Documents filed with the court indicate that a settlement agreement has been reached whereby DHL will pay up to $10.5 million to settle unpaid vacation pay claims brought on behalf of DHL’s former employees in California who lost accrued benefits as a result of a use it or lose it policy.

The allegations in the lawsuit state that employees had their vested vacation wages forfeited, were not timely paid their wages upon termination of employment, and were not were not provided proper wage statements in compliance with California state labor law.   The suit claims that DHL did not pay out all vested vacation wages and floating holiday wages at the end of employment as required by law  – maintaining an illegal “use it or lose it” policy.   The lawsuit further alleges that the vacation policy had an improper accrual policy which resulted in the loss of additional amounts of vacation wages.