Last Updated on September 24, 2026 by MyHRConcierge

Wage and hour compliance can become complicated quickly when timekeeping, overtime calculations, meal and rest periods, wage statements and expense reimbursement intersect. A proposed $12.47 million settlement involving Trader Joe’s highlights how multiple wage and hour issues can create significant legal and financial exposure for employers.

Trader Joe’s has agreed to a $12.47 million settlement to resolve coordinated class action and Private Attorneys General Act (PAGA) claims alleging violations of California wage and hour laws. The settlement covers certain non-exempt California employees, including Crew Members, Merchants and Mates, who worked for Trader Joe’s during specified periods beginning in December 2016.

Trader Joe’s denies the allegations and has agreed to the settlement to resolve the litigation rather than continue incurring the costs and risks associated with further proceedings. The settlement received preliminary approval in March 2026, but final approval has not yet been granted. A final approval hearing is currently scheduled for April 22, 2027.

The MyHRBuzz Podcast- Every Minute Counts: Understanding Time Rounding & Compensable Time

Time rounding can seem like a simple payroll practice, but improper application can create significant wage and hour compliance risks. In this episode of the MyHRBuzz Podcast, Chris Cooley and Emily Frederick, SHRM-CP, discuss time rounding and compensable time under the Fair Labor Standards Act (FLSA), including what employers should consider when tracking hours worked, handling meal breaks, training, travel time and commuting. The episode offers practical guidance for employers looking to strengthen timekeeping practices and ensure employees are properly paid for all time worked.

What Did the Lawsuit Allege?

Bartlett, et al. v. Trader Joe’s Company and Silicani v. Trader Joe’s company involved several alleged wage and hour violations under California law. Among the claims were allegations that Trader Joe’s used timekeeping practices that rounded employee time punches in a manner that resulted in employees not receiving all wages owed.

The complaints also alleged that Trader Joe’s failed to include certain “Thank You” pay when calculating overtime compensation. This is an important wage calculation issue because employers generally must determine whether additional forms of compensation are required to be included when calculating an employee’s regular rate of pay for overtime purposes.

The litigation further alleged failures involving meal and rest periods, minimum and overtime wages, sick pay, wage statements, business expense reimbursement and the timely payment of wages during employment and at termination.

The settlement is designed to resolve these claims without requiring the parties to continue litigating each issue through trial and appeal. It should not be interpreted as a finding that Trader Joe’s committed the alleged violations.

Timekeeping and Rounding Can Create Wage Risk

One of the key allegations involves the rounding of employee time punches. Timekeeping systems can be convenient for employers, but they also need to accurately capture compensable time.

Employers that use rounding practices should periodically review whether those practices are actually neutral over time and whether employees are consistently receiving compensation for all time worked. Technology and automated payroll systems do not eliminate the employer’s responsibility to ensure that the underlying practices comply with applicable wage and hour requirements.

A review should also consider whether employees are performing work before clocking in, after clocking out or during unpaid meal periods. Small amounts of uncompensated time can become significant when multiplied across a large workforce and an extended period.

Overtime Calculations Require More Than an Hourly Rate

Another significant issue in the Trader Joe’s litigation involves the treatment of “Thank You” pay when calculating overtime.

Overtime calculations can become more complicated when employees receive compensation beyond their regular hourly wages. Employers should evaluate bonuses, incentives, premiums and other forms of compensation to determine whether they must be included in the employee’s regular rate of pay for overtime purposes.

Payroll teams should not assume that a payment can be excluded from overtime calculations simply because it is not part of an employee’s standard hourly wage. Compensation structures should be reviewed regularly, particularly when new bonuses or incentive programs are introduced.

Meal and Rest Period Compliance Remains Important

California employers face specific requirements regarding employee meal and rest periods, making break compliance another significant area of wage and hour risk.

Employers should have clear policies explaining when employees are entitled to breaks and how those breaks should be recorded. Managers should also understand that simply having a written policy is not enough if employees are routinely unable to take compliant breaks because of staffing levels, workload or operational practices. Regular audits can help identify patterns before they develop into broader compliance problems.

Wage Statements and Expense Reimbursement Matter, Too

The allegations in the Trader Joe’s litigation extend beyond wages and breaks. The lawsuit also raised issues involving inaccurate wage statements and reimbursement of business expenses.

California employers should periodically review wage statements to ensure required information is accurate and complete. Payroll audits should also address whether employees are being properly reimbursed for eligible business expenses incurred while performing their jobs.

These requirements can be overlooked when employers focus primarily on hourly rates and overtime. However, wage and hour compliance encompasses much more than simply paying an employee the correct base wage.

Final Pay Requires Careful Attention

The litigation also included allegations involving the timing of wage payments during employment and at termination.

Final-pay requirements can vary based on the circumstances of an employee’s separation and the applicable state law. Employers should have established procedures for processing final wages accurately and on time, particularly when an employee has accrued wages, commissions, bonuses, expense reimbursements or other compensation that must be addressed. A standardized final-pay checklist can help payroll and HR teams reduce the risk of overlooking required payments.

A Reminder for Employers

The proposed $12.47 million Trader Joe’s settlement underscores how wage and hour exposure can arise from several interconnected payroll and employment practices. Timekeeping, overtime, breaks, wage statements, expense reimbursement and final pay should each be part of an employer’s broader compliance strategy.

While the settlement does not establish that Trader Joe’s violated California law, the allegations provide a useful reminder for employers to regularly evaluate their own practices and identify potential compliance gaps before they result in costly litigation.

For more information on how to enhance your organization’s compliance efforts, contact MyHRConcierge at 855-538-6947, sales@myhrconcierge.com. Or, schedule a convenient consultation below.