Target agreed to pay $4.6 million to settle a lawsuit from nearly 14,000 warehouse workers in New Jersey who claimed the company failed to compensate them for time spent walking through massive facilities and undergoing security checks before and after their shifts.

The case involves three Target distribution centers in Burlington, Logan Township, and Perth Amboy, where workers reported having to show identification, pass through security screening, and walk long distances to reach their workstations before they could clock in.

Krystal Sadler initiated the lawsuit after working at the Logan Township facility for just over two months in 2022. She filed a complaint about the unpaid time, arguing that the few minutes before and after each shift added up to a significant amount when multiplied across thousands of workers over several years. The case highlighted a major difference between federal and state labor laws.

Under federal rules, time spent walking from the entrance to your workstation or going through security checks usually doesn’t count as paid time. However, New Jersey law takes a broader approach. It states that employers must pay workers for all the time the company requires them to be at the workplace, which includes security checks and walking time inside the building.

The company stated that it chose to settle the case to avoid the expense and uncertainty of continuing the legal battle, not because it admitted to doing anything wrong. Under the settlement agreement, approximately $2.75 million will be distributed directly to current and former hourly workers, who will share the payment.

Another $1.53 million covers attorneys’ fees, and Krystal Sadler receives a $10,000 service award for leading the lawsuit. A judge still needs to give final approval at a hearing on February 24, 2026, but legal experts expect the settlement will go through.

Why This Case Matters for Workers Everywhere

This settlement aligns with a growing national trend of lawsuits over unpaid time for activities that occur before or after workers officially clock in. The case illustrates how small amounts of time that seem minor on a daily basis can become significant financial issues when viewed from a broader perspective.

At these three Target warehouses, which together span more than 2 million square feet, workers walked significant distances every day just to reach their work areas. When you add up those minutes across nearly 14,000 employees over several years, the unpaid time turned into millions of dollars.

Similar lawsuits have emerged across the country, targeting major employers in the retail, logistics, and technology sectors. One of the most well-known cases involved Apple, which paid $30.5 million to settle claims from retail store employees who alleged that the company failed to compensate them for time spent waiting for and undergoing mandatory bag searches.

Target now faces similar lawsuits from warehouse workers in other states, including New York, where employees at warehouses in Wilton and Amsterdam have filed claims about unpaid walking and security screening time.

Workers who receive settlement payments must understand the tax implications. The portions of the settlement categorized as back wages will be counted as regular income and appear on W-2 forms, while other parts of the payment may be reported on 1099 forms. This means the money counts toward their annual income for tax purposes and could affect their eligibility for certain government benefit programs.

What Employers Might Change Going Forward

Although the settlement doesn’t require Target to change its timekeeping or security procedures, legal experts believe this case will prompt other employers to reconsider their policies.

Companies with large facilities and strict security protocols may start relocating their time clocks closer to building entrances, redesigning security checkpoint layouts, or adjusting the start times of employees’ shifts. The goal would be to ensure that any time workers must spend on company property counts as paid time under state laws.

The case also serves as a warning for companies operating in multiple states. What federal law considers legal might violate state regulations, and those differences create risks for employers who don’t pay close attention to each state’s specific requirements.

As more states interpret wage laws in ways that favor workers, companies with complex facilities and tight security controls will likely face increased scrutiny over every minute their employees spend on required tasks, even if those activities happen outside the traditional work period.

Sources

Newsweek, Target sending checks to 13,700 Americans from $4.6M Target settlement, January 2, 2026​
HR Morning, Wage Claim Lawsuit Leads Target to $4.6M Payout, November 19, 2025​
HR Dive, Target workers in New Jersey accept $4.6M to settle wage claims for off-the-clock walking, October 30, 2025​
Top Class Actions, Target hit with wage-and-hour lawsuit over unpaid walking and security time, 2025​
AfroTech, Target warehouse workers reach multi-million dollar settlement over unpaid time, 2025