GEICO to Pay $6 Million to Settle Auto Adjusters’ Claims of Unpaid Overtime Hours

Insurer GEICO has agreed to pay $6 million to settle claims by auto damage claims adjusters who allege the insurer failed to pay them for all hours they worked “off-the-clock.”

The settlement affects 806 adjusters countrywide who worked for GEICO from 2020 to 2023. Each will receive an average net payment of $4819.17, after attorneys’ fees, administrative costs and other deductions.

The settlement addresses two similar cases brought in federal district courts in New York and Maryland. The settlement has been approved in Maryland court; approval is pending in the New court. The cases allege GEICO violated the Fair Labor Standards Act (FSLA) and various state laws. Among other rights, the FSLA promises requires employers pay “time-and-a-half” overtime pay when they work more than 40 hours a week.

The adjusters in both cases assert that adjusters are typically scheduled to work 7.75 hours per day, five days per week, for a total of approximately 38.75 hours per week. However, they say GEICO “regularly required adjusters to work additional hours” beyond this scheduled time while off the-clock in order to satisfy the insurer’s claims productivity, customer service, and other metrics.

The plaintiffs allege that they were not permitted to record overtime and that doing so would negatively impact their scores on GEICO’s performance metrics. They said supervisors discouraged overtime to save on labor expenses and often issued blanket prohibitions that barred any overtime at all. They maintain that GEICO knew or should have known that such unpaid work was occurring.

GEICO has denied liability, arguing that adjusters were responsible for submitting their hours worked and verifying the accuracy of all hours including any overtime and that they were paid for all hours submitted. If the adjusters worked extra hours without GEICO’s knowledge, it had no way of discerning the unpaid time, the insurer argued.

GEICO also disputed the appropriateness of collective treatment of all of the adjusters in the class actions, contending that the collective covers adjusters that work in disparate settings.

GEICO is also in the process of settling a separate case in federal court New Jersey for $1.9 million over its alleged failure to pay claimants transfer fees on total loss claims. The state of New Jersey imposes a number of regulatory fees associated with the titling or registration of a vehicle. The title transfer fee is $60.00 and the registration transfer fee is $4.50.

Topics Auto Claims