Virginia, West Va. Kroger employees allege computer-generated wage theft

Kroger employees in Virginia and West Virginia are pursuing a class-action suit against the grocery giant, alleging that bugs in the company’s new payroll software system cheat them out of their rightful wages.

The class-action lawsuit filed in Richmond in January is one of four filed by employees in five states against the country’s largest supermarket chain. Allegations include nonpayment for overtime or vacation time and unauthorized deductions from paychecks.

The new payroll system, called My Time, has not been accurate since it was introduced last spring, said Horace Campfield, a Richmond Kroger employee who has worked for the company for more than 17 years. “They try to tell you to set it up through your cell phone. They put a bulletin out to tell us to make sure our time is right. We did our job. We clocked in. How are you making it our responsibility? It’s unfair to make it seem it like it’s on us.”

Wage theft occurs when employers do not pay workers according to the law. The Kroger case falls in that category but is a little different.

“Most cases we encounter are not due to some computer error. This is a bit unique,” said Matthew Handley, an attorney for United Food and Commercial Workers International Unit Local 400 workers in Virginia and West Virginia. He is a partner at Handley Farah & Anderson, based in Washington, D.C.

Payroll errors are common enough, Handley said, but in the Kroger suit, “it’s the scope and duration that is remarkable. The rollout of the new payroll system has really been an unmitigated disaster. People have not been paid for weeks at a time or had things double deducted. … It’s not only that wages aren’t going to workers, but that Kroger is effectively keeping them.”

Jonathan Williams, a spokesperson for UFCW Local 400, said when the union first responded to reports of payroll issues, “we understood this to be a small local problem, a glitch or two here and there” but quickly realized the problem was nationwide.

“People were missing paychecks or they were having taxes deducted from locations they didn’t live in. It was not even consistent within one store,” according to Williams.

The company has not been helpful, he said. “We would not be filing if they were addressing the problem.”

Kroger, which also owns Fred Meyer, Ralphs and other grocery chains, did not respond to a request for a statement.

In wage theft lawsuits, “the important part is the penalties,” Handley said. “Virginia was slow coming to the table compared to D.C. and Maryland, but it has in recent years given a bit more teeth to the wage theft laws over and above what federal law requires.”

Under federal law, the penalty for wage theft is “two times what you were underpaid,” said Handley.  In Maryland the penalty is three times the pay due to the employee, and in the District of Columbia the penalty is four times. A few states have also begun treating wage theft as a criminal, not civil, violation, making jail time a possibility.

Prior to 2020, Virginia law didn’t allow employees who thought they had been subject to wage theft to sue their employers over the dispute. Instead, they had to file an administrative claim with the Virginia Department of Labor and Industry (DOLI).

That year, legislation known as the Wage Theft Law created a private right of action for employees to sue their employers. Under that law, employees who can show a violation was egregious can get up to three times their pay.

Another recent change in Virginia law that is pertinent to the Kroger lawsuit came in 2019, when an amendment to the Virginia Payment of Wage Law began requiring employers to provide employees with written statements of their pay, either by paystub or through online accounting.

The new paystubs issued by Kroger “are complicated documents,” according to Handley. But, he added, at least employees in Virginia now must receive them.

Williams said that when it comes to the Kroger paystubs, “even attorneys had trouble making heads or tails of them. There are terms that appear on the paystub that are never mentioned in the bargaining agreement. It’s not always clear what the rate is being based on, based on federal law.”

Campfield agreed the paystubs are confusing.

“It’s a mess to me,” he said. “I went on vacation for Thanksgiving, and after I got back I had not received my check. It took three weeks.”

He said he’s heard a number of similar complaints from coworkers. “We recently had a guy who went about five weeks before he got his pay right,” Campfield said. It’s a particular problem because “some people are living check to check.”

Wage theft in general is a commonplace problem. The Economic Policy Institute estimates that it costs U.S. workers as much as $50 billion per year.

Handley said it is particularly rampant in the construction industry, where workers are often employed by contractors and “members of immigrant communit[ies] are vulnerable and easily exploited.”

According to Williams, “there are ways big and small” to cheat people out of their pay, such as not paying for holidays, vacation days or break times or not paying overtime when it is required. “Every minute you work for an employer you should be paid for.”

“Our members have a union and a grievance system and can recover back pay,” he said. “For non-union workers, it may go unnoticed and there’s no clear channel to address it.”

In Virginia, the Virginia Interfaith Center for Public Policy and Virginia Employment Lawyers Association operate a hotline at 804-821-1768 that workers can call if they believe their employer is engaging in wage theft.

The calls to the hotline come from “construction workers, people incorrectly classified as independent contractors, home health workers or caretakers of the elderly or children,” said Sheila Herlihy Hennessee, an organizer for the interfaith center. “Wage theft hits low-wage workers more than higher-wage workers. It’s people who are just trying to make ends meet.”

Workers can submit a complaint to the hotline and someone at the center can draft a letter to try to address the issue, she said. If that doesn’t work, the groups can put the employee in touch with an attorney.

“Once in a while we find people of good will who didn’t know they were committing wage theft and we have a lovely conversation,” she said. “More often they won’t respond to the letter.”

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This article first appeared on Virginia Mercury and is republished here with permission. Virginia Mercury is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence.