$20.8 Million Kroger Settlement Reached to Resolve Unpaid Wage Lawsuit

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The Kroger Co. has agreed to pay over $20.8 million to settle a proposed class action lawsuit that alleged the grocery store chain failed to properly compensate around 47,000 employees due to payroll system glitches that began in September 2022.

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If preliminarily approved by the court, the proposed $20,875,139 settlement would compensate all non-exempt Kroger employees (excluding those in Oregon and Washington) who worked between September 1, 2022 and May 31, 2023 and experienced certain pay discrepancies caused by the system glitch.

These discrepancies include an instance of underpayment within a given pay period for hours worked or taken as paid time off (referred to as a negative variance) or an over-deduction from wages relating to benefits, court documents specify.

According to court documents, an analysis performed by accounting firm Deloitte determined that the amount of unpaid or delayed wages, benefits, paid time off and improper deductions arising from Kroger’s system issues totals over $10 million. This amount has already been repaid in full to class members, court documents say.

Per the plaintiffs’ motion for preliminary settlement approval, Kroger has agreed to pay class members an additional $5,273,920. Covered individuals will receive pro-rated payments based on their individual negative variances.

Class members who worked for Kroger in Arizona, California, Colorado, Illinois, Maine, Maryland, Massachusetts, New Jersey or Virginia will receive compensation for approximately 62 percent of their negative variances and overpayments. Class members who worked for Kroger in every other state, except for Oregon and Washington, will receive compensation for approximately 42 percent of their negative variances and overpayments.

Class members are divided into two groups “to account for differences in state wage and hour law and to reflect that some states provide for additional protections (and penalties) related to the non-payment or under-payment of wages and benefits,” the plaintiffs’ motion reads.

Covered individuals do not need to do anything to receive their portion of the Kroger settlement fund. If and when the deal receives final approval from the court, class members should automatically receive a check “as soon as possible,” court documents say.

Several lawsuits were initially filed against Kroger, the largest traditional grocer in the United States, shortly after the company transitioned to a new cloud-based payroll system, known as MyInfo/MyTime, in September 2022. According to one case, the system suffered outages and Kroger was unable to track employees’ hours through the timekeeping system to calculate pay.

As a result, the lawsuit alleged, employees did not receive all wages owed in violation of state and federal labor laws.

Did you know that some class action settlements require no proof to submit a claim? Check out the latest open class action settlements.