In a case that was followed with interest by those in the field of employment law, as well as many employees working in large university systems throughout the country who hold non-academic positions, the University of California (UC) reached a settlement this past May with the U.S. Department of Labor to the tune of $1.3 million for back wages and damages owed to underpaid employees. 

Payroll errors to blame for unpaid wages

This settlement is the denouement of a story that began back in December 2015, when the university requested an investigation by the U.S. Department of Labor to help them determine the extent of an error that occurred during the uneven transition from their old payroll system to a new one in 2014. This transition led to incompatibilities between the methods used to track the regular hours and overtime worked by employees between the 10 different campuses that make up the university system as a whole, which UC believes was the initial cause of an ensuing cycle of repeated errors that eventually resulted in a significant sum of unpaid wages between 2014 and 2016. 

How small errors added up to a $1.3 million settlement

The investigation into errors in the payroll system found that more than 13,700 non-academic status, hourly employees of the University of California were being affected by the faulty system, which occurred in the form of small increments (less than $5 per check) of earned wages missing from each paycheck received by those employees. The average amount of unpaid wages per employee was estimated by Claire Doan, a spokesperson for the University of California, to be around $55 total.

The settlement was intended to cover the lost wages from 2014 to 2016, which was broken down to approximately $746,000 for back wages and $616,000 for damages. This will average out to a repayment of almost $100 for each employee who was underpaid by a total of at least $20 throughout the recognized period of payroll errors.  Repayments are expected to begin in September.

Repayment plan faces further criticism

While this settlement is clearly a step in the right direction toward compensating the underpaid employees of the University of California, there are still many outspoken critics of the repayment plan who feel that this settlement continues to fall short of what would be considered a full repayment of wages owed to all of the hourly employees who were affected by the payroll errors.  AFSCME Local 3299, which is the largest employee union at the University of California, represented around 24,000 of the hourly employees who were affected by the payroll errors and while their immediate response to the news of settlement was in praise of the UC, they did express disappointment that the settlement would not be covering the almost $100,000 in additional back wages that were unpaid to employees who were owed any sum less than $20. 

While this case may not have resolved to the satisfaction of every person involved, it still stands as a positive example of very large institution attempting to compensate a very large group of individuals who deserve it. It is crucial in cases like these that the employees who are facing any unfairness in rightful wages or compensation stand together and seek representation that understands what they are up against and has the experience and resources to assist them. If you feel that you or your co-workers are not receiving the wages that you have rightfully earned in your place of employment, we invite you to contact our offices today to discuss the legal options available to you.