?Three senators wrote to The Kroger Company Chairman and CEO Rodney McMullen on Feb. 15, accusing the company of wage theft after the installation of a new payroll system last year. We’ve gathered articles on the news from SHRM Online and other outlets.
‘Alarming New Reports’
Senators Elizabeth Warren, D-Mass., Bernie Sanders, I-Vt., and Ron Wyden, D-Ore., wrote of “alarming new reports” indicating that “systemic and widespread errors” by Kroger resulted in thousands of employees experiencing delays and missing wages in their paychecks in late 2022. “We are writing to request a full explanation of how your workers will be compensated for any lost or delayed wages, and how you will prevent future wage theft,” the senators wrote.
(Senators’ letter to Kroger’s CEO )
Class Action Lawsuits Filed
Kroger employees in five states have filed four class action lawsuits. The lawsuits alleged that technical problems caused missing or late paychecks and mistakes in hours worked, wages paid and statements of deductions and withholdings.
Kroger has responded to these cases with arguments that it acted in good faith to identify and correct payroll mistakes and that employees failed to pursue grievance, arbitration and other remedies before suing. The company also objects to the use of class actions to settle the controversy.
Since 2021, Kroger has told investors that it is in the middle of a technology transformation to achieve better efficiencies across payroll and other processes. The transformation includes streamlining different payroll systems, which can be challenging.
(WCPO 9)
Rollout of Payroll System Criticized
In mid-2022, Kroger rolled out a new system nationwide to handle its payroll and timekeeping. A class action in the mid-Atlantic claims the system has resulted in Kroger employees being denied legally earned compensation. “In really no uncertain terms, the rollout has been a bit of a disaster. There have been just a whole host of problems that have resulted from this new rollout, resulting in employees who have not been paid for all hours worked, including, some of them, going weeks without any sort of pay,” said Matthew Handley, lead attorney for the lawsuit and a lawyer with Handley Farah & Anderson in Washington, D.C. Employees say the problems have persisted. Management has attempted to correct the payment issues, but some employees claim those attempts failed.
(WTAP)
Impact on Workers
The fallout has been the most difficult for workers who live paycheck to paycheck. Some Kroger employees said they’ve missed rent payments and bills, overdrawn bank accounts or been forced to take out loans due to missing or reduced pay. Kroger has allegedly been slow to respond. “I’m tired of having to beg for pay that’s due to me,” one employee said.
“We have apologized to our associates and understand the impact,” a Kroger spokesperson told Winsight Grocery Business in mid-December. “We have resolved the vast majority of issues and are ensuring our associates are paid timely and accurately.”
Widespread Problem
Wage theft by businesses is pervasive, according to Kim Bobo, author of Wage Theft in America (The New Press, 2011). In her research, she’s found that wage theft is more common in certain industries, such as landscaping and restaurants.