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| | Intercare Offers Adjusters $500 To Opt-Out Of Class Action
By Jorge Alexandria - February 21, 2013
Over the past decade, the issue of adjuster overtime pay has refused to die. This is in part because the courts have muddied the legal waters and the Supreme Court of California has refused to address the issue as a whole, opting instead to bifurcate the matter on the so called “administrative/production worker dichotomy” and remanded the issue back to the district courts; albeit with new guidance so that the courts can adjudicate the matter.
The result is a lot of uncertainty. As a consequence some insurance carriers and third party administrators continue to misclassify the status of their adjusters as “exempt” from overtime pay. “Misclassification” in this sense is a poorly chosen word to describe what some see as the fraudulent conduct by their employer to avoid the payment of overtime. Why would any employer do that? At the end of the year their workers are sent W-2 tax forms that report the wages paid, but the employer doesn’t pay time and a half for overtime hours worked.
In the current, and most recent, class action lawsuit against third-party-administrator Intercare Holdings it is alleged that Intercare required its employees to work off the clock either by asking them to clock out yet remain at the task at hand, or by giving them so much to do that they had to work during lunch, rest breaks, and/or take their work home with them (with Citrix computer access provided by Intercare). Intercare even sent out office-wide emails advising its Pasadena adjusters whether the computer system would be operational on the weekends so its adjusters could rack up even more uncompensated overtime hours.
Southern California probably has more lawyers than any other major metro area, but it’s just Intercare’s misfortune that the firm representing the class is a bevy of experienced class action attorneys who have recovered very large amounts of money for class members and have gotten a reputation as an over-the-top operation. The law firm of Charles T. Matthews is a shark and based on past judgments on the cases they have won against heavy power players, they do not seem a bit threatened by the money power on the other side.
To say that this offer is lowball is no exaggeration. Most likely, Intercare feels it is going to be liable in the class action lawsuit for something, and it is just a matter of how much money it will be liable for. Also, Intercare knows that continuing with this litigation will cost more in attorneys’ fees than its offer to its adjusters. So it is easy to see why it is trying to settle with its adjusters for pennies on the dollar.
Assuming Intercare had employed 1,000 current and former claims adjusters since August 2008, paying each of them $500 only amounts to $500,000, which is chump change compared to what other companies paid to their claims adjusters through class action lawsuits for overtime and meal and rest breaks. So it seems Intercare does not value its employees enough to compensate them for all of the overtime hours they work because it’s offering only about 10 hours of overtime pay which does not begin to account for all of the meal and rest breaks to which adjusters are entitled.
It is screwing them just like it has been doing for years. Compare that to a company like York Risk Services which monitors and discourages its adjusters from working more than eight hour days and goes to great lengths to make its employees happy (which in turn aids and abets production), reflecting on the great and dedicated work they do.
While I am not the betting type, I am willing to bet that there is sagging morale at Intercare in part because of this and the other lawsuits against it. I suspect work has slowed or come to a near standstill. The adjusters at Intercare are unhappy. Sufficient numbers of them have revealed this to me. Can we blame them? It’s difficult to function with this level of rebellion. Could they be more motivated and productive? A good guess would be yes!
Consider that Mr. Avriett is in a position to balance the workload so that recurring overtime would not be required. Instead he opts to throw an inadequate dollar amount, a pittance really, to settle
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What claims adjusters do, and how they do it, has more impact on the success or failure of an insurance carrier or TPA than anything else. |
the matter for no valid reason other than the unequal bargaining power that permits an employer to impose this. I give him credit for trying to do the right thing, but he is not doing the right thing and has missed the big picture.
Intercare cannot keep its pool of adjuster talent if it continues to treat that talent as second class citizens. What claims adjusters do, and how they do it, has more impact on the success or failure of an insurance carrier or TPA than anything else. It behooves an insurance carrier and TPA to treat them like family or they will move their experience to a different employer, usually the competition.
Handling claim files, especially in light of California’s new SB 863 legal requirement, just got more complex. There is absolutely no way that a single adjuster acting alone, with an average case load of 200, can achieve what is required in order to comply with all the administrative complexities. I mean they probably could if they were to spend at least 30 minutes on each file-- a luxury one can’t afford in a world without overtime, as minutes are precious in an 8 hour day. But my advice for any adjuster is to do the visible, important tasks, and for those with claim assistants, take work off your desk and place it on your assistant.
I am 20% kidding and 80% not as at least the claims assistants get to claim overtime. Now claims assistants are not claims adjusters and there are risks to shoulder on this approach, (i.e. errors on benefit rates, notices or overpayments made) but John D. Rockefeller Sr. used to advise his employees to hire assistants to do their jobs and then to put their feet up on their desks and think of new ways to make more money for the company.
Coming soon: an article on the important job of claims assistant.
Jorge Alexandría is a U.S. Army veteran who received his B.A. in Political Science from Cal State Los Angeles, and graduated from Cal Poly Pomona with a Master’s in Public Administration. He holds both a California Workers Compensation Claims Professional (WCCP) designation and the State of California’s Self-Insured Administrator’s License. With more than 20 years industry experience, including various leadership positions, he is a leading expert in the field of risk management. He currently practices federal workers’ compensation of maritime interest. He can be reached at Riskletter@mail.com. The views and knowledge expressed in this article are Jorge Alexandría’s alone.
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