Lawsuit Alleges National Claims Adjusters Misclassified Workers as Independent Contractors

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A proposed class and collective action alleges National Claims Adjusters has misclassified certain workers as independent contractors and denied them proper wages.

Per the lawsuit, the independent adjusting company’s workers should have been classified as bona fide employees entitled to California and federal wage protections given the individuals were not free from National’s control, performed work in the usual course of the company’s business and were not customarily engaged in an established trade, occupation or business of the same nature as the work they performed for the defendant.

Because the workers were improperly classified as independent contractors, they were denied minimum wage protections and reimbursement for business expenses such as the use of their cell phones and data plans and the costs of purchasing paper, printers, ink and other office supplies, the suit alleges.

“Defendant’s misclassification of Plaintiff and similarly situated individuals and its failure to pay all due and owing wages and provide all benefits provided under the law was a willful violation under federal and California state law,” according to the complaint.

The plaintiff says she worked for National Claims Adjusters, who hires thousands of “independent contractors” to handle hurricane, flood, hail, tornado and earthquake insurance claims throughout the U.S., from her home in San Diego County from September to October 2018. Per the suit, the plaintiff and other workers were not permitted to negotiate their pay rates and paid instead a flat rate of between $20.00 and $50.00 per claim file on a “take it or leave it” basis.

The lawsuit further alleges workers were required to operate in accordance with the defendant’s policies, deadlines and standard operating procedures. This reality, coupled with the fact that National reviewed and corrected adjusters’ work and gave instructions, indicates that the workers were subject to the company’s control in a way that more closely resembles an employer-employee relationship, the filing argues.

The plaintiff contends she was denied minimum wages in accordance with state and federal law as a result of her improper classification as an independent contractor. If the plaintiff, during an average workweek, put in 60 hours of work and incurred $70 in business expenses while being paid the maximum amount for her average of eight claims per week, her hourly wage would work out to $5.50, the lawsuit estimates, well below the federal minimum wage of $7.25 per hour and California’s state minimum wage of $11.00 per hour.

According to the suit, the plaintiff’s unreimbursed business expenses and the defendant’s pay practices have, on average, caused her to be paid less than minimum wage for her work with National. 

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