National Grid to Pay Approximately $2 Million for Failing to Timely Pay Workers During and After Hurricane Sandy
Payroll Issues Left Hundreds of Workers Uncompensated for Weeks; Global Settlement includes Penalties and Hardship Payments to Workers
BOSTON – Nearly a year after payroll issues left hundreds uncompensated for work performed in the wake of Hurricane Sandy, National Grid has agreed to pay approximately $2 million in penalties and damages to its workers to settle allegations that it violated the state’s wage and hour laws, Attorney General Martha Coakley announced today.
“These workers provided a vital service during a storm that knocked out power for thousands of families,” AG Coakley said. “Many workers went unpaid or underpaid for weeks and suffered financial hardship for months as these payroll issues were being rectified. Our focus was to secure payment for the more than two thousand workers who suffered hardship from these delayed payments, and today’s action does that. We want to thank National Grid for stepping up to the plate to take responsibility and resolve this matter.”
Under the terms of the global settlement agreement, National Grid will pay $270,000 in penalties to the Commonwealth and more than $1.5 million in damages to affected hourly employees to reflect the hardship, inconvenience and any interest that may have accrued as a result of the company’s untimely wage payment issues. This includes more than 2,000 employees who will receive lump sum payments of $750 each in damages. These payments are in addition to the full payment of wages, which National Grid rectified in early 2013.
The global settlement resolves both actions by the Attorney General’s Office and three unions, the Utility Workers Union of America (UWUA), the United Steelworkers, AFL-CIO (USW), and the International Brotherhood of Electrical Workers (IBEW). National Grid cooperated with the AG’s investigation.
In November 2012, National Grid's new pay system encountered technical difficulties that resulted in a host of pay related issues, largely in connection with compensation for work performed during and after Hurricane Sandy. Thousands of problems were identified company-wide including the failure to pay wages in a timely manner to National Grid’s employees who worked to ensure that residents of Massachusetts and neighboring states had their power restored.
Many workers suffered financial stress and hardship from not getting paid on time, sometimes for weeks. For example, multiple employees who had financial payments directly debited from their pay - including payments for child support, alimony or college tuition - received warning letters for failure to meet those obligations because of National Grid’s payroll problems.
Initially, National Grid set a self-imposed target date of December 14 to correct the pay issues. After that date had passed, AG Coakley sent a letter calling for the energy company to rectify all wage issues no later than December 21 or face further action by the AG. When the issues were not resolved, AG Coakley announced that her office would fine National Grid $270,000 for failing to pay wages on time, and reserved the right to impose additional penalties if the pay problems were not rectified in a timely manner. Despite the company’s efforts to resolve the pay system’s failures, systemic untimely wage payment and related record keeping problems persisted through January 2013.
The global settlement announced today resolves the violations associated with the AG’s investigation, as well as actions brought by the three unions. Under the agreement, National Grid may not pass on to ratepayers any of the costs associated with the settlement.
This matter was handled by Jocelyn B. Jones, Deputy Chief of AG Coakley’s Fair Labor Division. AG Coakley wants to acknowledge the Utility Workers Union of America (UWUA) and the United Steelworkers, AFL-CIO (USW) for the tremendous assistance provided throughout this complex investigation. The AG’s office also worked cooperatively with the New York Attorney General’s Office on a parallel investigation into similar issues affecting New York workers.