The University of California has reached a $1.3 million settlement with the U.S. Department of Labor over a payroll issue that resulted in thousands of non-academic employees being routinely underpaid by small dollar amounts on each paycheck.
UC asked the labor department to investigate in December 2015, after uncovering the problem during the switch to its troubled new payroll system. Incompatible timekeeping methods across its 10 campuses, the university said, led to regular failures in calculating overtime pay for hourly workers.
The agreement, reached in May, covers operations from 2014 through 2016. More than 13,700 current and former employees who were underpaid by at least $20 will receive a total of about $746,000 in back wages and $616,000 in damages, an average of just under $100 per person. The repayments will begin next month.
“UC is moving toward fully implementing UCPath, a single payroll system for all UC employees, which deploys software that calculates pay in accordance with federal standards and minimizes the risk of these issues occurring in the future,” the university wrote in an FAQ for employees. “UCPath will replace the current payroll system in which the miscalculations occurred.”
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Under the terms of the agreement, UC will make a tiny adjustment to its overtime rate until it finishes the payroll transition. It will also not seek to claw back any money from an unspecified number of workers who were slightly overpaid during the same period. The university said it did not quantify the total amount that was overpaid, but it did account for the overpayments when calculating how much individual employees were owed.
UC’s largest employee union, AFSCME Local 3299, which represents about 24,000 custodians, cooks, technicians and other laborers, praised the settlement for making workers “whole.” But it criticized the university for leaving out of the deal nearly $100,000 in back wages for employees who were owed less than $20.
“Working people living check to check have been waiting nearly three years for UC to pay back these stolen overtime wages,” Kathryn Lybarger, the union’s president, said in a statement. “The University has deep pockets when it comes to bloated executive bureaucracy, but suddenly has tight pockets when it comes to paying front-line workers the wages they’ve earned.”