Costco settles PAGA class action for $2.95 Million

If you worked as a non-exempt employee for Costco between April 12, 2021, and January 29, 2024, you may be eligible to claim an award from a class action settlement.

Costco Wholesale Corporation has agreed to pay $2,950,000 to settle a class action lawsuit for alleged wage and hour violations, including failure to pay all compensation owed with respect to meal or rest premiums due to payments of Hero Pay and sick leave pay due to payments of extra checks.

Who can submit a claim?

The class members eligible to submit a claim are non-exempt employees who worked for Costco during the class period from April 12, 2021, to January 29, 2024. These employees are referred to as Class Members.

Additionally, non-exempt employees who worked during this period are also considered Aggrieved Employees under the California Private Attorneys General Act (PAGA).

How much can class members get?

The settlement provides two types of payments: Individual Class Payments and Individual PAGA Payments.

The estimated Individual Class Payment and Individual PAGA Payment will vary based on several factors, including the number of days worked from April 12, 2021, to January 29, 2024.

• Individual Class Payments: calculated on a pro-rata basis by dividing the Net Settlement Amount by the total number of days worked by relevant employees and multiplying the result by the number of days you worked.
• Individual PAGA Payments: calculated by dividing 25% of the PAGA Penalty amount by the total number of days worked by relevant employees and multiplying the result by the number of days you worked.

Hypothetical calculation

If the Net Settlement Amount is $1,500,000 and the total number of days worked by all relevant employees is 100,000 days, then the pro-rata amount per day would be $15. If you worked 200 days during the class period, your Individual Class Payment would be $15 \* 200 = $3,000.

Similarly, if the PAGA Penalty amount is $295,000 and 25% of this amount is allocated to Individual PAGA Payments, then $73,750 will be divided by the total number of days worked by all relevant employees. If the total number of days worked is 100,000 days, the amount per day would be $0.7375. If you worked 200 days, your Individual PAGA Payment would be $0.7375 \* 200 = $147.50.

How to claim an award

To claim an award, you do not need to take any action if you are a Class Member. You will automatically participate in the proposed settlement and be eligible for an Individual Class Payment and Individual PAGA Payment.

How are class members paid?

Payments will be sent by U.S. mail to the address on file. If you change your address, notify the Settlement Administrator as soon as possible.

$2,950,000 Settlement Fund

The settlement fund of $2,950,000 will cover various costs and payments:

• Up to $1,032,500 for Class Counsel's attorneys' fees.
• Up to $25,000 for Class Counsel's litigation expenses.
• Up to $12,500 as a Class Representative Award.
• Up to $80,000 for the Settlement Administrator's expenses.
• Up to $295,000 for PAGA Penalties, with 75% allocated to the LWDA and 25% to Individual PAGA Payments.

Important dates

• Exclusion Deadline: September 23, 2024
• Workdays Challenge Deadline: September 23, 2024
• Final Approval Hearing: October 21, 2024

When is the Costco PAGA settlement payout date?

The awards will be paid after the final approval hearing and once the judgment is final.

Why is there a class action settlement?

The lawsuit was filed by a Costco employee, Gilberto Gonzalez, Jr., alleging that Costco failed to pay all compensation owed with respect to meal or rest premiums due to payments of Hero Pay and sick leave pay due to payments of Extra Checks. The settlement is a compromise to resolve these disputed claims without further litigation.

What happens next?

The court will hold a final approval hearing on October 21, 2024. If the settlement is approved, payments will be distributed, and Class Members will release certain claims against Costco.