Frasco v. State of Oregon Settlement: Class, Payouts, and Claims

The Frasco v. State of Oregon settlement is a $15 million class action agreement resolving claims that the state’s December 2022 rollout of the Workday payroll system underpaid, overpaid, and mishandled paychecks for tens of thousands of employees. The class covers 60,573 current and former state workers, with individual payouts ranging from roughly $100 to about $3,100 depending on employment status and documented harm.¹²

Who Is Covered by the Settlement

The class includes nearly every hourly worker and some salaried employees who worked for the State of Oregon between December 2022 and the settlement’s eligibility cutoff. Judges and legislators are excluded.²³¹

What Class Members Receive

Base payments depend on whether the worker is still employed by the state:

Non-exempt employees still working for the state receive $198.57.
Non-exempt employees who have left state employment receive $302.98.
Class members with documented out-of-pocket costs, such as bank overdraft fees, can claim up to $500 more.
Class members who suffered “significant life-altering events,” such as loss of housing or a vehicle, can claim up to $2,500 more.
The eight named plaintiffs receive an additional $7,500 each.

Class members seeking the extra expense or hardship payments had to submit a written statement describing the claim, the dollar amount, and whether the loss was an out-of-pocket cost or a significant hardship caused by the Workday launch.⁴¹

Money left over after payments to class members and attorney reimbursement goes to Legal Aid Services of Oregon and several nonprofits focused on economic justice and workers’ rights. Any checks unclaimed 90 days after distribution revert to those designated nonprofits.¹⁵

Key Dates and Claims Process

Multnomah County Circuit Court Judge Eric Dahlin granted preliminary approval on May 5, 2025, and authorized mailing notice to current and former state workers. The deadline to file a claim, opt out, or object was August 25, 2025. The final approval hearing was held October 3, 2025. Checks were mailed starting December 8, 2025, with payments issued that same month.¹⁵ Rust Consulting, Inc. administered the claims process.⁴

What the State Admitted and Gave Up

As part of the agreement, the Department of Administrative Services acknowledged it “failed to fulfill” its responsibility to pay employees accurately and on time. The state also agreed to waive erroneous overpayments generated by the faulty system, meaning workers no longer have to repay amounts the Workday system mistakenly issued.¹⁶

The underlying complaint alleged missed and late paychecks, incorrect pay rates and overtime, excessive deductions for retirement and benefits, inadequate wage statements, misreported wages to the Oregon Public Employees Retirement System, incorrect leave accruals, and late final payments when employees retired or separated.³ In exchange for the payment, class members are barred from filing or joining additional class actions over Workday payroll issues until July 2027.¹

What the Settlement Does Not Resolve

Two sets of union grievances sit outside the Frasco settlement. SEIU 503 filed four group grievances between January and April 2025 seeking, among other things, reimbursement of overdraft fees and $150 penalty payments per incorrect paycheck. AFSCME filed its own grievance in March 2023. Both remained in arbitration as of their most recent public updates, after the state declined to settle them while the lawsuit was pending.⁷⁸ Class members covered by those grievances may see additional remedies through arbitration that are separate from the Frasco checks.

Separate Payments Tied to the Payroll Overhaul

Collective bargaining agreements ratified in late 2025 and early 2026 include a one-time $1,700 payment and 40 hours of cashable paid leave for represented employees when structural payroll changes take effect. Unrepresented employees and managers in Salary Range 30 and below receive equivalent compensation. These payments are tied to the state’s move from monthly to biweekly pay, the shift from salaried to hourly pay for overtime-eligible workers, and the end of “forecasting” hours. All structural changes are to be implemented by July 1, 2027.²⁹ Those payments are not part of the Frasco settlement and are handled separately by the state through payroll.

Who Represented the Class

Named plaintiffs Laurie Frasco and Michael Kennedy opened the case, and six additional employees were later added. The class was represented by Whitney Stark of Albies & Stark and Richard Myers of Bennett Hartman, working in coordination with several labor unions.³¹ A trial had been scheduled for April 2025 before the parties reached the agreement.¹⁰

1
The Oregonian/OregonLive. Oregon Reaches $15M Settlement With State Workers for Bungled Rollout of Payroll System
2
Oregon State Legislature. Committee Meeting Document – Frasco Settlement and Payroll Transition
3
Statesman Journal. Lawsuit Claims Oregon Incorrectly Paid Thousands of Employees
4
SEIU 503. Settlement Claim Letter Template
5
SEIU 503. Workday Issue Updates
6
Bennett Hartman. Bennett Hartman Attorneys Negotiate $15 Million Class Action Wage Settlement
7
SEIU 503. Update on State Pay Issues – Workday
8
AFSCME. Workday Payroll Issues Update
9
Oregon.gov. Payroll Transition General Information
10
Oregon Capital Chronicle. Oregon Still Fixing State Employee Payroll System After Problems Last Year