Scripps Health Failed to Properly Pay Employees Following Kronos Data Breach, Lawsuit Alleges
by Erin Shaak
Franklin et al. v. Scripps Health
Filed: March 21, 2022 ◆§ 3:22-cv-00367
Scripps Health faces a class action after a data breach involving its payroll vendor allegedly caused workers to be improperly paid for their overtime hours.
Scripps Health has been hit with a proposed class action after a 2021 data breach involving the company’s payroll vendor allegedly caused workers to be improperly paid for their overtime hours.
The 18-page lawsuit alleges Scripps, a San-Diego based healthcare organization with roughly 15,000 employees, could have easily implemented a system to accurately record workers’ hours after the Kronos data breach crippled its payroll platform in December 2021. Instead, the suit claims, Scripps violated federal and California labor laws by failing to properly track its non-exempt workers’ overtime hours and pay them time-and-a-half wages for all weekly hours worked in excess of 40.
The case claims Scripps’ failure to properly pay employees has allowed the defendant to shift the cost of the Kronos data breach onto the shoulders of “the most economically vulnerable people in its workforce.”
“Scripps made the economic burden of the Kronos hack fall on front-line workers—average Americans—who rely on the full and timely paymet [sic] of their wages to make ends meet,” the complaint attests, claiming the defendant has run afoul of the federal Fair Labor Standards Act (FLSA) and California Labor Code.
The lawsuit alleges that Scripps has, since at least 2021, used timekeeping software and hardware maintained by third-party payroll vendor Kronos. Per the case, Kronos experienced a ransomware attack on December 11, 2021 that rendered the company’s payroll system unusable by its customers, including Scripps.
In the wake of the breach, Scripps has failed to keep accurate records of employees’ hours worked and instead has used several methods to estimate how much each worker should be paid, according to the complaint. For example, the suit says, Scripps has issued paychecks based only on employees’ scheduled hours or “simply duplicated paychecks” from pay periods before the data breach. As a result, non-exempt workers who put in overtime hours have often been underpaid, and those who did receive overtime pay received less than the full time-and-a-half overtime premium, according to the suit.
The two plaintiffs, who are both Scripps employees, claim the overtime rate at which they were paid fell below the required rate of one-and-a-half to two times their regular pay rate, which should have included shift differentials and non-discretionary bonuses.
Although it was “feasible” for Scripps to have its employees and managers keep accurate track of workers’ hours so they could be paid correctly, the company “didn’t do that” and instead “kept the money it owed to those employees in its own pockets,” the lawsuit summarizes.
The case looks to represent current or former hourly and salaried Scripps employees who were non-exempt under the FLSA and worked for the company in the U.S. anytime since the onset of the Kronos ransomware attack on or around December 11, 2021 to the present.
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