Vedachalam v. Tata: $30 Million Wage-and-Hour Settlement Announced

Tata Consultancy Services — an India-based software company that bills itself as providing clients with technology-based solutions — has agreed to pay $30 million to resolve classwide claims growing out of allegations that the company required employees to sign tax refund checks over to Tata. See Motion for Preliminary Approval, Vedachalam v. Tata Consultancy Servs., Ltd., No. 06-0963 (N.D. Cal. Feb. 21, 2013). The settlement must be approved by the Northern District of California federal district court in which the action has been pending.

The plaintiffs allege that, in addition to reneging on salaries promised as inducements to workers to relocate to the US, Tata (one of India’s largest software concerns) required non-US-citizen employees to both delegate the calculation of their taxes to an outside agency chosen by Tata and to send their refund checks to Tata.

The settlement comprises 12,800 class members who will receive an average payment of $1,600 each, while a standard one-third of the settlement was negotiated to be for attorneys’ fees.