Cognizant and its former employee Debi Mishra have reached a class-action settlement agreement where the former has agreed to pay $5.7 million to compensate for underpaid overtime hours.

Mishra and other employees who were part of the class action worked in the quality engineering & assurance (QE&A) team. Mishra worked in the team for Cognizant’s client Blue Shield based in California until he resigned in 2015. 

Mishra in the lawsuit alleged that Cognizant underpaid overtime by failing to include certain amounts when calculating the regular rate of pay. 

Mishra alleged that in 2012, he received a letter saying the terms and conditions of his employment had changed. Cognizant informed him that his “position has been classified as overtime-eligible.” The letter also indicated that Mishra was guaranteed to earn “no less than $62,100,” and that the bonus would be added to keep his annual income at this level. But the actual payments were said to be much lower. Mishra’s counsel retained an expert forensic economist to review and analyze the data. The total potential damages for all employees involved, according to calculations by the forensic economist, was $11,219,891. 

Cognizant rejected this analysis, and contended that Mishra and the class members “did not actually work overtime hours and instead merely recorded overtime as a means of obtaining faster and more evenly spread pay.”

Mishra filed the original complaint on August 25, 2017. About a year later, the parties participated in a full day of private mediation before a retired judge but did not reach a resolution. The latest settlement agreement by the US court requires Cognizant to pay about half of what was estimated as damages by the plaintiffs. Most of this amount will be divided among class members.

Earlier, Cognizant was in news for its to pay about two-thirds of its employees an additional 25% of their base salary in their April salary, as a ‘sign of gratitude’ for their efforts in continuing to work during the Covid-19 pandemic.