Target Agrees to $4.6M Wage Claim Settlement Over Off-the-Clock Time

This wage claim shows how everyday workplace routines like security checks can turn into multimillion-dollar liabilities.

Retail giant Target has agreed to pay $4.6 million to settle charges that it violated New Jersey law by failing to pay warehouse workers for time spent undergoing security screenings and walking across a warehouse floor to and from work stations.

The case reminds HR pros that state laws can provide greater protections – sometimes much greater protections – for employees than federal law offers. Let’s dig in.

Workers Want Payment for Screenings, Walking Time

This suit was filed in a New Jersey state court in late November 2022.

Krystal Sadler worked at one of three New Jersey Target warehouses for a little more than two months between September and November of 2022.

Sadler, who sued on behalf of herself and other Target warehouse workers, said that she and other workers like her were subjected to mandatory pre-shift security screenings when they first arrived at the warehouse. They would then walk “long distances” to their assigned work locations – and it was not until then that they clocked in, the suit explained.

The suit further alleged that the warehouse workers were forced to clock out before making the trek back across the warehouse for a required post-shift security screening.

All of that walking and screening time should have been counted as paid time, the suit claimed.

Settlement of Wage Claims Follows Discovery

Target moved the case to a New Jersey federal court, and the two sides engaged in extensive discovery. In late June of this year, the parties sat down with a magistrate judge and reached a class-wide settlement of the dispute.

To end the case, Target agreed to pay a total of $4.6 million. Of that, about $2.75 million will go to a “net settlement fund” to be distributed among eligible class members. About $1.53 will go toward attorneys’ fees, and $10,000 is allocated directly for Sadler.

Target did not admit to any wrongdoing in resolving the litigation.

What Time Must Be Paid?

Under federal law, the time that workers spend performing preliminary and postliminary activities generally is not paid time. The federal Department of Labor has advised that time spent walking to where one’s work is done is not paid time – unless a contract calls for payment or the time is treated as hours worked based on a custom or practice.

A relevant federal regulation confirms the understanding that under federal law, time spent performing preliminary and postliminary activities generally is not compensable time.

This understanding is further bolstered by a 2014 U.S. Supreme Court ruling establishing that time spent undergoing a security screening is not compensable time under the federal Fair Labor Standards Act.

HR pros need to remember that despite the federal rule, state wage and hour laws may differ – and provide greater protections for employees.

Remember: Federal laws set a floor of protection. States may not do less, but they are free to do more.

State Law Bolsters Wage Claim Lawsuit

In this case, the plaintiffs relied in large part on a New Jersey law that specifically says “hours worked” includes all time that employers require workers to “be at his or her place of work.” They also pointed to earlier cases in which courts held that mandatory screening time as well as time spent walking from time clocks to work stations is compensable time.

Remember: When determining whether time spent performing preliminary and postliminary activities should be paid, it’s critical to look not only at federal law but applicable state law as well.

Sadler v. Target Corp., No. 23:cv00030 (D.N.J. unopposed motion for preliminary approval of settlement filed 10/24/25).