Centene Failed to Properly Pay Employees After Kronos Data Breach, Lawsuit Claims

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Centene Corporation faces a proposed class and collective action that alleges the healthcare company has failed to pay proper overtime wages to certain employees in the wake of a data breach that crippled a payroll vendor last December.

The 16-page case says that Centene, a managed care and healthcare corporation who serves government-sponsored and privately insured healthcare programs, has used timekeeping software and hardware maintained and operated by third-party payroll provider Kronos since at least 2021. The suit alleges that when Kronos’s system was hacked in December 2021, Centene and the timekeeping company’s other clients were thereafter unable to pay employees through the vendor’s hardware and software. 

The case claims that although Centene could have easily found a way to accurately track workers’ overtime hours in the wake of the breach and pay them accordingly, it failed to do so. Instead, Centene has either underestimated workers’ overtime hours or paid them based on hours worked during prior pay periods, the suit alleges. In either scenario, employees have not been paid for every overtime hour worked, according to the lawsuit.

The filing contends that by failing to ensure that workers were paid appropriately, Centene has shifted the costs of the Kronos data breach onto “the most economically vulnerable people in its workforce”—namely frontline workers who “rely on the full and timely paymet [sic] of their wages to make ends meet.”

“It was feasible for Centene to have its employees and managers report accurate hours so they could be paid for the work they did for the company,” the complaint charges. “But it didn’t do that.”

The plaintiff in the case is an employee who has worked for Centene since June 2013. According to the suit, ever since the Kronos ransomware attack in December 2021, the plaintiff has been paid based on previous pay periods, and in many cases has been paid less than she was owed. The lawsuit alleges that Centene is aware that it must pay workers proper overtime wages yet has refused to accurately track their hours, choosing instead to pay them based only on their scheduled hours or “simply duplicate[] paychecks from pay periods prior to the Kronos hack.”

The case characterizes Centene’s alleged failure to properly pay its workers as a “willful violation of the [Fair Labor Standards Act].”

As the suit tells it, Centene is no stranger to the FLSA’s requirements and has previously been investigated by the Department of Labor for allegedly failing to pay workers at the Arizona State Prison for time spent undergoing security screenings and other check-in procedures. Though the Department of Labor found that Centene owed its workers unpaid wages, “these wages remain unpaid,” according to the complaint.

“Centene continues to flaunt federal and state wage laws,” the lawsuit scathes.

The suit looks to cover current and former Centene employees who were paid by the hour or were non-exempt under the FLSA and worked for the company in the U.S. at any time between the onset of the Kronos ransomware attack in 2021 and the present.

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