A Massachusetts waste disposal company must pay $6.5 million in a class-action settlement over illegal health care deductions taken out of truck drivers’ paychecks, according to preliminary approval of the agreement granted Friday by a Suffolk Superior Court judge.
Allied Waste Services of Massachusetts has agreed to pay 450 garbage and recycling workers back wages and damages for improperly calculating health care costs between 2008 and 2015, said lawyers representing the employees.
For several dozen of those workers, the per-person payout could total $10,000 or more, with a handful entitled to more than $100,000.
Allied Waste Services, a subsidiary of Phoenix-based Republic Services Inc., has contracts with cities across Massachusetts and major dispatch centers in Revere, Tyngsborough, Fall River, and Plymouth.
According to the plaintiffs’ lawyers, Allied violated Massachusetts wage laws by coming up with a flat companywide average — roughly $4.75 for each hour worked — to determine how much money to take out of each employee’s check for health care.
Allied deducted that amount regardless of which health care plan an employee was enrolled in or how many hours an employee worked, thereby charging single people the same rate as those on family plans and charging those who worked overtime hours more than those who did not.
More than 60 employees were not covered by an Allied health plan but were still charged $4.75 per hour worked.
“In actuality, it wasn’t right for anybody,” said Jonathon Friedmann, one of the Boston lawyers representing the workers. “Some people were underpaying, and some were overpaying.”
Republic Services, the parent company, said the improper deductions were the result of an unclear law.
“Because the law governing wage calculations is vague, particularly with respect to benefits calculations, we performed the calculations according to our best understanding of the law and the available agency guidance,” the company said in a statement. “We are happy to make this right with our valued employees and to put this matter behind all of us.”
The lead plaintiff, Robert Swiderski, a truck driver from Hooksett, N.H., has never been enrolled in an Allied health insurance plan in his 16 years with the company. Yet since at least 2008, more than $200 a week had been taken out of his check for health care coverage. Swiderski, 39, would not say how much settlement money he was getting, but he said he knew exactly how he would use the tens of thousands of dollars he will receive.
“I’m going to use a portion of that money to put away for my son so he has better choices, as far as he can go to school, and I’m going to be able to help him out,” Swiderski said.
“It’s like hitting the lottery ticket. It really is.”
Of the 61 workers who were charged for health care even if they weren’t covered by a company plan, two-thirds will get $10,000 or more, and at least five are entitled to more than $100,000.
“For these laborers, this is very life-changing,” Friedmann said.