer follows through, and misclassifying employees can have serious legal and financial consequences.

What This Means for You

If your day-to-day responsibilities involve analyzing claims, negotiating settlements, and making independent decisions, you may fall under the administrative exemption and not qualify for overtime.

But if your work is routine, heavily supervised, or involves little decision-making authority, you could be entitled to time-and-a-half pay for any hours worked beyond 40 a week.

Being misclassified means potentially missing out on the pay you’ve rightfully earned if your employer denies you overtime despite your duties not meeting the exemption standard, which could violate federal labor law.

What Employers Should Know

Employers must carefully evaluate the actual job duties of each insurance adjuster before classifying them as exempt. Misclassification isn’t just an oversight; it can lead to serious consequences, including back pay, wage claims, and government penalties.

Taking the time to assess exemptions properly helps protect both the business and its employees. No one wants to discover, after a lawsuit, that an employee should have been earning overtime all along.

Not Sure If You’re Owed Overtime?

At Morgan & Morgan, we help workers throughout the nation understand how wage laws apply to their jobs, including insurance claims adjusters.

If you’re unsure about your classification or think your rights are being violated, intentionally or not, you may have a case against your employer.

To find out how we can help, please fill out this form to contact us today. Our labor and employment law specialists will review your case for free.

This blog post is based on fact sheets from the U.S. Department of Labor and is for informational purposes only.