UMass Memorial to Pay $1.2M to Settle Wage Claims After Ransomware Attack

A ransomware attack took down the provider’s payroll system for weeks, and some employees allege they weren’t paid the full amount owed.

UMass Memorial to Pay $1.2M to Settle Wage Claims After Ransomware Attack

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WORCESTER, Mass. — UMass Memorial Health, one of the largest health systems in Massachusetts, has agreed to pay $1.2 million to settle wage claims after a ransomware attack took down the provider’s payroll system.

On Dec. 11, 2021, UKG, the parent company of workforce management platform Kronos, notified clients using its Kronos Private Cloud product of a ransomware incident that caused weekslong outages affecting timekeeping and payroll across several industries, reports HR Dive. For more than a month, the UMass Memorial relied on backup timekeeping methods for its more than 16,000 employees. It resumed using the Kronos platform on Jan. 27.

Sergio Melgar, executive vice president and chief financial officer of UMass Memorial, told HR Dive that the organization ran its first payroll during the outage based on hours-worked for the last pay period on record, making adjustments for new hires and departures. However, Melgar said vacation time, leave, and shift differentials posed issues. He said UMass Health chose the best option available “given the difficult situation we were in” and described healthcare payroll as “maybe the most complicated payroll that exists.”

“In a complex environment like ours, people could have shift differentials,” said Melgar. “You have overtime that kicks in at different points in time. You could have a bonus for shifts. You could have all the different variables that affect the pay that somebody gets. And if you don’t have the data, you cannot calculate it.”

On May 12, employees filed a class action lawsuit against UMass Memorial, Kronos, and UKG, alleging they weren’t paid the full amount due in a timely manner which is required under the Fair Labor Standards Act (FLSA). UMass Memorial agreed to pay $1.2 million but has denied wrongdoing, claiming it paid employees correctly.

The plaintiff’s attorney said they plan to request $8,500 in incentive awards for each plaintiff, and up to $400,000 in attorneys’ fees. Individual workers are expected to receive an average of $245 each.

UKG entered into a separate agreement last month but details were not made public.

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