On February 20, 2025, Judge Jeffrey P. Hopkins of the U.S. District Court for the Southern District of Ohio entered an order preliminarily approving a $20.8 million settlement in a collective and class action lawsuit by Kroger employees who experienced wage discrepancies as a result of a faulty payroll system. The litigation involves claims from employees in Arizona, California, Colorado, Illinois, Maine, Maryland, Massachusetts, New Jersey, and Virginia who were underpaid for hours worked during September 2022 and May 2023.
In September 2022, Kroger implemented a cloud-based payroll system known as MyInfo/MyTime. Over the next several months, approximately 47,000 Kroger employees reported instances of underpayment for hours worked, issues with paid time off, and improper deductions related to benefits. In some cases, employees reported receiving paychecks weeks after they were due. Employees also claimed the new system experienced repeated outages and prevented the accurate tracking of hours, resulting in violations of state and federal labor laws. According to the complaint, Kroger knowingly and deliberately failed to compensate the employees on a “routine and regular basis” during the relevant time period.
In response to the litigation, Kroger retained Deloitte, an international accounting and professional services firm, to assist in performing an audit. Deloitte estimates the total amount of unpaid or delayed wages, benefits, PTO, and improper deductions arising from the transition to the cloud-based payroll system to exceed $10 million, which Kroger has already repaid. In addition, the settlement provides $5.27 million to class members to be distributed based upon the extent of the discrepancies experienced by the individuals. The Preliminary Approval Order indicates a Settlement Fairness Hearing is scheduled on June 24, 2025.
