Target has agreed to pay $4.6 million to resolve a wage-and-hour class action lawsuit brought by current and former hourly workers at several of its distribution centers in New Jersey. The settlement comes after claims that the company failed to pay employees for all time worked, including time spent on mandatory pre- and post-shift activities such as walking long distances to and from work stations and security checkpoints.
Under the proposed agreement, thousands of eligible employees will receive automatic settlement checks based on their payroll records during the class period. Target has denied any wrongdoing, but the company agreed to the settlement to resolve the dispute and avoid protracted litigation.
“This settlement reflects recognition that all time employees are required to be on the job should be compensated,” said a plaintiff’s representative in court filings. “Workers deserve fair pay for every minute they spend performing job-related duties.”
Also Read
LinkedIn Secrets for Jobseekers: What Works in 2026?
What the Lawsuit Alleged?
The lawsuit, filed in 2022 under the title Sadler v. Target Corp., represented hourly, non-exempt workers at Target’s New Jersey distribution centers in Burlington, Perth Amboy, and Logan Township. Class members contended that they were not paid for time spent:
- Walking from the facility entrance to their workstations before their official start time,
- Completing mandatory pre-shift security screenings,
- Walking back to the exit and undergoing post-shift security checks after clocking out.
The plaintiffs argued that under New Jersey wage-and-hour law, this time was “hours worked” and should have been compensated at the appropriate wage or overtime rate. Target denied these allegations but chose to settle.
Settlement Details
| Settlement Feature | Details |
|---|---|
| Total Settlement Amount | $4,600,000 |
| Distribution to Workers | Checks sent automatically unless a worker opts out |
| Number of Eligible Workers | ~13,700 current and former employees |
| Period Covered | Workers employed since August 6, 2019 |
| Tax Treatment | Payments may include wage and non-wage portions with appropriate tax forms issued |
| Court Approval | Final fairness hearing scheduled February 24, 2026 |
| Attorney Fees Portion | ~$1.53 million (estimated) |
| Lead Plaintiff Award | ~$10,000 (estimated) |
| Settlement allocations based on filings in Sourcing Journal and settlement notices |
Employees typically do not need to take any action to receive their payment; they will receive checks automatically once the court gives final approval and the settlement administrator processes the distribution.
Who Qualifies for a Payment?
Workers who were hourly and non-exempt at Target’s New Jersey distribution centers during the class period, August 6, 2019, through the date of final approval, are eligible. Payments will be pro-rata, meaning the amount each worker receives depends on how much time they worked during the period covered by the settlement.
Eligible workers do not need to file a claim to receive payment, but individuals had the option to opt out of the class before the deadline if they wished to pursue their own legal action.
Why the Case Matters?
Wage-and-hour lawsuits like this one center on whether unpaid time, including walking, security checks, or other preliminary activities, should count toward compensable time under state law. While federal law under the Fair Labor Standards Act (FLSA) offers one standard, many states like New Jersey have broader definitions of what constitutes “hours worked,” potentially giving employees greater protection.
“The core issue is whether employees are controlled by the company during activities like walking to their workstations or undergoing security screenings,” said employment law expert Dr. Lila Moreno. “Settlements like this show how significant those ‘off-the-clock’ minutes can be to workers’ pay.”
Reaction From Employees and Advocates
Employees and worker advocates have welcomed the settlement as recognition of the value of covered time. Many distribution center workers walk significant distances, sometimes several minutes in each direction, to reach operational areas before and after shifts. Advocates argue that these often-overlooked activities should count as compensable work time.
Some labor attorneys also view this case as part of a broader trend, where employers are being held accountable for wage practices that rarely show up on timecards but are integral to employees’ duties.
Next Steps and Timeline
- February 24, 2026: The federal court in New Jersey will hold a final fairness hearing to determine whether the settlement is fair, adequate, and reasonable.
- Post-Approval: Automatic settlement checks will be mailed to eligible employees; payments will include appropriate tax documents (e.g., W-2 or 1099).
- Opt-Out Window: Workers who chose to exclude themselves from the class had a window before February 13, 2026.
Final Thoughts
Target’s $4.6 million settlement marks a significant resolution in a wage-and-hour class action lawsuit brought on behalf of thousands of distribution center employees. By agreeing to distribute checks automatically to eligible workers, many of whom were unpaid for what they argued was compensable work time, the retailer has chosen a pragmatic end to a dispute over wage practices that could have resulted in protracted litigation. As settlement funds are distributed in early 2026, many eligible workers will receive fair compensation for time they previously weren’t paid for, making this one of the more notable labor settlements of the year.
Frequently Asked Questions
Why is Target paying $4.6 million?
Target agreed to the settlement to resolve claims it didn’t pay certain employees for all time worked, including pre- and post-shift walking and security screening time.
Do eligible employees need to apply to get paid?
No, eligible workers will receive settlement checks automatically unless they opted out of the class.
When will workers receive their checks?
Distribution is expected after the court’s final approval hearing in late February 2026.
Will the settlement be taxed?
Yes, part of the payment may be reported as wages (with a W-2) and part as non-wage compensation (with a 1099), depending on IRS rules.
Does this mean Target admitted it broke the law?
No. Target has denied wrongdoing but agreed to settle the case to avoid continued litigation.
